Nice writeup on PRIA in April issue of Smart Money...
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Another big winner in the plant of the future will be the suppliers of automation equipment. Consider this irony: Semiconductors are used in the most sophisticated applications of consumer electronics, but much of the manufacturing of chips themselves still involves workers carrying silicon wafers around between manufacturing steps.
The latest advances in semiconductor design -- which require a 300-millimeter wafer -- will bring an end to much of that. For one thing, 300mm wafers and their containers will weigh nearly 20 pounds. For another, a wafer with up to 3,000 chips on the surface will be worth well over $400,000 -- not something you want to drop. "The plant of the future will only need a man and a dog," runs the line at equipment conferences these days. "The man will be there to feed the dog, and the dog will be there to keep the man away from the equipment."
The leading maker of automated wafer-transport systems, with 90 percent of the North American and European markets, is PRI Auto mation (PRIA), an $820 million company based in Billerica, Mass. In recent years, building a new wafer-fabrication plant meant you had to buy about $10 million to $20 million of PRI's equipment. CFO Stephan Allison says it conservatively expects to sell $50 million to $70 million per factory as 300mm wafers become standard.
Right now PRI trades at 4.5 times sales, but it, too, has often traded at three times sales or less. This suggests you should jump into this stock -- now trading at a little under $41 -- at around $27.
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