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Strategies & Market Trends : Underexposed Technical Analysis

AQN 5.840

-1.2%

Dec 4 3:59 PM EST

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To: Underexposed who wrote (681)	12/19/2019 4:36:15 PM
From: robert b furman	1 Recommendation Recommended By kimberley Read Replies (1) of 914

Hi UE, Yup I'm pinching myself. Cohu has been my largest position for several decades. Conservative company and management, with a very solid balance sheet. They are admittedly in a very cyclical business. That is what makes the recent merger so powerful. Now their revenue is stabilized with the sale of consumables (recurring in the below chart). They have thousands of installed handlers globally and a service business that sells replacement parts. The sales of consumables has been over 50% of their revenue. That's what happens when new systems revenue is down. screencast.com The margins in recurring revenue average in the mid 60%! When new systems catch a gear , this little company will be printing money every 90 days. When 5G ramps and new systems is wide open throttle, they will be approaching 200 million per quarter. According to their mid range model chart (linked below) - they'll be running $2.40 to $3.00 a year. That makes today's 21 something look like a consolidation level. <smile> screencast.com The two above links are from this week's investor presentation that can be found on Cohu's website. It was a big dip that happened in August of 2018. It provided a wonderful opportunity to grow my position with some below average adds to my portfolio. All of my 2018 and 2019 adds were from puts being assigned to me. Better yet the majority of puts sold expired to $00.00, which helped me pay for those assigned. Many years ago Cohu was steady just above $30.00. The earnings came out and they collapsed to below $10.00. Although Cohu's recent high was 27.00 ish, I still wonder if there is not a resistance level at 30.00. If we ever do surpass that old high level of $30.00. I suspect we'll be well on our way to old ATH of $61.75. This is such a sleeper of a company. The wonderful aspect of owning Cohu is, my vision of tomorrow includes many more integrated circuits - all of which need 100% of electrical testing. Cohu has a lock on that sector of the market. It can have peaks and troughs, but it never goes out of demand. Just a quick note of Thanks for your regular reviews, and a sincere wish for all here to have a "Merry Christmas" and a "Happy New Year" ! Bob

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