5 Green Days In A Row: MACOM Technology Solutions Stock Is Up 18%
MACOM Technology Solutions (MTSI) stock has risen for 5 consecutive trading days, gaining 17.9% over that stretch. That added about $3.8 billion to the company’s market value, which now stands at about $25.1 billion. The stock closed at $328.30 on Monday, October 5, 19.9% below its 52-week high of $409.68 and 168.7% above its low of $122.18.
How The Streak Stacks Up Against The S&P 500
Returns for MTSI and the S&P 500 over the streak and the periods around it, all ending Monday, October 5 and including dividends:
| Return Period | MTSI | S&P 500 |
|---|---|---|
| 1 Day | 2.1% | 0.7% |
| 5 Days (Current Streak) | 17.9% | 1.2% |
| 1 Month (21 Trading Days) | 26.3% | 0.4% |
| 3 Months (63 Trading Days) | 7.7% | 3.9% |
| Year To Date | 91.7% | 14.6% |
| 1 Year (252 Trading Days) | 156.3% | 17.1% |
Is This Move About MACOM Technology Solutions Or The Market?
Over the same 5 trading days, the S&P 500 returned +1.2% including dividends, so the run is mostly MACOM Technology Solutions’ own story rather than the market’s. Over the past three months the stock is up 7.7%, a window that includes the streak; over the other 58 sessions of that window it was down 8.6%.
What The Numbers Say About The Rally
On the fundamentals, revenue grew 28.4% over the last twelve months, against a median of 17.9% for S&P 500 Information Technology stocks; its operating margin is 18.1%, versus a median of 21.7%; and the stock trades at 104.0 times trailing earnings against a median of 37.4. The numbers make the run harder to justify: margins below the median and a multiple well above the median. At this price, the stock is asking a lot of the business.
A climb like this is worth respecting, and worth testing. Our Guidance Momentum screen tracks the stocks whose companies just raised their own forward numbers.
For anyone who would rather back the theme than one company, a semiconductor ETF like SOXX holds the whole group, not just this stock. It is still a concentrated bet on one theme, which is the gap the portfolio below is built to close.
One Hot Stock Is A Story. Thirty Sound Ones Are A Strategy
A streak like this earns a place on your watchlist, and it also earns a question: how much of your outcome do you want depending on one company keeping this up?
The Trefis High Quality (HQ) Portfolio answers it with breadth: roughly 30 businesses picked for consistent cash generation, strong margins, and balance-sheet strength, sized and rebalanced by rules. It has a track record of outpacing a benchmark that combines the S&P 500, the S&P MidCap 400, and the Russell 2000. Follow the story; invest in the strategy.