Improving Auto Demand And Increased Likelihood Of Change Driving New Interest In ON Semiconductor (NASDAQ:ON)

I’ve had an odd “relationship” with ON Semiconductor (ON) over the years, with management’s inability to hit margin targets (and inability to drive margin leverage) and questionable M&A decisions factoring prominently into the negative side. On the other hand, I’ve always liked the potential of what ON could be under the right circumstances, and the shares have done pretty well since my last two positive write-ups (in a strong market for chip stocks, I’ll note).

With the CEO on his way out, I think ON Semiconductor’s capacity for change is higher now than ever before, and apparently I’m not the only one who sees upside in a differently-run ON, as Starboard has also gotten involved as an investor. On top of all that, guidance updates from companies including Sensata (ST), STMicro (STM), and NXP (NXPI) have all confirmed an improving environment for the key auto end-market.

At today’s price, there’s

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Q3 Auto Sales Improving, Still Well Below 2019 Level

New vehicle sales in September are projected to reach 1.22 million units, some 51,560 fewer than sold in September 2019. The seasonally adjusted annual rate (SAAR) of sales is expected to tumble from 17.1 million in September 2019 to 14.8 million this year. In August, automakers sold 1.32 million light vehicles.

Auto industry research firm ALG, a subsidiary of TrueCar, reported the estimates on Friday, noting that including an adjustment for selling days, third-quarter sales are expected to be down by 14% year over year in September but up by 28% month over month.



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ALG’s September estimates are in line with the latest quarterly estimate, also published Friday by Edmunds. Third-quarter unit sales are forecast to reach 3.85 million, down 11% year over year, but up nearly 31% from the second quarter of this year.

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Jessica Caldwell, the Edmunds executive director of

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