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Friday, 12/15/2017 11:09:34 AM

Friday, December 15, 2017 11:09:34 AM

Post# of 658808
AEHR - $63M mkt cap. Customers: Apple,Intel,Texas Instruments. $14M cash and little debt. Management says they will be profitable for 2018 (they are already 2Q’s into their 2018 fiscal year). Traded as high as $6.10 earlier in the year. 52 week low is $2.15 so certainly much closer to the low right now than the high (reasons imo below), and showing signs of a rebound. Most don't know that they have huge clients as customers. It's only when you look into the latest 10K for 2017 you’ll see where they are forced to name check clients that generate over 10% of revenues. They continue to gain more Tier 1 clients: http://www.aehr.com/wp-content/uploads/2017/09/2017-Annual-Report.pdf “During fiscal 2017, Texas Instruments, STMicroelectronics, Inc., Intel, and Cypress Semiconductor, accounted for approximately 45%, 19%, 17% and 10%, respectively, of the Company’s net sales. During fiscal 2016, Apple and Texas Instruments accounted for approximately 47% and 32%, respectively, of our net sales.” Their headquarters are in Silicon valley, Fremont. They are in the quickly growing chip space with little competition. Yesterday’s press release shows Intel (they couldn't say "Intel" in PR, but that's who it is) continuing to grow their confidence with AEHR. The CEO is typically very conservative. Two calls ago when someone asked for more color in regards to if there are big orders headed their way, he said he to look for ‘body language’ in future news to help gauge. In yesterday’s PR he said they are “Front end of a wave of opportunity for AEHR"….I believe that is a bit of a nudge.

Forward PE is only 8 which is significantly undervalued for a company that’s now growing at 50% and who is now PROFITABLE. They had $18.9M revs in 2017. And management forecast is at least $28.3M revs for 2018 (mgmt said on recent ER CC that “floor” is 50% growth for 2018). Their Q3 for 2018 begins in January…

Stock was near $3.50+ in early November. Imo the stock went down recently because of tax selling as well as a notice the Nasdaq put on the ticker which people read too much into and sold. Little did they know it was simply for not having one of their Board of directors seats filled, which is now filled and Nasdaq will remove notice shortly. I don’t rely on seekingalpha at all, but someone (not me) posted an article last night that sums things up decently. https://seekingalpha.com/article/4131952-aehr-test-systems-buy-2-chip-stock-2018-growth-potential

I search for undervalued companies that are very small, generally undiscovered (key aspect to me), have clean balance sheets, significant growth, and tier 1 customers. Buyout candidates. AEHR meets all of those criteria and it's not too terribly far off the 52 week lows(compared to highs)…especially considering the news that’s came out yesterday and over the last couple months. People will take notice at some point. Right now not very widely followed at all. Hope you Orions did well (75%+) off my last pick.

Here is a summary of AEHR's business: "Aehr Test Systems designs, engineers, manufactures, and sells test and burn-in equipment used in the semiconductor industry worldwide..."
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