AXT Inc (AXTI)

[RedStick]

The industry average P/E is 27.9 w/ some semiconductor companies having P/Es as high as 53. We'll be conservative and use 20. The company issued guidance of .04-.07 for Q1'10, historically their slowest quarter, and attributed the positive demand environment for substrates as the reason they expect to offset normal seasonality. The current consensus estimate is .035. The company has already given us guidance higher than that figure, so it should be an easy beat. Let's be conservative again and use .04 and then let's assume they (again, being conservative IMO) earn .05 in Q2, .06 in Q3, and .07 in Q4. That's .22 for the year. Using our P/E of 20, that puts us at $4.40, an easy 33% increase from today's levels, and with conservative figures to boot. If the company can crank out .07 in earnings this quarter (remember, their slowest) and then let's just say they earn that amount in each of the three remaining quarters, that would put us at $5.60 - again using somewhat conservative estimates. Let's say our dream comes true and the company reports EPS for the year of .30 and we are awarded the industry average P/E of 27.9 - that would come out to $8.37.

As you can see, whether you value the company liberally or even with extreme conservatism, AXTI is an easy winner.

http://finance.yahoo.com/news/AXT-Inc-Announces-Fourth-iw-1648647646.html?x=0&.v=1