“ASM International N.V. (ASMI) is a Dutch company that makes the equipment that enables semiconductor makers to produce their products, from LED fashioning to deposition, the process by which components are layered onto incredibly small semiconductors. ... Semiconductor equipment was hammered down during the recession, and ASM was no exception, but the company has come roaring back.
“In 2010, sales nearly doubled from the nadir of 2009, to $1.62 billion, producing net income of $2.97 per diluted share, compared to a loss of $2.28 in 2009. ASM’s shares have been reflecting the company’s rebound and its excellent competitive positioning, rising from 25 in November to a recent peak of 45. ... To ASM management’s credit, it used the crisis of the Great Recession to implement an extensive overhaul of its front-end operations, slashing 2008 expenses by 40% and boosting the gross margin of that part of the business by over 12 percentage points, from 28% to 40% in just two years. ... Shares began taking flight in November as the year-end rally and firm signs of industry recovery made quick work of the 30s. The 50-day average was not reliable support during that time; instead, 35 appears to have established itself as the level of good support. The recent move to 45 has been good, but only on modest volume. Drilling down into trading data suggests that institutional investors have been loading up on shares. Cabot Recommendation: Watch.”
Brendan Coffey, Cabot Global Energy Investor, 5/12/11
