Why Amkor Technology Inc. Shares Surged

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Amkor Technology  (NASDAQ: AMKR  )  gained over 10% today after the semiconductor product packaging and test services company yesterday evening reported revenue and earnings that topped Wall Street's expectations.

So what: Amkor's first-quarter revenue grew a mere 1.2% year over year to reach $696 million, but this was well ahead of the modest $678.5 million Wall Street had expected. Earnings of $0.09 per share also trounced Wall Street's expectation of $0.02. Looking ahead, Amkor executives expect the company to generate between $735 million and $785 million in revenue for the second quarter, which handily bests the analyst consensus of $732.9 million on the top line. The company also projected between $0.08 and $0.12 in EPS, which hits the $0.12 analyst consensus on the high end but falls short on average. Investors on Tuesday looked past Amkor's mediocre EPS guidance in favor of strong revenue.

Now what: Amkor has had a tough time pushing revenue or EPS higher over the past few years -- its top line is effectively flat since the end of 2010, and EPS has fallen quite a bit over that same period. The company's free cash flow has also fallen into negative territory since 2010, but there are signs that this weakness is reversing. At a 15.4 P/E, Amkor isn't quite expensive, but this valuation is about average for its post-2010 period as well. I'd tread cautiously here, but this could be a chance to buy into further gains if Amkor can keep its EPS on a growth trajectory.

Are you ready to profit from this $14.4 trillion revolution?
Let's face it, every investor wants to get in on revolutionary ideas before they hit it big. Like buying PC-maker Dell in the late 1980s, before the consumer computing boom. Or purchasing stock in e-commerce pioneer Amazon.com in the late 1990s, when it was nothing more than an upstart online bookstore. The problem is, most investors don't understand the key to investing in hyper-growth markets. The real trick is to find a small-cap "pure-play" and then watch as it grows in EXPLOSIVE lockstep with its industry. Our expert team of equity analysts has identified one stock that's poised to produce rocket-ship returns with the next $14.4 TRILLION industry. Click here to get the full story in this eye-opening report.


Read/Post Comments (1) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Add your comment.

DocumentId: 2935564, ~/Articles/ArticleHandler.aspx, 7/28/2014 7:18:40 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 2 days ago Sponsored by:
DOW 16,960.57 -123.23 -0.72%
S&P 500 1,978.34 -9.64 -0.48%
NASD 4,449.56 -22.54 -0.50%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

7/25/2014 3:59 PM
AMKR $9.79 Down -0.41 -3.97%
Amkor Technology,… CAPS Rating: **

Advertisement