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Insiders Active in 5G, Optical Beneficiary Showing Relative Strength

by | Sep 27, 2021

MaxLinear (MXL) seeing some notable insider accumulation recently with buys on 9/3, 9/10, and 9/13 from the Chief Financial Officer. Between the three buys he invested over $500K between $52.50 and $54.50. MXL has traded well in 2021 with shares up 37.5% and just 4.5% off of new highs. The recent pullback held the rising 20-MA and a breakout above $54 has a measured target to $62. MXL provides RF, high-performance analog, and mixed-signal communications SoCs for the connected home, wired and wireless infrastructure, and industrial applications. They continue to see significant opportunity from growth in new products across their infrastructure business, especially in MIMO transceivers and WIFI 6, while optical and 5G ramps will also be tailwinds over the next decade. The $4B company trades 19.5X earnings, 5.2X sales, and 39.5X FCF with mid-teens growth. Analysts have an average target for shares of $55 with a Street High $75 from Craig Hallum. The firm was out on 9/24 raising estimates as they see continued growth from Broadband as MaxLinear gains share, particularly in fiber, and sees strong growth from Wifi. Roth Capital with a $70 PT on 9/2 as the stock represents a differentiated investment opportunity in broadband and networking RF and mixed-signal opportunities. And, despite ongoing supply constraint issues, the analyst nonetheless thinks MaxLinear is seeing continued strong connected home demand boosted by ongoing remote work/learning. Hedge fund ownership rose 5.5%. Adage Capital, Penserra Capital and Paradigm all notable buyers. Short interest is 3.2%.

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