Diodes, Inc. (NASDAQ:DIOD)
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Global supplier of low pin-count standard semiconductor products. The Company designs, manufactures & markets semiconductors focused on diverse end-use applications in the consumer electronics, computing, industrial, communications & automotive sectors.
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DIOD is not the most explosive growth story but is a solid performer trading at a P/E of 16, which is more or less its near-term growth rate. However, this stock hardly ever trades at such low values, it usually trades at a premium to its growth rate, see bigcharts.com. It’s expected rate of growth in the long run is 18.75%. The stock has been punished severely in the recent downturn, I expect it to return to its normal valuation in the short term. EPS growth will have to come from sales growth as gross margins and operating margins have actually been decreasing in the last 2 years, which is a point of concern. Come to think of it, maybe that’s why the stock is >35% off of its 52-week high. Consider selling if the stock passes $30, and watch out for those margins.