Well, it looks like it's time for me to join my colleague, Seth Jayson, at the investing confessional. Like Seth, I recently missed out on a golden opportunity to make a lot of money on an investment, and for no good reason.

The company I inexplicably avoided owning is FormFactor (NASDAQ:FORM), which recently reported blowout earnings, propelling its stock up by 20%. I have no good excuse for missing out -- I was aware that the company has industry-leading technology and great growth prospects. Sure, I was a little concerned about the valuation, but I convinced myself that this business warranted a rich valuation. Adding insult to my financial injury is the fact that keeping up with this business is a breeze -- not because I have some magical ability, but because one of our Motley Fool Hidden Gems subscribers, Stan (a.k.a., platoish), does all the work for the rest of us at Hidden Gems. All we have to do is tune in to the FormFactor message board once a week or so to catch up on the latest developments.

So what has been happening at FormFactor?

Lots of things.

In the fourth quarter, FormFactor benefited from several transitions in the semiconductor industry. One of these is the move to smaller linewidths by their memory customers. Some are currently moving from 90 nanometers to 70 nanometers, although others are instead taking an interim step to 80 nanometers. Still other customers are setting up their 90-nanometer production lines. FormFactor sells probe cards no matter which transition is taking place.

A second trend is known as "KGD," or known-good die testing. KGD involves testing the individual die on the wafer before packaging. Since packaging is expensive and a single bad die requires that an entire package be thrown away, it isn't too surprising that semiconductor makers would like to avoid packaging-defective die. If you read Stan's posts, you know that there have also been many other good developments.

So what about the future? Well, there are several reasons to be optimistic. One new product that gained four new customers during the fourth quarter is called Takumi. The Takumi product is FormFactor's effort to increase its presence in the world's semiconductor fabrication facilities by testing wafers during manufacturing. This is appealing to semiconductor manufacturers if it can be done nondestructively, because identifying bad wafers early will allow them to compensate for process drifts and improve yields.

FormFactor currently has the wind at its back, with the semiconductor equipment cycle appearing to be in an upturn. It sure would have been nice had I gone ahead and bought some shares six months ago, but I guess I can console myself with the knowledge that there are some potentiallyworrisome trends in the financials.

Conduct yourself to further Foolishness:

FormFactor is a Hidden Gems pick. Try a 30-day free subscription and gain access to Tom Gardner's market-smashing scorecard of small-cap winners.

Fool contributor Dan Bloom still can't believe he doesn't own shares of FormFactor. Feel free to comfort him over email.