InvenSense Inc. shares jumped Wednesday after an analyst predicted that the technology company could win Apple Inc. business.
THE SPARK: InvenSense "remains extremely well-positioned to penetrate Apple this year," said Pacific Crest Securities analyst John Vinh in a research note Wednesday. He said the company, whose products include motion sensor parts used in smartphones and tablets, had built up its inventory in the first quarter so that it could supply new iPhone models expected this year.
InvenSense said it cannot comment on whether it provides parts for Apple or speak to future products. A representative for Apple could not be reached for comment.
THE BIG PICTURE: InvenSense, based in Sunnyvale, Calif., makes micro-electro-mechanical systems gyroscopes used for motion tracking devices in consumer electronics.
It earned $51.7 million, or 59 cents per share, in its most recent fiscal year on revenue of $208.6 million.
Apple has reshaped the cellphone market since the introduction of the iPhone in 2007. Because of the popularity of Apple's phones, a contract with the company could be a major gain for smaller technology companies.
THE ANALYSIS: Vinh estimated that a deal with Apple could add 40 cents per share to the company's annual earnings. He has a price target of $15 on InvenSense shares, which he rates "Outperform."
SHARE ACTION: InvenSense shares increased 58 cents, or 4.7 percent, to $13 in late afternoon trading. Its stock remains near the middle of its 52-week trading range of $9.06 to $15.96. Shares have been volatile over the past 12 months, but are up about 8 percent from last May.
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