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Technology Stocks : Cohu, Inc. (COHU) -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (7585)	8/4/2023 9:31:20 AM
From: robert b furman	1 Recommendation Recommended By Kirk © Read Replies (1) \| Respond to of 7822

Well after a very weak guidance yesterday Cohu dropped over $4.00, and then recovered 2.00 of the loss. In between yesterday afternoon Needham reiterates their BUY and maintained their price target of 52.00 This morning B Riley lifts their price target from 50 to 51. Premarket trading tis morning zero volume but it shows a last in yesterdays post trading is up 51 cents to $40.64. Bottomline , there was some powerful dip buying that more than absorbed the knee jerk reaction to sell. Market maker surely got hi sub $40.00 inventory sufficient to assign 49,300 shares required to close out the assignments required by the open interest of 493 $40.00 calls. He's got his monthly paycheck out there looming in two weeks from today as long s price holds above $40.00. There is one very nice number that may have been overlooked in the report and it was the huge jump in CASH. Cohu always manages their cash very well. Receivables dropped and it all went to cash. Their nascent debt of 31 million results in interest expense of 727,000, which gets dwarfed by their 372,317,000 in cash which generates 2,732,000 in interest income. So 2 million a quarter of interest income to keep buying back more shares and grow that EPS. Now 48 million diluted shares outstanding, down from near 50 million last year. To draw a comparison to their big brother peer Teradyne which currently has a multiple of 28 and a historical multiple of 19 (real close to Cohu's H1 non gaap earnings of $1.04 or 2.08 annualized, and a multiple of a tad under 20. The sell side brokers are saying there's another 10 points in Cohu (25% upside). So when we hear value is what's going to move in the H2 of 2023, they're talking our book. Today's Morgan Stanley economist pointed out that the economy sector that stands out and is growing is structures construction. The building of fabs and structures is doing well. Huge government funding not yet issued, but the semi business is spending on onshoring. The time is near that those empty buildings will be getting new state of the art semi equipment. When the ramp on that new equipment hits Cohu is going to print cash, and most likely buy back a lot of shares NOW, while the price multiple is historic not expensive. Bob