Preparing for a Lithium Rush
My view is that catalysts for self-driving cars will also drive a transition to battery-powered electric vehicles. A shift from human driver to machine driver will initially add significant new computational costs to the vehicle bill of materials (BOM). One way to accommodate such costs in the BOM is to replace IC engine powertrain with […]
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$PLAB AMOLED Inflection in 2017
Photronics (PLAB) makes photo masks for semiconductor and display panel manufacturing. The chart below shows PLAB’s revenue mix. Over the last 6 quarters, flat-panel display (FPD) revenues have grown on average at 18% YoY, while IC revenues grew at 4%. If the display industry inflects toward AMOLED, as I think it is likely to, PLAB’s […]
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$INVN Valuation & Momentum Indicators
The chart below suggests that INVN stock price is tracking below NTM EPS projections, an understandable dynamic following severe dislocation in Invensense’s gyro/OIS market share, particularly in Samsung smartphone. Invensense experienced elevated pricing pressure surrounding its loss of market share at Samsung. Pricing pressure translated into lower gross margins. At EV/S of ~1.8x […]
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$AMZN Valuation Risk
Let’s assume that sellside estimates are representative of investor expectations for $AMZN (as discussed in my book, that is not always the case). The NTM EPS chart below shows consensus projections through 2020. Sellside EPS estimates reflect expectations for continued strong, if not accelerating EPS growth over the next few years. Now look […]
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3 Reasons to Own $MU
I believe there are 3 reasons to continue to own $MU: 1) early stage of a cyclical recovery, 2) technology catch-up, and 3) inexpensive play on VR/AR and Self-Driving Car. Cyclical supply/demand recovery: A combination of supply cuts and demand upgrades has pushed the memory industry into a favorable supply/demand environment, which is […]
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aMP Performance Update 2Q16
The chart shows acteve Model Portfolio (aMP) indexed value (net of fees) vs. the S&P 500 market index (indexed to 10/31/15), as of 6/30/16. The chart also shows the cash allocation in the portfolio. As of 6/30/16, more than 40% of aMP assets were held in cash, given my view that the market environment was […]
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