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$2.91 -0.12 (-3.96%)
7/3/2008 1:00 PM

ChipMOS Technologies Ltd. (IMOS)

CAPS Rating:
****

The Company provides a range of semiconductor testing and assembly services for memory, mixed-signal, and LCD and other flat-panel display driver semiconductors.

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Recs

1

Avatar Knifecatcher1 (23.43) Submitted: 12/22/07 2:24 PM : Outperform Start Price: $4.21 IMOS Score: -15.75

Ok Guys. I understand that by default there will be a good-sized discount built into a Taiwanese company, due to political risk. It's also a given that all chip fabricators will sell at a discount to the overall market, especially when slowing economics are widely anticipated. Yes, sales are concentrated to few customers. And if that's not enough, the TW. government last summer indicted IMOS for "inappropriate use of company funds".

But is there any limit to the bad news, and accompanying carnage, in this stock?

P/E is about 5, (fwd ~4), P/B is 0.7, P/S is 0.6. Just doesn't seem rational, does it?

As of today it can still drop another $4.21, and despite the CAPS gamble, I'm not putting real money on it. So here goes nothing.

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Avatar Harold71 (83.51) Submitted: 12/26/07 9:37 PM

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Yeah. It just keeps going down...I didn't know about the company funds thing...this was recommended to me by someone who knows more than I do.


But I did look into it, I guess I liked the numbers.

Price to cash flow ratio of 1.2.

How many companies can you buy, where you can pay for the company with 1.2 years of cash flow? Even if cash flow dropped by half, the P/CF would still look ridiculous.

ROI 5 year average = 10.5%
D/E is a bit high for me, but they have good coverage (26x).

Yes apparently management has problems, but if the books aren't fraudulent, this is a buy.

Sell the company off, it should go for 25-30% more than this.

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Avatar Knifecatcher1 (23.43) Submitted: 12/28/07 9:46 AM

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Thanks, Harold71,

Maybe the fraud issues is the main thing pushing IMOS down. I owned a provincial chinese internet provider, CXTI, and lost everything. Numbers looked impressive, and it got "unbelievably cheap". Apparently their books were cooked. News about the company essentially stopped. Waiting for a class-action to recover .... nothing.

Let me know if you actually buy shares of this one (or did you already?). I'm going to watch this one with a jaundiced eye.

Best. kc

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Avatar Harold71 (83.51) Submitted: 12/28/07 11:28 PM

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Yeah, I am in a little under $5, just a small position. Hopefully it works out, but I am a bit more leary of following recommendations...simply didn't do enough of my own DD here.

The price to tangible book ratio made it seem relatively safe, perhaps too much so. Time will tell, right now it is ugly out there...

"Mr. Cheng [CEO of IMOS] has informed the Company that he will continue to vigorously defend the charges and seek to have the 'not guilty' verdict sustained upon appeal."

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