Robert, if you want a low priced stock look at AMKR. One of the largest test and assembly outsource companies in the world for semiconductors. Amkor serves more than 150 customers, including Advanced Micro Devices, Cirrus Logic, Hewlett- Packard, IBM, Intel, Motorola, Texas Instruments, and Toshiba. Sales last year were 1.6 Billion dollars.
confirmatoryanalysis.com
P/Book = 1.72
P/Sales = 0.59
P/Earnings(TTM) = 10.88
P/Earnings(next 12 months projected = 9.2
John Neff (director) bought 5,000 shares at 9.63
New directors often do this, but John Neff is an imposing figure in stock market history as the original value oriented manager of the Windsor Fund in the late 1980's and early 1990's. His Barrons interviews in the late 1989 and early 1990 period got me into what is now Citigroup at an average $3 and $4 per share. Today Citigroup sells for over $40. 10X in 10 years isn't bad.
Back to AMKR... Let's do the math. 80 cents in earnings over next 12 months. Growth projections over next 5 years > 23% therefore the stock should sell for a p/e of around 20 and the price should move toward $16 without too much effort.
The current price is less than $8 so it should be a double in 12-18 months as semiconductor cycle gets rolling in later half of 1999. The recent earnings cut was AMKR spending now to increase capacity in their newest facilities for the expected requirements. Spending prudently now, to reap the benefit when capacity tightens later is smart business even if analysts don't like it now.
I suspect we might see another drop in the stock when the actual earnings come out for Q2, but that should be the absolute bottom for this stock in this cycle. You do like stocks that go down then up right?
I own some at $6 and $10 3/8. This is one stock where Mr. BuyandHold is behind anyone AIMing it, but the last chapter isn't written yet. <grin>
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Dave
PS, this is one stock where you might be able to trade it every two weeks and make a bundle AIMing it. It moves between $7 and $10 quite easily on any good or bad news. |
