The global semiconductor industry is expected to expand at a CAGR of 10% between 2021 to 2026. The rising demand for semiconductors is a corollary to the increasing use of smartphones, data centers, consumer electronics, etc. thanks to COVID-19 pandemic-driven trends.
In addition to a continuing increase in demand, a supply shortage is driving the prices of chips higher. This should continue to benefit semiconductor manufacturers until supply increases to meet the demand.
We think it advisable to invest in small-cap stocks in this industry now because the current low interest rate environment and rising Treasury yields bode well for small-cap stocks. Also, small-cap stocks typically have greater upside potential versus their large-cap counterparts.
Axcelis Technologies, Inc. (ACLS – Get Rating), Camtek Ltd. (CAMT – Get Rating), SMART Global Holdings, Inc. (SGH – Get Rating), and Veeco Instruments, Inc. (VECO – Get Rating) are working on next-generation products and we think their shares possess significant upside potential.
ACLS develops, manufactures, and markets the processing equipment required in the manufacture of semiconductors. The company has worldwide operations. ACLS’s stock has gained 109.5% over the past year to close yesterday’s trading session at $38.23.
The company recently implemented the first shipment of its new Purion H200 SiC Power Series implanter. ACLS has also started shipping its Purion XEmax™ high energy evaluation system.
For the quarter ended December 31, 2020, the company’s revenue rose 14% compared to the same period last year. Its gross profit increased approximately 18.1% during the same period.
ACLS is expected to see revenue growth of 6.3% for the quarter ended March 31and 12.2% in 2021. Its EPS is estimated to grow 30.4% in 2021 and 20% per annum over the next five years.
ACLS’s strong fundamentals are reflected in its POWR Ratings. The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.
It has a grade of B for Momentum and Value. In the B-rated Semiconductor & Wireless Chip industry, it is ranked #41 of 99 stocks.
In total, we rate ACLS on eight different levels. Beyond what we’ve stated above, we have also given ACLS grades for Growth, Quality, Sentiment, and Stability. Get all the ACLS ratings here.
CAMT develops, manufactures, and markets automated optical inspection (AOI) systems and functional ink technology products. The company operates in the printed circuit boards and microelectronics segments.
CAMT’s revenue is expected to increase 82.1% for the quarter ended March 31 and 31.5% in 2021. Its EPS is estimated to increase 40.6% in 2021 and at a rate of 15% per annum over the next five years. CAMT has returned 233.9% over the past year to close yesterday’s trading session at $28.28.
CAMT recently received a…
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