Based on the aggregated intelligence of 165,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, chip-testing equipment maker FormFactor (Nasdaq: FORM ) has earned a coveted five-star ranking.
With that in mind, let's take a closer look at FormFactor's business and see what CAPS investors are saying about the stock right now.
FormFactor facts
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Headquarters (Founded)
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Livermore, Calif. (1993)
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Market Cap
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$528.5 million
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Industry
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Semiconductor equipment
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Trailing-12-Month Revenue
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$147.6 million
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Management
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CEO George Everett, Jr. (since May 2010)
CFO Richard DeLateur (since May 2010)
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Return on Equity (Average, Past 3 Years)
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(11.4%)
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Cash/Debt
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$432.8 million / $0
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Competitors
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Advantest (NYSE: ATE )
Cascade Microtech (Nasdaq: CSCD )
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Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 98% of the 1,467 All-Star members who have rated FormFactor believe the stock will outperform the S&P 500 going forward. These bulls include tytymhorau and TMFJoe.
Two months ago, tytymhorau tapped FormFactor as a tantalizing top dog:
California-based semiconductor small-cap produces the leading probe cards for bulk-testing DRAM and other memory chips. The cost-effectiveness of their bulk-testing approach should maintain desirability over the competition as new devices using these chips continue to proliferate.
Specifically, FormFactor's state-of-the-art Microspring technology allows chip makers like Intel (Nasdaq: INTC ) and Elpida Memory, two of its biggest clients, to test more devices at a time than close rivals Advantest and Cascade. Of course, even a significant tech moat isn't enough to protect against general semiconductor and market malaise, as FormFactor's near-50% plunge over the past three months clearly demonstrates. But with PC sales continuing to improve and Intel having posted record-setting results earlier this week, CAPS members like TMFJoe think the demand for FormFactor's probe card solutions should only get stronger over time:
At the bottom of this cyclical industry, [FormFactor's] technology is still solid and I would look for them to benefit from any upswing in the sector. That the cash on their balance sheet represents about 80% of their market cap today doesn't hurt either; gives a little security.
What do you think about FormFactor, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!
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