*AV*--The $50 target is not a precise calculation. It factors in historical pricing, margins on the integrated indexers that will be sold to equipment vendors and to fab customers, expansion programs, factory automation programs, smart travellers, etc.
I did many SMIF projects and was an unpaid consultant on other projects. My personal experiences writing Capital Requests, dealing with the Budgets, installation timeframes, and negotiating the purchase order gives me some insight as to the financial aspects of this enterprise.
I interpolated the number of expansion and upgrade projects they can handle and complete in a given timeframe, along with my perception of the value of their OEM business, and other prodcut offerings and made what I believe to be an educated assessment for their price. Part of this price included herd mentality and PE multiples that were sustainable.
This leads us to the most important aspect of the target price, what the market will bear. The market sometimes puts unrealistic values on companies (many internet stocks with massive losses) both to the upside and downside. The undiscovered gem phenomena could keep ASYT below $50 but allow an Internet stock with crippling losses to attain an unthinkably high market valuation.
No one can really predict where a stock will trade. My target price is not a guarantee but rather a price that this stock can achieve if things progress as I expect. With 10 new projects and the recent TSM announcement for a 12 inch fab, the 300mm initiative could take off. most of the 300mm equipment will have integrated indexers or other ASYT automation products.
Finally, to play Devil's Advocate, I am probably too close to the situation and have more data and experience than most people trying to determine target prices. Sometimes being too intimate with a subject clouds our objectivity even if we do not think it has.
AV |
