UCTT - you have me curious on this one. If S.Alpa data is right, they're trading right now on a trailing P/E of a little over 5.
I notice several things from the recent 10-Q:
On the positive side, earnings grew, they reduced debt, they raised a ton of cash on the offering back in Feb.
But also:
--their sharecount increased about 13% as i see it from y/y: "On February 2, 2018, the Company successfully completed a follow-on offering whereby the Company issued 4,761,905 shares of its common stock. The weighted average impact for the six months ended June 29, 2018 was 3,872,318 shares." "Number of shares outstanding of the issuer’s common stock as of July 27, 2018: 38,935,221"
--gross margin for the qtr shrank from about 19% to about 15.9% y/y.
--"We expect sales to be lower in the third quarter of fiscal 2018 due to forecasted weaker demand in the semiconductor industry." p. 22.
--and, last but not least, they made the big acquisition, and acquisitions often (not always) dampen enthusiasm among certain 'tute investors....
"On July 24, 2018, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) to acquire Quantum Global Technologies, LLC (“Quantum”), for approximately $342.0 million in cash, subject to certain closing adjustments as provided in the Merger Agreement, including a working capital adjustment, and up to $15.0 million of potential cash earn-out payments if Quantum achieves certain specified revenue levels through December 27, 2019, pursuant to the provisions of the Merger Agreement. The Company’s primary reason for this acquisition is to expand UCT into an adjacent market and increase the served addressable market in its core semiconductor business.
The Company also entered into a commitment letter (the “Commitment Letter”) with Barclays Bank PLC (“Barclays”), pursuant to which Barclays has committed to provide senior secured credit facilities to the Company in an aggregate amount of $400.0 million, comprised of (i) $350.0 million under a seven-year senior secured term loan B facility (the “Term Loan”) and (ii) $50.0 million under a five-year senior secured revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan, the “Credit Facilities”). The Term Loan, together with cash on hand, will be used to finance the transaction contemplated by the Merger Agreement, refinance existing debt, and pay fees and expenses incurred in connection with the Credit Facilities and the acquisition. The Revolving Credit Facility will be used to provide ongoing working capital and capital for other general corporate purposes of the Company and its subsidiaries.
The Merger is expected to close in the third quarter of 2018, and is subject to customary regulatory approvals and closing conditions, including the expiration or termination of the waiting period under the Hart-Scott- Rodino Act. Barclays’ commitment to provide the Credit Facilities is subject to customary closing conditions."
