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5-Star Stocks Poised to Pop: FormFactor

By Brian D. Pacampara, CFA - Updated Apr 5, 2017 at 7:55PM

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This stock could bring market-beating returns.

Based on the aggregated intelligence of 125,000-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. Our data has shown that five-star stocks outperform the market by a significant margin; conversely, one-star stocks have woefully lagged the market average.

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

Headquarters (founded)

Livermore, California (1993)

Market Cap

$648.6 million

Industry

Semiconductor equipment

TTM Revenue

$290.8 million

Management

Founder/Chairman Igor Khandros

CEO Mario Ruscev

Return on Equity (average last three years)

5.9%

Competitors

Advantest (NYSE:ATE),

Cascade Microtech (NASDAQ:CSCD)

CAPS members bullish on FORM also bullish on

Apple (NASDAQ:AAPL),

Portfolio Recovery Associates (NASDAQ:PRAA)

CAPS members bearish on FORM also bearish on

General Motors (NYSE:GM),

UAL (NYSE:UAUA)

Sources: Capital IQ (a division of Standard & Poor's), and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, 964 of the 992 members who have rated FormFactor -- or 97% -- believe the stock will outperform the S&P 500. These bulls include afalk42 and Aggiemedic01.

In October, afalk42 noted that semiconductors "are going to continue to play a huge role in the industry, and the wafer probes made by these guys are essential for the semiconductor business. ... Should recover nicely and provide solid growth when the current fear-mongering is over."

In a pitch from earlier this month, Aggiemedic01 agrees, tapping FormFactor as a beaten-down, best-of-breed bargain:

Patience being the key word here. This is a depressed cyclical. Providing others don't catch up in terms of technology, when prices for the end product start turning up, FORM will shoot up as well. This may bounce around at low prices for a bit, but when it heads up, it will be a great stock to own.

What do you think about FormFactor, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. CAPS is 100% free, so simply click here to get started.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. FormFactor and Portfolio Recovery are Motley Fool Hidden Gems picks. Apple is a selection of Stock Advisor. The Fool's disclosure policy always gets a perfect score.

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Stocks Mentioned

FormFactor, Inc. Stock Quote
FormFactor, Inc.
FORM
$34.50 (-3.42%) $-1.22
Apple Inc. Stock Quote
Apple Inc.
AAPL
$164.87 (-0.29%) $0.48
General Motors Company Stock Quote
General Motors Company
GM
$37.56 (4.16%) $1.50
PRA Group, Inc. Stock Quote
PRA Group, Inc.
PRAA
$37.49 (-0.85%) $0.32

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

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