If you're aiming to "buy low and sell high," then it makes infinite sense to start your search with bargain-priced stocks. Regularly reviewing a list of stocks trading near their 52-week lows can be a great first step.
In this series, I do the initial legwork for you. To prevent us from being inundated with scores of disparate companies, I conduct my search by industry. This allows us to make some initial comparisons among semi-related companies.
Today, let's look at the semiconductor equipment space. Below are the nine semiconductor equipment stocks that are within 20% of their 52-week lows and have market caps above $200 million.
|
Company |
Recent Price |
52-Week Low |
52-Week High |
P/E Ratio (Trailing) |
|---|---|---|---|---|
|
FormFactor |
$6.09 | $5.81 | $11.05 | NM |
|
MEMC Electronic Materials |
$6.64 | $4.58 | $15.04 | NM |
|
AXT |
$4.79 | $4.31 | $12.23 | 5.9 |
|
Applied Materials |
$12.62 | $9.70 | $16.93 | 7.6 |
| Advantest | $10.98 | $9.93 | $23.11 | NM |
|
Aixtron SE |
$10.75 | $8.76 | $34.02 | 6.6 |
| Cohu | $11.45 | $9.21 | $17.35 | 10.7 |
|
Veeco Instruments |
$28.13 | $23.06 | $57.67 | 4.4 |
|
Rubicon Technology |
$10.81 | $9.25 | $29.79 | 4.4 |
Sources: S&P Capital IQ and Yahoo! Finance. NM = not measurable.
I have personal experience with the company closest to its 52-week low: FormFactor. I bought into shares because of its massive cash balance and the hopes of a turnaround. I wrote about the possible opportunity in the summer of 2010, saying:
FormFactor makes testing equipment for the semiconductor industry. The industry as a whole has been on a roller-coaster ride, and FormFactor has suffered painful losses and a management shakeup recently. However, the company boasts 80% of its market capitalization in cash. In other words, if the stock is trading at $10, you're really getting its business operations for $2.
Well, today I still own shares and they're worth about half of what they were back then. FormFactor has continued to drain its money, but since its stock price has fallen so much, it actually has more net cash than the company is worth. I don't say this to denigrate FormFactor, but mention it as a cautionary tale when you look at the numbers.
There are a lot of very low P/E ratios in the table, but make sure you're comfortable those businesses will allow the low multiples to pay off.
If you are interested in continuing your research on a stock mentioned here, add it to My Watchlist to stay abreast of all of our Foolish analysis.
