2013 Success, 2014 Run

Written by GSCR Staff   
Tuesday, 10 December 2013 01:06

In keeping with the theme from the Goldman Guide yesterday we will look at one of our old Market Monitor picks that has had some success in 2013 and looks like it may run some more over the next few months. Our technology picks have been a mixed bag this year, with general success overall.  The Technology Select SPDR (NYSE – XLK) is up nearly 18% this year, and the technical analysis is very bullish.  Last week the U.S. Bureau of Economic Analysis reported a 3.6% growth rate in GDP continuing the positive trend for the fourth straight quarter.  We think 2014 will be a good year for the right small cap tech play.

Way back in January we highlighted Amkor Technology, Inc. (NASDAQ – AMKR - $5.79). 

The stock has been up and down all year, but has risen to hit the 30% mark with a large accumulation phase over the last three months, trading at nearly 1 million shares per day.  Additionally, the technical analysis is very bullish in relation to the Daily Moving Average from 5 to 50 days.  The forward 12-month P/E of 8.5 is nearly half of the trailing 12-month P/E of 15.5.  Check off all three metrics for our current winning formula.

We like Amkor because the Company is a diverse play on the technology sector, as a supplier and service provider for OEM companies.  The Packaging segment offers package formats and services using wire bonding and flip chip interconnect technologies, and hybrid technologies that connect the die to the package carrier.  The Test segment offers semiconductor testing services, including test development services, such as test software, hardware, integration, and product engineering services.

Consensus analysts’ forecasts predict a decent 6% rise in top line revenue for 2014 over 2013 to the $3.10 - $3.15 billion range.  We think the stock has enough room for another run sometime into 1Q14.

Have a great day!

Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.

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