What happened

Shares of engineered materials specialist II-VI (NASDAQ:IIVI) rose 15.4% in December 2019, according to data from S&P Global Market Intelligence. The climb started with a large contract related to 5G wireless systems and gained a second wind when II-IV was recognized as a market leader in optical components for Chinese device manufacturers.

So what

On Dec. 5, II-VI was tapped to provide silicon carbide substrates for gallium nitride radio-frequency power amplifiers in 5G wireless base stations. This multiyear agreement is the largest single contract in II-VI's history, worth more than $100 million over a couple of years. The stock jumped 4% in a single day on this announcement.

The next week, the China Optical Communications Development and Competitiveness Forum named II-VI the market leader in global optical components and auxiliary equipment. The company was also ranked No. 8 among optical communications enterprises in the Chinese market. Share prices rose 14% in two days around this event.

Computer rendering of a silicon wafer, etched with microchips but not yet cut.

Image source: Getty Images.

Now what

It's almost as if investors were looking for excuses to lift II-VI's share prices. The stock has underperformed the broader market with a 52-week gain of just 13%, and you can pick up II-VI shares at the bargain-bin valuation of 11.7 times forward earnings. That seems a bit low given that this company taps into the red-hot 5G wireless trend and is expected to boost its earnings at an average annual rate of 24% over the next five years.