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Why Kulicke and Soffa Is Ready to Rebound

By Brian D. Pacampara, CFA - Apr 5, 2013 at 11:10AM

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Market-trouncing returns could be written in this 5-Star.

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, chip equipment maker Kulicke and Soffa Industries (KLIC 3.25%) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Kulicke and Soffa and see what CAPS investors are saying about the stock right now.

Kulicke and Soffa facts

Headquarters (founded)

Singapore (1951)

Market Cap

$807.1 million

Industry

Semiconductor equipment

Trailing-12-Month Revenue

$785.0 million

Management

CEO Bruno Guilmart (since 2010)

CFO Jonathan Chou (since 2010)

Return on Equity (average, past 3 years)

36.8%

Cash/Debt

$494.2 million / $0

Competitors

ASM Pacific Technology

BE Semiconductor Industries

Teradyne

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 96% of the 351 members who have rated Kulicke and Soffa believe the stock will outperform the S&P 500 going forward.

Just yesterday, one of those Fools, personaltrader, tapped Kulicke and Soffa as a particularly attractive bargain opportunity:

The valuation is just comical. Market cap of $300M when you subtract out cash, no debt and P/FCF of 4 (closer to 1.5 when you subtract out cash), P/E of 5 (2 when you subtract out cash) and reasonable P/B. Very cyclical, but poised to weather any storm. Potential growth with increasing smartphone competition and LED market expansion (CFL's have mercury, LED's last 20 years, so market will shift).

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

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Stocks Mentioned

Kulicke and Soffa Industries, Inc. Stock Quote
Kulicke and Soffa Industries, Inc.
KLIC
$53.37 (3.25%) $1.68
Teradyne, Inc. Stock Quote
Teradyne, Inc.
TER
$109.40 (4.25%) $4.46

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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