Veeco Instruments, Inc. (NASDAQ:VECO)

MagInv*

Undervalued due to an overreaction to a temporary slowdown.

great one

This stock needs a deeper haircut which it will definitely receive soon. While doing my research, I finally pieced together what investors in this stock don't realize: the bottom is about to fall out. There are numerous reports of companies in China taking equipment sales such as Komatsu and not being paid. Combined that with the huge burdens of the local government vehicles, elimination of subsidies, and quite frankly extremely hot sales and you have a recipe for a disaster for the upcoming year. Investors are still slowly riding this company because it has a decent balance sheet and is well managed. But you can only do so much as a capital intensive company. Another thing, while they do have a lot of cash you have to wonder: how is that cash going to hold up when sales dry up? Veco's customer delays about construction projects pushing out sales further in the quarter are going to blow up.

The final nail in the coffin is AIXG. They just preannounced that sales in China were down significantly and in fact, are going to miss almost a whole quarters revenue. There is no way Veco who is more leveraged to China than Veco is going to escape. If anything, their silence on this matter is making this a particularly interesting short.

Cheap by the metrics. LEDs are the way of the future.

High growth opportunities in LED market, low PE, low PEG, small cap poised for multiple expansion. Strong takeover candidate, operating margins would improve if assimilated by a larger semi-equipment manuf. AMAT, are you listening?

Great profitability, revenue & earnings growth. Solid balance sheet.

Magic Formula

Outstanding Margins...A very low P/E and great growth prospects in an industry that is so essential and has great future

Seems to have been hit hard by talk of Chinese subsidies coming to an end despite plenty of order backlog, extending well beyond the July expiration.

Solar LED play. Its my bag baby.

MFI stock, US comparative advantage semiconductors

Tracking this one from the MFI top 50 screen. LED lighting is a growth area and Veeco supports this industry. EV/EBITDA ratio is 6.53, trailing P/E below 10 due to downgrades and high short interest (keep an eye on this, 32%).

Metrics from MagicDiligence.com calculator:

Results for ticker 'VECO' (Veeco Instruments Inc):
Earnings Yield:   13.9%
MFI Return on Capital:   129.9%

MagicDiligence Research for 'VECO':

Research Available for VECO! (full membership required - upgrade here)

Instant Diligence:

The Earnings Yield of 13.9% is High.

The MFI Return on Capital of 129.9% is Very High.

Near-term Financial Health appears to be Excellent. The current ratio is 2.77.

Calculations:

(for quarter ended 2010-09-28)
Market Cap   =   Stock_Price * Shares
   =   42.62 * 42.30
   =   1802.83

Excess Cash   =   Cash - MAX(0; (Current Liabilities - Current Assets + Cash))
   =   435.20 - MAX(0; (299.00 - 827.20 + 435.20))
   =   435.20

Enterprise Value   =   Market Cap + Total Debt - Excess Cash
   =   1802.83 + 103.30 - 435.20
   =   1470.93

MFI Invested Capital   =   Total Assets - Goodwill - Intangibles - Current Liabilities + Short Term Debt - Excess Cash
   =   943.70 - 52.00 - 0.00 - 299.00 + 0.20 - 435.20
   =   157.70

Earnings Yield   =   Operating Earnings / Enterprise Value
   =   204.80 / 1470.93
   =   0.139 (13.9%)

MFI Return on Capital   =   Operating Earnings / MFI Invested Capital
   =   204.80 / 157.70
   =   1.299 (129.9%)

Bought at 33.10 on Sept. 8 then watched it run to $50 recently. On the way back down I added more at $44 and then more again at $42 and might add more today or tomorrow. I like this company for many reasons and think the recent downgrade and drop in price, amplified by large amounts of short selling, is just a short term setback. This stock sees many 4-7% days either way but I think the company itself is solid. It also keeps popping up on everyone's radar as a takeover candidate...

soilid co.; Citi made a big mistake with the downgrade....

Growth and value at a discount. I like.

led growth

caxton and coatue

Great LED and Solar play, very strong in China and elsewhere in Asia