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How State Taxes Put a Bigger Pinch on the PoorAmkor 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 Q1 EPS of 36 cents and revenues of $699.5 million. Analysts had been looking for 26 cents and $684.3 million. The CEO attributed success to customer demand for wireless communications and networking applications. Management also guided Q2 EPS to 32-36 cents (28 cent consensus) and Q2 revenues to about $706-$720 million ($700.6M consensus).
The stock
popped on the news and then settled into a bullish "flag" consolidation pattern. Prices frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Brokers recommend the issue with one "buy", five "holds" and one "sell". Analysts see a 15% growth rate, through the next year. The AMKR P/E ratio (9.24), PEG ratio (0.93), Price to Sales ratio (0.78), Price to Book ratio (2.84), Price to Cash Flow ratio (3.98), Price to Free Cash Flow ratio (5.60), EPS Growth rate (100.00%) and Return on Equity (42.70%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 57% of the outstanding shares. Over the past 52 weeks, AMKR has traded between $6.14 and $16.29. A stop-loss of $9.85 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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