Why Rambus Jumped

Updated

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of memory-chip designer Rambus (NAS: RMBS) jumped today by as much as 13% on an analyst upgrade along with some bullish comments.

So what: JPMorgan's Paul Coster bumped shares to "overweight," which is a little odd considering that he said shares are currently fairly valued. Further boggling this Fool are his comments that Rambus should be worth between $4.25 and $4.50, considering its existing contracts and cash balance. Coster also said that Rambus should see its results improve by tapping into the mobile-device and LED-lighting markets.


Now what: Shares closed yesterday at $4.47 and finished today at $4.85, which makes it seem as if a "neutral" stance would have been more appropriate. Even using Coster's high-end $4.50 target now represents a 7% downside. Just yesterday, it tanked on a different analyst's downgrade.

Interested in more info on Rambus? Add it to yourWatchlist.

At the time thisarticle was published Fool contributorEvan Niuholds no position in any company mentioned. Check out hisholdings and a short bio. The Motley Fool has adisclosure policy. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Advertisement