Tower Semiconductor (NASDAQ:TSEM) Stock Falls 9.7% - Should You Sell?

Key Points

• Tower Semiconductor shares fell 9.7% to about $169.71, with trading volume 78% below the average session volume. The stock was trading below its 50-day and 200-day moving averages.
• Analysts remain broadly optimistic, with a consensus rating of “Moderate Buy” and an average price target of $316. The company’s latest quarterly results also exceeded expectations, reporting $0.88 EPS versus the $0.76 consensus and 23.7% year-over-year revenue growth.
• Insiders sold 181,767 shares worth approximately $45.6 million over the past three months, including a substantial sale by CEO Russell Ellwanger; institutional investors own 70.51% of the company.

Shares of Tower Semiconductor Ltd. (NASDAQ:TSEM - Get Free Report) dropped 9.7% during mid-day trading on Friday. The company traded as low as $169.22 and last traded at $169.7110. 490,285 shares traded hands during trading, a decline of 78% from the average session volume of 2,257,967 shares. The stock had previously closed at $187.92.

Wall Street Analysts Forecast Growth

Several brokerages recently issued reports on TSEM. Barclays began coverage on shares of Tower Semiconductor in a report on Friday, September 18th. They set an "overweight" rating and a $310.00 price target for the company. Bank of America assumed coverage on Tower Semiconductor in a research note on Friday, August 7th. They set a "buy" rating and a $367.00 price objective on the stock. Weiss Ratings lowered Tower Semiconductor from a "hold (c)" rating to a "hold (c-)" rating in a research report on Tuesday, August 18th. National Bank Financial upgraded shares of Tower Semiconductor to a "buy" rating in a report on Friday, August 7th. Finally, UBS Group reissued a "buy" rating on shares of Tower Semiconductor in a research note on Wednesday, July 15th. One research analyst has rated the stock with a Strong Buy rating, seven have issued a Buy rating and two have issued a Hold rating to the stock. According to data from MarketBeat.com, the stock presently has an average rating of "Moderate Buy" and a consensus price target of $316.00.

Tower Semiconductor Stock Performance

The company has a current ratio of 4.91, a quick ratio of 4.31 and a debt-to-equity ratio of 0.04. The stock has a market capitalization of $18.30 billion, a price-to-earnings ratio of 64.31 and a beta of 0.89. The company's 50-day simple moving average is $213.80 and its 200-day simple moving average is $204.00.

Tower Semiconductor (NASDAQ:TSEM - Get Free Report) last posted its quarterly earnings results on Tuesday, August 4th. The semiconductor company reported $0.88 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.76 by $0.12. The business had revenue of $460.08 million during the quarter, compared to the consensus estimate of $454.68 million. Tower Semiconductor had a net margin of 16.94% and a return on equity of 9.83%. Tower Semiconductor's revenue was up 23.7% compared to the same quarter last year. During the same quarter last year, the firm posted $0.41 EPS. On average, analysts expect that Tower Semiconductor Ltd. will post 3.56 EPS for the current year.

Insider Buying and Selling

In other news, CEO Russell Ellwanger sold 104,226 shares of the stock in a transaction dated Tuesday, August 11th. The shares were sold at an average price of $248.34, for a total transaction of $25,883,484.84. Following the sale, the chief executive officer owned 526,788 shares of the company's stock, valued at approximately $130,822,531.92. This represents a 16.52% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, Director Yoav Chelouche sold 232 shares of the company's stock in a transaction dated Thursday, September 10th. The stock was sold at an average price of $215.06, for a total value of $49,893.92. Following the sale, the director owned 33,734 shares in the company, valued at approximately $7,254,834.04. This trade represents a 0.68% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold a total of 181,767 shares of company stock worth $45,610,065 over the last three months. Corporate insiders own 1.00% of the company's stock.

Institutional Trading of Tower Semiconductor

A number of hedge funds have recently added to or reduced their stakes in the stock. Versant Capital Management Inc boosted its stake in shares of Tower Semiconductor by 20.8% in the third quarter. Versant Capital Management Inc now owns 319 shares of the semiconductor company's stock valued at $73,000 after buying an additional 55 shares in the last quarter. Sterling Capital Management LLC purchased a new stake in Tower Semiconductor in the third quarter valued at approximately $75,000. TD Waterhouse Canada Inc. lifted its stake in shares of Tower Semiconductor by 230.7% in the 2nd quarter. TD Waterhouse Canada Inc. now owns 334 shares of the semiconductor company's stock valued at $82,000 after purchasing an additional 233 shares in the last quarter. Pinnacle Wealth Planning Services Inc. lifted its holdings in shares of Tower Semiconductor by 83.2% during the 3rd quarter. Pinnacle Wealth Planning Services Inc. now owns 339 shares of the semiconductor company's stock valued at $77,000 after acquiring an additional 154 shares in the last quarter. Finally, Greenleaf Trust purchased a new position in shares of Tower Semiconductor in the second quarter valued at $201,000. 70.51% of the stock is owned by institutional investors and hedge funds.

Tower Semiconductor Company Profile

Tower Semiconductor Ltd. is an Israeli specialty semiconductor foundry that manufactures integrated circuits for fabless semiconductor companies, integrated device manufacturers and system companies. The company provides process technologies and production services rather than selling branded end-user electronics.

Its offerings include analog and mixed-signal technologies, radio-frequency and high-voltage circuits, power management solutions, image sensors, and specialty memory products.

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