Option Trade 
Integrated Device Technology Inc (NASDAQ:IDTI) Puts 
Monday, August 24, 2015

**OPTION TRADE: Buy the IDTI Sep 2015 18.000 put (IDTI150918P00018000) at approximately $1.35. Place a protective stop loss at $0.55, and a pre-determined sell at $2.70.

by Ian Harvey

August 24, 2015

Introduction

Integrated Device Technology Inc (NASDAQ: IDTI), designs, develops, manufactures and markets a broad range of low-power mixed signal semiconductor solutions for the advanced communications, computing and consumer industries, has lost 9.9% during the past week and dropped 10.23% in the last 4 weeks. The shares are however, negative as compared to the S&P 500 for the past week with a loss of 4.39%. Integrated Device Technology has underperformed the index by 5.27% in the last 4 weeks.

And this scenario is predicted to only keep getting worse!

Integrated Device Technology, Inc. witnessed a decline in the market cap on Friday as its shares dropped 2.04% or 0.36 points. After the session commenced at $17.38, the stock reached the higher end at $17.88 while it hit a low of $17.21. With the volume soaring to 4,060,608 shares, the last trade was called at $17.29.

This slump shouldn’t be too much of a surprise as the manufacturer of high-performance semiconductor products has seen 1 negative revision in the past few weeks and its current year earnings consensus has moved lower over the last 30 days. The semiconductor stock has been unable to break a tide of bearish sentiment in the industry despite a strong earnings report Aug. 3. It's now broken support at its 200-day moving average and is now testing levels last seen in January.

This suggests there may be more trouble down the road.

Technical Details

Integrated Device Technology, Inc. has dropped 23.56% during the last 3-month period. Year-to-Date the stock performance stands at -11.79%.

On June 8, 2015 the shares registered a one year high of $24.53 and a one year low was seen on October 15, 2014 at $11.94.

The 50-day moving average is $19.69 and the 200 day moving average is recorded at $20.78.

The company has a market cap of $2,564 million and there are 148,268,000 shares in outstanding.

Earnings

Previous Earnings

Integrated Device Technology last issued its quarterly earnings data on Monday, May 4th. The company reported $0.29 earnings per share for the quarter, beating the analysts’ consensus estimate of $0.26 by $0.03. The company had revenue of $158.40 million for the quarter, compared to the consensus estimate of $157.90 million.

During the same quarter last year, the company posted $0.14 earnings per share. Integrated Device Technology’s revenue was up 33.6% compared to the same quarter last year. On average, analysts predict that Integrated Device Technology will post $1.17 earnings per share for the current fiscal year.

Insider Selling

The Company has disclosed insider buying and selling activities to the Securities Exchange, Smith Ronald James, director of Integrated Device Technology Inc, unloaded 10,000 shares at an average price of $20.66 on August 10, 2015. The total amount of the transaction was worth $206,600, according to the disclosed information with the Securities and Exchange Commission in a Form 4 filing.

Also, the Company has disclosed insider buying and selling activities to the Securities Exchange, White Brian C, officer (VP, Chief Financial Officer) of Integrated Device Technology Inc, unloaded 1,250 shares at an average price of $23.74 on June 15, 2015. The total amount of the transaction was worth $29,675, according to the disclosed information with the Securities and Exchange Commission in a Form 4 filing.

And one more, Integrated Device Technology saw SVP Sailesh Chittipeddi sell 19,253 shares of Integrated Device Technology stock on the open market in a transaction that occurred on Friday, June 5th. The shares were sold at an average price of $24.02, for a total transaction of $462,457.06.

Analysts Opinions

Research firm Zacks has rated Integrated Device Technology, Inc. and has ranked it at 3, indicating that for the short term the shares are a hold. Six (6) Wall Street analysts have given the company an average rating of 2.17.

The shares have received a hold rating based on the suggestion from 1 analyst in latest recommendations. 1 brokerage houses have given a strong sell on the shares. Strong buy was given by 3 Wall Street Analysts. The shares had a buy rating from 1 analyst.

The company has also been the subject of a number of other research reports:-

• Barclays maintains its rating on Integrated Device Technology, Inc. The global brokerage major raises the current price target from $15 per share to $19 per share. Analysts at the Barclays have a current rating of Underweight on the shares. The rating by the firm was issued on May 26, 2015.

• And on Friday 7th August, Zacks lowered shares of Integrated Device Technology from a buy rating to a hold rating.

Harvey’s Options Volatility Indicator

Conclusion

With all this negativity present, which also includes the global meltdown, then this company is ripe for an options put trade.

Therefore, based on the facts above, and Harvey’s Options Volatility Indicator, the following option trade is recommended…..

**OPTION TRADE: Buy the IDTI Sep 2015 18.000 put (IDTI150918P00018000) at approximately $1.35. Place a protective stop loss at $0.55, and a pre-determined sell at $2.70.

”Success is simple. Do what's right, the right way, at the right time.”

Option Tip for your Success!
Options traders are not successful because they win.
Options traders win because they are successful.



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