Money Manager continues to buy Amkor
James Cunningham, Renberg Capital Management.
JAMES J. CUNNINGHAM is a Vice President at Renberg Capital Management.
Mr. Cunningham: Renberg Capital Management has been in business for 36 years. We have always been a growth equity management firm. We manage individual accounts for high net-worth clients, small institutions, foundations, retirement and pension plans. We employ a consistent investment philosophy, centered on growth companies in all capitalization ranges ? small, medium and large. We like to build portfolios by anchoring them with large cap names, and then adding small and mid-cap companies in order to gain the potential rewards that smaller companies can provide a portfolio.
TWST: What else did you invest in at the early stage?
Mr. Cunningham: Well, there's a company called Amkor (Nasdaq:AMKR). It's a 30-year-old blue chip semiconductor packaging and testing company. It's not a new company; it's seasoned. It has a customer list that anyone in the business would be envious of, Intel and all the top semiconductor companies included. They provide wafer probe testing, packaging, assembly and design. They do a lot of the things that a semiconductor company used to do in-house, but are now outsourcing to companies like Amkor that do packaging and testing services. They are an outsourced play in the semiconductor arena. In 1998 Korea was melting down, and if you remember, the Asian crisis was mounting. The opportunity was in a once private, closely held company that now had to come to the market to raise some capital to get through the storm. We bought some at $11 a share on the IPO. Korea worsened, Asia worsened, and the stock went down from $11 down to $3.
It was very tough to hang in there, but the whole reason that we were hanging in and buying in those low single digits was because we believed in its blue chip nature. The semiconductor business wasn't going to go away. They were the leader. They had proven management, 30 years in the business, a great customer list, so we hung on while all others were basically saying, ?I don't know what I own, I'm out of here.? And it created a great buying opportunity.
Now, the stock, like all semiconductor-related stocks, has taken off. The stock closed today at $47. The best thing with Amkor is that you can still buy it today because it's only trading at a 20 multiple. It's supposed to earn $2.28 in December 2001, which gives it a 21 multiple today, and the growth rate is in the 30s. So you're paying less than 1 time growth in a blue chip semiconductor related stock that most people still don't know about. I'm glad we bought it between $4 and $10 in 1998, and continue to buy it today when it retraces to the low $40s, which it did last week.
So that's the kind of thing we look for but perhaps without the extreme volatility. By the way, my personal background is that I came out of Oracle and the high-tech industry. So I have a sense of technology and a comfort level which may be different from other investors
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