Amkor Technology (NASDAQ: AMKR) is
a leading provider of semiconductor assembly and test services. The firm offers semiconductor companies and electronics manufacturers a complete set of microelectronics manufacturing services, including die bonding, wire bonding, chip encapsulation, and verification of function, current, timing, and voltage. Clients include IBM (NYSE: IBM), Intel (NASDAQ: INTC) and Texas Instruments (NYSE: TXN).
The company surprised the Street last week, when it reported Q4 EPS of 46 cents and revenues of $747 million. Analysts had been looking for 28 cents and $700 million. Management also guided Q1 EPS to 25-29 cents (23 cent consensus) and Q1 revenues to about $680-$695 million ($676.10M consensus). Lehman Brothers subsequently reiterated its overweight rating.
The stock
popped through 200-day moving average resistance on the news and then settled into a bullish "pennant" consolidation pattern. Prices frequently exit pennants moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Altogether, brokers recommend the issue with two "buys", four "holds" and a "sell". Analysts see a 14% average annual growth rate, through the next five years. The AMKR P/E ratio (10.16), PEG ratio (1.02), Price to Sales ratio (0.75), Price to Book ratio (3.13), Price to Cash Flow ratio (4.05), Price to Free Cash Flow ratio (5.57), EPS Growth rate (53.33%) and Return on Equity (41.94%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 59% of the outstanding shares. Over the past 52 weeks, AMKR has traded between $6.14 and $16.29. A stop-loss of $10.00 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.
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