2018 Investment Series Post 11

Everyone loves payday. Just like everyone else, once I get that sweet deposit in the bank it starts burning a hole in my pocket. Before much time I am ready to blow it all on a shopping spree. My store of choice is the stock market, and I’m shopping for the best deals on companies. Here is what I dropped my $1,000 on this Friday, May 25th.

Axcelis Technologies Inc.

The eleventh pick of the Let’s Be Millionaires investment series goes to Axcelis Technologies Inc. (ACLS).

With the growth of smartphones and other smart devices over the past decade came the growth of the semi-conductor industry. Many companies compete to supply the Apples and Samsungs of the world with the micro-chips that their electronic products demand.

Axcelis Technologies Inc. is a small manufacturing company that is capitalizing on the semiconductor trend from another angle. Axcelis builds the machines that other companies use to manufacture semi-conductors. I like this angle, especially since the chips are getting smaller and smaller, which means manufacturers will need machines that can meet new demands over the years, and as long as Axcelis can stay on the cutting edge, demand for their products shouldnt go anywhere.

Check out Axcelis Technologies Inc..

About The Stock

Over the last 5 years just like many of the semi-conductor companies it serves, ACLS stock has had a great run. The share price has gone from around $5 a share in may of 2013 to a peak of around $37 a share at the end of 2017. The stock has cooled off considerably since that peak and is now around $22 a share.

The stock currently has a P/E ratio of 6.2 which is actually very low, essentially meaning that the stock could be considered “cheap” based on the earnings that the company generates.

The company has a market cap of around 700 million dollars. This stock would be considered a small-cap, growth, tech stock.

The Speculation

While the semi-conductor space is very competitive and rapidly changing I think that being an equipment provider for the companies in that space can be a sustainable business. Capital equipment is meant to last several years and since servicing equipment and training employees on its proper use is also part of Axcelis’ business they can maintain strong, consistent relationships with their customers.

I think that Axcelis has room to grow and prove them selves to be a real player in the space of semi-conductor manufacturing equipment. If that proves to be true then they won’t be trading at a 6.2 P/E for long while the broader market is trading around a 25 P/E.

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