Hi Eric,
Once again throwing down on this stock after it declines in price.
You didn't peel off some stock after it more than doubled or sold any calls?
Cohu paid a lot of cash for XCRA - just so the outstanding was not diluted (it added 14 million shares to the original 28 million before the merger).
Almost half of the combined revenue is consumables - (48%). That segment features margins as high as Intel gets on microprocessors (mid 60's).
Look up the margins Cascade Microtest received before Formfactor bought them.
Xcerra had higher margins , greater revenue and more cash than Cohu did.
The only reason Cohu got to buy XCRA was they wrote the white pages that the CIFIUS board bot into and queered China's acquisition plans).
Chip testing firm urges blocking rival Xcerra's sale to China ...
www.reuters.com/article/us-xcerra-m-a-cohu/chip...
Cohu sent its analysis of the risks related to the proposed sale to the Committee on Foreign Investment in the United States (CFIUS), according to documents and correspondence reviewed by the Journal.
When Xcra bought Microtest from Dover, Microtest had the number 1 market share of gravity test handlers - read that a historically large installed owner base. That is the base they serve and make very good money doing it.
Cohu took their existing expertise in parallel pick and place and made the Rasco handler a parallel gravity handler and over took the number one market share. It did take about 4-5 years to accomplish.
Combined they have the largest installed owner base in Pick and place, Turret and Gravity.
They have also purchased Kita (in Japan) and are growing that business through cross selling spring contactors.
For owning them for less than 40 days,they have taken out almost half (9.2 million on a one year run rate) of the 20 million in synergies anticipated for the first 24 months. That's a very good start.
Jeffrey Jones will get those savings - this is not his first rodeo.
XCRA was an outsource test handler maker. When that business is incorporated into Ismeca's Malaysian production facility, margins will be internalized. I suspect this will initially be applied to XCRA's more complex handlers. Cohu tried that approach before and it was a flop. No doubt Cohu's in house abilities won the them the number one market share over XCRA.
All test handlers are designed to run 24 hours a day, 365 days a year. Each company has a work force at "in fab location" to maintain these machines and keep them running. That's where the wearable replacements and dedicated kits (that result from die shrinks) demand comes from.
If you don't believe that business can be very lucrative, take a look at another small company named Applied Materials and note that their Global services division is printing money in a very consistent manner.
I've not bought any shares since I sold $10.00 puts for 90 cents over 2 years ago. Been selling calls and doing quite nicely.
Sold quite a lot of shares and turned them into CY ,sold them and turned them into KMI - pays a 80 cent dividend. while pocketing a nice chunk of change.
Cmon Eric trade this stock and make some money.
| To: robert b furman who wrote (6405) | 7/31/2017 6:45:28 PM | | From: EACarl | Read Replies (1) of 6617 | | | Today's afternoon selling wasn't market maker games.
Too many blocks being DUMPED.
Much bigger than normal volume and big down move.
Still smells like the market sees the fundamentals peaking within the next year.
That's the way this sector rolls.
Ignoring it makes long term investors (bag holders) out of people trying to play the cycles.
Been there, done that.
Thank goodness I sold some August $20 calls only about a week and a half ago for $.90!
God knows the dividend it too insignificant to matter!
That ONE month of call premium is EQUAL to 3.75 YEARS of COHU's pathetic dividend.
Unbelievable!
You know how - just try to handle your bipolar posts.
All semi's and equipment companies have noted a decline in orders. Asian trade tariffs have apparently stalled future expansion - ya think a 25% tariff can do that?
This too shall pass and I do hope it means the future chip production comes back to the US and Euro land.
Mobility has been slowing for the last two webcasts.
5G is now being installed by Verizon and AT&T. The 5G phones are coming in mid 2019. The chip content of 5G is substantially greater than simpler 4G phones.
PC sales are growing as replacement cycles are kicking in. Auto and industrial are doing well and the combined company is all over this sector. With 5G will come many more I of T chips and demand for the new 5G mobile phones.
<< Back
Keysight, Cohu Extend Collaboration to Offer Comprehensive High-Volume Manufacturing Testing of 5G Power Amplifiers
Integrated solution simplifies correlation of measurement test results between design validation and manufacturing test
SANTA ROSA, Calif., November 5, 2018
Keysight Technologies, Inc. (NYSE: KEYS), a leading technology company that helps enterprises, service providers, and governments accelerate innovation to connect and secure the world, announced it has extended the company's collaboration with Cohu Inc., a leading provider of test solutions for the electronic industry, to deliver enhanced high volume manufacturing (HVM) solutions for the 5G semiconductor manufacturing test market.
The integration of Keysight's 5G NR Signal Studio and PXI modular instruments with Cohu's HVM radio frequency (RF) test tools enables 5G semiconductor manufacturers to streamline the transition from device validation testing (DVT) to HVM. Tightly integrated tools in both DVT and HVM allow users to easily correlate measurement test results, leading to faster time-to-volume (TTV) of 5G power amplifiers (PAs) and RF front-end modules (FEMs).
"We are excited to work with Cohu to make these best-in-class 5G manufacturing test solutions possible and to help PA/FEM manufacturers reduce the time and overall cost of testing as they transition from DVT to HVM," said Giampaolo Tardioli, vice president of Keysight's Network Access group.
Keysight's wide range of 5G solutions enable semiconductor providers and other wireless equipment manufacturers to address a diverse set of workflow test requirements, from design and simulation, to prototype test and manufacturing. Leveraging Keysight's PathWave design and test software platform enables these solutions to offer a common environment across PA/FEM workflow solutions, while improving efficiency with common measurement IP and leverageable automation code.
"Keysight's expertise and 5G test solutions have helped Cohu deliver high volume manufacturing solutions with a competitive edge for the 5G semiconductor manufacturing test market," says Steve Wigley, vice president of the Semiconductor Test Group at Cohu. "The integration of Keysight's software and PXI modular hardware with our HVM RF test tools greatly simplifies the task of correlating measurement test results between design validation and manufacturing test, creating a significant advantage for our customers."
Cohu (Nasdaq: COHU) is a global leader in back-end semiconductor equipment and services, delivering leading-edge solutions for the manufacturing of semiconductors and printed circuit boards. Additional information can be found at www.Cohu.com.
About Keysight in 5G
Keysight's industry-first 5G end-to-end design and test solutions enable the mobile industry to accelerate 5G product design development from the physical layer to the application layer and across the entire workflow from simulation, design, and verification to manufacturing, deployment, and optimization. Keysight offers common software and hardware platforms compliant to the latest 3GPP standards, enabling the ecosystem to quickly and accurately validate 5G chipsets, devices, base stations and networks, as well as emulate subscriber behaviour scenarios. Additional information about Keysight's 5G solutions is available at www.keysight.com/find/5G.
About Keysight Technologies
It's just an upgrade cycle and its usual lags.
If business slows down - they'll get right sized even faster.
Look at the earnings power of KLAC after their merger with Tencor, or look at AMAT after merging in Varian, or look at LRCX's growth after merging with Nvls.
In all past cases, global scale resulted in a leap frog of earnings. The synergies achieved by the service business on a global basis, coupled with the largest installed owner base in all cases has been greater profits.
What Cohu has accomplished is no more price competition and lower margins. Rather more high margin business as they've literally consolidated the back end market - excepting the actual test component.
TER is still the 800 pound Gorilla there.As stated for years now by me - Ter is the natural buyer of Cohu - much like Advantest (TER's biggest competitor) who do both test and handler but in primarily memory.
Give these people some time, and they'll pay off the debt, own the market and print money along with the much needed dividend increase.
You were the guy that noted a lot of cash per share does not boost a company's stock price. Revenue growth and bottom line profits is what drives a stock price. That's exactly what this merger will achieve!
Once the scale is gained, all of the past mergers I just mentioned , began an escalation of their dividend to very lofty levels.
When that phase begins, we'll see 40's and 50's.
You told me I was crazy when I said Cohu's revenue will reach 400 million. Their 9 months revenue this last Q was:
Sales of $281 million in the first nine months of 2018, up 5% year-over-year (annualized = 375 million - pretty close)GAAP gross margin of 39.9%; non-GAAP gross margin of 40.8%GAAP earnings per share of $0.16; non-GAAP adjusted earnings per share of $0.30Recently completed the acquisition of Xcerra and already implemented $9.1 million annual run rate cost synergies
Keep the faith Eric.
You see my vision of the future is a world with many new chips and applications. All of then streaming with 5G small cells = huge use of many more chips!
Stay positive and watch these people duplicate what the other market share champions of the chip business have already shown is the way to dominance and it subsequent big profits once competition has been consolidated.
With testing going direct in Taiwan and China, Cohu's next mid term goal will be Cohu 1 billion!
You'll laugh at that and I'll remind you where you heard it first!!
Bob |
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