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May 5, 2013

Share Tip – Sell ARM Holdings on NASDAQ

This Stock Market Tipster usually only gives share tips on companies and industries with which he is fully familiar.  This is one of the golden rules of personal finance and investing – the financial markets are difficult enough to predict without having to try and understand the product aswell.

Occasionally, I come across a compelling piece of investment research from someone with an in-depth knowledge of an industry which compels me to be more flexible on which shares to buy and sell.

However, I did give a stock tip to buy Qualcomm on the basis of Jim Jubak’s advice, so let that be a warning to you!  (The share price is presently $3 below where I recommended it as a ‘buy’.)

In their own words “ARM designs the technology that lies at the heart of advanced digital products, from wireless, networking and consumer entertainment solutions to imaging, automotive, security and storage devices.”  The company is quoted on the NASDAQ and has a market cap of approximately $22.5 billion.

Writing on Seeking Alpha, Russ Fischer makes a very good case for why the shares, which are presently trading at an all-time high of $48.50, are massively over-valued.  In his own words:

“In summary, there is nothing wrong with ARM [as a company]. ARM has enabled more dumb, smart, and intelligence products than perhaps any other company I can think of.

There are, however, terrible things wrong with the ARMH stock price. To me, a 35-year veteran of the semiconductor business, the ARMH share price smells like the 2001 tech wreck bubble writ small.”

Apart from the fact that I am mainly looking to play the financial markets from the short side, as most of my stock market tips here confirm, I am satisfied with the case made by Russ Fischer and my share tip of the day is to sell ARM Holdings at $48.50.

Click on the link here if you would like to follow the movement in the share price of ARM Holdings on NASDAQ.

 

 

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