|Written by GSCR Staff|
|Thursday, 25 September 2014 05:45|
We will continue the theme started earlier this week in the Guide and ‘Investing Ideas A to Z’ with an ‘A’ stock from a long time ago.
Way back in January 2013 at an initial price of $4.44 and then again in December, we featured Amkor Technology, Inc. (NASDAQ – AMKR - $8.94). The stock is a clear winner up over 101%. Now what do we do?
For a refresher, the Company offers turnkey packaging and test services, including semiconductor wafer bumps, wafer probes, wafer back grinds, package design, packaging, and test and drop shipment services. In other words, Amkor’s customers are semiconductor technology manufacturers. Overall, the Company offers a well-diversified market base in terms of other firms and geographical locales.
According to our simple growth revenue and price metrics evaluation, AMKR is still a winner. The consensus analysts’ estimates predict an 8% CAGR in top line revenue growth for 2014 and 2015 placing the 2015 estimate at just under $3.5 billion in sales. This puts the forward P/E of 9 well under the trailing P/E of 17. The 5-year PEG ratio is also under 1. With over $528 million in cash on hand as of the end of 2Q14, the Company should have enough capital to maintain and expand its offerings. Finally, operating margin of 9% versus the industry average of 3% indicates Amkor is keeping costs under control.
We say keep this one for now. AMKR can make a jump north of $10 by the end of the year.
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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