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Payne's Picks

This Stock Looks Poised for Breakout

By Payne's PicksFOXBusiness

Can Power Integrations power your portfolio higher?

FBN’s Charles Payne, A&G Capital CIO Hilary Kramer, NewOak Capital President James Frischling, Stifel Nicolaus Portfolio Manager Chad Morganlander and Penn Financial Group founder Matt McCall on the outlook for Power Integrations.

Let’s talk about Power Integrations (NASDAQ:POWI).

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The company does a lot in the power conversions space. Now, you look at its chart and you can see I'm trying to jump the gun a little bit. I think it's going to break out.

They do power integration, mobile TV, smart meters, LED drivers, also some electronic switching. Third quarter revenue was flat year-over-year, but the margins went up pretty nicely (over 100 basis points).

Consumer now 36% of revenue, from 34%. I like that the revenue is really growing. Here's a smart company, too, with 23 patents in the last quarter (and 668 total).

The company is poised to grow 30% a year, every year for the next five years. Peg ratio is 0.74. It's bouncing off $50 in the chart. If we can hold there, I think on the upside, you got room to $60.

Long term, give me a year, I think this could be a $68 stock. I played it a lot in the past, I think it's oversold.


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