During the massive selling this week, the Philadelphia Semiconductor Index, or the SOX as it is called, fell 4.6%, the largest one day drop since October 10 of last year. While the drop was due to a mixture of bad U.S. macro data and an industry slowdown arising from the strength of the U.S. dollar, a new report from Deutsche Bank speculates that the industry slowdown is not entirely due to the much reported weakness in personal computer sales.

The Deutsche Bank team points out that despite the big sell-off, the SOX continues to outperform the broader S&P 500. They also say selectivity is the key for tech investors wanting to take advantage of the current sell-off and stay long the sector. The analysts stocks rated Buy are primarily in their words, “Co-specific‚ self-help stories that possess the ability to unlock equity value without meaningful macro/cyclical tailwinds.” That is, they have a broad client base and multiple silos for product sales.

The four stocks rated Buy at Deutsche Bank are: Broadcom Corp. (NASDAQ: BRCM), Intel Corp. (NASDAQ: INTC), NXP Semiconductors N.V. (NASDAQ: NXPI) and On Semiconductor Corp. (NASDAQ: ONNN).

ALSO READ: UBS Has Just 5 Semiconductor Stocks to Buy Now

Broadcom

The new Samsung Galaxy S6 could bring even more earnings growth for this top supplier to both Samsung and Apple. Broadcom supplies touch-screen controller chips for the iPhone 6. The S6 will be using the company’s second generation 2X2 5G Wi-Fi/Bluetooth combo, and the new GPS/Sensor hub chipset. The analysts feel that because Samsung is going to use its own applications processor, the company is poised to gain share versus last year, so overall a huge win for the tech giant.

Broadcom shareholders are paid a 1.35% dividend. The Deutsche Bank price target is $50, and the Thomson/First Call consensus price target is $48.06. The stock closed on Thursday at $42.14 a share.

Intel

Wall Street has been taking this stock to the woodshed throughout almost the entire first quarter. The iconic chip giant had a stellar 2014 on the tailwind from continued PC and notebook sales. The stock has underperformed the S&P 500 by a massive 14% year to date, and recently the company dramatically lowered estimates for the first quarter, an event that wasn’t altogether unexpected.

Wall Street analysts have pointed out that so-called earnings confessions are not that unusual in the chip world, and history suggests buying the confession pays in semiconductors. Many are of the opinion that the recent earnings warning announcement is a stellar opportunity for investors to buy a quality stock like Intel.

Intel investors are paid an outstanding 3.21% dividend. Deutsche Bank has its price target set at $38. The consensus target is much lower at $34.70. Shares closed trading on Thursday at $30.08.

ALSO READ: 4 Hot RBC Tech Stock Picks to Buy Now

NXP Semiconductors

The recent merger announcement of NXP and Freescale Semiconductor was widely applauded on Wall Street, and many analysts, including the Deutsche Bank team, believe the merger can transform the company into a powerhouse, making it the fourth largest semiconductor company in the industry.

It is also important to note that the combined company would be the number one supplier in auto semiconductors, number one supplier in global microcontrollers, a dominant supplier in mobile payments, and a leading Internet of Things supplier.

The Deutsche bank price target is $115, and the consensus target is set at $107.86. Shares closed Thursday at $97.50 apiece.

On Semiconductor

On Semiconductor purchased Truesense Imaging last year, a provider of high-performance image sensor devices addressing a wide range of industrial end markets, including machine vision, surveillance, traffic monitoring, medical and scientific imaging, and photography. The acquisition of Truesense strongly complements ON Semiconductor’s image-sensor business by vastly expanding its technology portfolio and adding more than 200 new customers. A larger chip company may find the company’s product line a solid fit.

Deutsche Bank has a $16 price objective, and the consensus target for this Wall Street favorite is lower at $14.18. Shares ended most recently at $11.63.

ALSO READ: Merrill Lynch Says Buy These 3 Top Radio Frequency Chip Stocks

Again they key for investors is selectivity. The Deutsche Bank team has picked four companies that can provide investors with solid upside potential, especially after a rather significant sell-off.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.