Ultratech, Inc. (NASDAQ:UTEK)

CAPS Rating: 2 out of 5

The Company develops, manufactures and markets photolithography and laser processing equipment designed to reduce the cost of ownership for manufacturers of integrated circuits.

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Member Avatar MKArch (99.67) Submitted: 6/2/2013 8:51:53 AM : Outperform Start Price: $36.75 UTEK Score: -58.04

Niche semiconductor equipment company with advanced technology that reminds me a lot of an old favorite TMF H.G. Formfactor (FORM). One of the lessons I learned from following FORM is that no matter how much I read up on these companies I'll never be an expert so I'll try to keep my pitch free from too much technical jargon. There is a process in the manufacture of semiconductors called annealing that takes place at the nanometer level that the traditional tools are starting to reach their limits. Ultratech has a process called Laser Spike Annealing (LSA) that can handle the smaller nodes the industry needs to get to in order to keep adding more stuff to chips to make them more complex (Moore's Law). I picked on UTEK from M* and they put UTEK at 60%-65% share in LSA, Dainippon at 20%-25% share and AMAT at 10%-15%. Right now the technology is gaining traction in the logic chip segment but M* believes it will eventually be adopted in the larger memory segment which could result in something like a 10X increase in addressable market.

Currently the chip industry is facing a dilemma, there are two competing architectures 2-D and 3-D. 3-D is more advanced but facing some technical problems and thus chip makers have held off on committing to equipment purchases until they decide on a direction. This caused Ultratech's stock to plummet when management reported sales growth would suffer in 2013 because of this indecision on their customers parts. The stock has bounced back a bit recently as management clarified that they expected shipments to pick up again at the end of the year. Unfortunately for me I didn't pick up on this opportunity before the bounce back but at 18X earnings this one still looks cheap to me. At a $1B market cap it also looks like a buy out candidate for the industry behemoth AMAT.

On the downside, one of the lessons I learned from my investment in FORM is that I'm never going to fully understand this industry and when you invest in a niche bleeding edge technology company, you can get blind sided pretty quickly. I plan on buying some for my real portfolio as well but I'm keeping it small.

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Member Avatar JonBarleycorn (70.22) Submitted: 11/28/2012 8:11:20 PM : Underperform Start Price: $32.90 UTEK Score: +69.28

Poor All Star outperform fraction with divergence (1.57).

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Member Avatar audr (31.92) Submitted: 4/5/2011 5:41:50 PM : Underperform Start Price: $10.57 UTEK Score: -67.82

Can you spell bubble !

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Member Avatar drborst (57.68) Submitted: 12/22/2009 6:48:30 PM : Underperform Start Price: $14.58 UTEK Score: +18.58

This is part of a tech run up that lost site of valuations.
UTEK has two products. Advanced Packaging Lithography and Laser Spike Anneal. Most outperform picks likely look at LSA as the growth side and packaging as vunerable to competition. But I don't think that is the case.

Laser Spike Anneal is a promising technology, but the major semiconductor manufacturers are likely worried about buying critical technology from such a small company, and other larger competitors will likely fill this niche with flash anneal or rapid themal processing before it takes off for UTEK. I think their best bet would be to spin this off and sell it to a Novellus or AMAT. A larger company would find this more valuable.

The Packaging segment is really low end lithography. The obvious competition would be from high end litho vendors like Nikon or ASML. But adapting the high end technology to the lost cost and relatively low volume market segment where UTEK plays is harder than it seems. At best they could sell a few tools and lower their overall margins in the process, at worst, they could invest in the segment and find out its harder than they anticipated and get no return at all.

Packaging is the growth segment for UTEK, but management doesn't realize it. The big semiconductor manafacturers are 5-7 years away from 450 mm wafers, the cost reduction from the wafer size doesn't effect die level tasks like packaging and test, once they notice this, they will start investing in these two segments and UTEK will be well placed to benifit. I suspect someone like AMAT will realize this and buy them when the price is right, and it isn't right today.

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Member Avatar Nostradamuss (< 20) Submitted: 10/20/2009 11:35:45 PM : Underperform Start Price: $14.55 UTEK Score: +23.05

-

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Member Avatar nrbonner (80.57) Submitted: 2/28/2009 2:30:08 PM : Underperform Start Price: $10.56 UTEK Score: +59.41

Good grief how can this maintain their lofty valuations? Very little upside but huge downside potential.

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Member Avatar StockBling (20.14) Submitted: 8/28/2008 3:04:44 PM : Underperform Start Price: $15.33 UTEK Score: +6.56

P/E of 60?? I'd be very surprised if they can actually grow at that rate, there hasn't been any clear growth trend in the past yrs/quarters. Wayyy overpriced.

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Member Avatar hondo928 (99.64) Submitted: 8/26/2008 12:30:58 PM : Underperform Start Price: $14.64 UTEK Score: +2.99

pile o crap

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Member Avatar ValueNAV (95.89) Submitted: 8/7/2008 11:41:22 PM : Underperform Start Price: $15.24 UTEK Score: +10.07

Possible future growth is overpriced into the stock.

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Member Avatar smitin (73.40) Submitted: 7/15/2008 7:19:09 PM : Underperform Start Price: $13.97 UTEK Score: +2.73

.

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Member Avatar RCresic (76.10) Submitted: 6/30/2008 10:09:49 AM : Outperform Start Price: $15.56 UTEK Score: -11.78

Recent developements have caused me to think that they have finally found their niche and streamlined their production

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Member Avatar Hakim99 (74.46) Submitted: 6/27/2008 2:47:00 PM : Underperform Start Price: $15.60 UTEK Score: +11.73

ridiculous P/E. Unsustainable

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Member Avatar ScreenerStizBear (87.03) Submitted: 6/26/2008 2:29:59 PM : Underperform Start Price: $15.49 UTEK Score: +9.60

I simply used the screener to identify 1-star companies with the highest 52-week gain. The 1-star rating should mean they are bad companies and the 52-week gain should mean they are overpriced. We’ll see how it works!

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Member Avatar jseegan (< 20) Submitted: 6/23/2008 1:49:37 PM : Underperform Start Price: $16.75 UTEK Score: +17.18

bad management

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Member Avatar FifteenK (52.05) Submitted: 5/18/2008 1:05:40 PM : Outperform Start Price: $16.92 UTEK Score: -7.47

If it keeps making its comback at this rate I will be in the money. They got off to a slow start but looks to me like they have that behind them and its straight up from here.

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Member Avatar GeoWendy (47.19) Submitted: 4/23/2008 11:43:13 AM : Outperform Start Price: $14.21 UTEK Score: +13.88

This stock is going gangbusters. No specific news, but given the general economy, it is startling how much it has risen since the beginning of April. Looking into what the latest inside trades that have happened over the past quarter.

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Member Avatar sunnybrasil (31.73) Submitted: 4/21/2008 11:13:46 PM : Underperform Start Price: $13.03 UTEK Score: -28.24

Look at the PE and share price down

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Member Avatar goldminingXpert (29.47) Submitted: 3/12/2008 11:46:42 PM : Underperform Start Price: $9.02 UTEK Score: -96.38

Connected to Xethanol... a dead penny stock. Cuban shorted both of them... this one is dead too soon enough.

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Member Avatar gunark (83.45) Submitted: 3/11/2008 3:47:14 PM : Underperform Start Price: $9.10 UTEK Score: -96.53

bad smell

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Member Avatar mishu4 (52.05) Submitted: 9/1/2007 10:39:02 PM : Outperform Start Price: $14.30 UTEK Score: +19.91

great fundamentals, expected 2000% growth next year..

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