( TSIA), is down over 40% from its recent highs. One of the more intriguing new SPACs, TS Innovation Acquisitions Corp. Special purpose acquisition companies (SPACs) were red-hot last year and in early 2021, but these newly public companies have been hit hard in the recent tech rout. Ichor has been quite volatile amid the current tech sell-off, but I think that's unwarranted given its position in the growing semiconductor space and its status as a value stock. High investment in chipmaking, a "Buy America" mantra coming from the new administration, and a cheap valuation all line up pretty well for Ichor, which is headquartered in Fremont, California. and Europe are now desperately trying to bring back domestic capacity due to geopolitical concerns.
Over the years, chip manufacturing has become heavily concentrated in Asia, and the U.S. That means increased investment in semiconductor production capacity, which means more money for Ichor.Īdditionally, the Biden administration just asked Congress for $37 billion in funding to increase domestic manufacturing capabilities. Semiconductor manufacturers have been supply-constrained amid the pandemic, and now there's booming demand for chips across a wide range of applications - from leading-edge chips serving cloud and 5G to lagging-edge automotive chips. That's pretty cheap, especially as we're in the midst of a significant semiconductor shortage that should last throughout the rest of the year. More specifically, Ichor makes the fluid and gas delivery subsystems which go inside semiconductor production equipment - the machines that make today's leading chips.Īnother under-the-radar name, Ichor trades at just 13 times this year's earnings estimates, with a strong net cash position. Ichor Holdings ( ICHR 1.46%) is a $1.1 billion company that plays in the currently booming semiconductor space. Given the bargain-basement price of the stock, those repurchases should add lots of value for long-term shareholders. Even better, Super Micro recently completed a $50 million share repurchase program in the fourth quarter, and just initiated another $200 million repurchase program on its last earnings call.
The initial hacking scandal in 2018 proved to be a buying opportunity - the stock is up about 150% since October 2018 - and this time around could be a similar opportunity. National Security Agency, as well as all by of Super Micro's clients. However, that story has been largely debunked by the U.S. The stock recently pulled back after Bloomberg rehashed a story from 2018 claiming Super Micro's servers may have been hacked by Chinese intelligence. Super Micro also trades at less than 10 times 2022 earnings estimates, making it very cheap indeed.
Super Micro currently sports a $1.65 billion market cap, but also has about $270 million in net cash, good for an enterprise value under $1.4 billion. After all, Super Micro excels at customized enterprise servers that efficiently serve all of these end markets, thanks to its novel building-block architecture and energy-efficient designs. Server maker Super Micro Computer ( SMCI -1.81%) is an under-the-radar name that should benefit from increases in artificial intelligence, cloud, and 5G applications.
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