Photon Control (PHO.TO) Buy, Sell or Hold

Photon Control (PHO.TO)

3.60

+0.01 (0.28%)

as of Jul 16, 2021, 7:59:59 pm Market Open.

114 watching

WEAK BUY

He's shorting this. They missed a few quarters. Long-term this is interesting. As 5G builds up, they will benefit, because they supply the semi-conductor companies.

BUY

Ranks well in his metrics. Because of a slowdown in semi stocks, but expect a rebound to new highs. PHO's underlying buiness is cloudy; analysts have shaved earnings estimates by 20% in the last 90 days and earnings will decline by 32% this year. They still have a lot of free cash flow, though. They want to acquire something to diversify. Their business model is much better. PHO will benefit when semis recover in the market.

HOLD

There had been concerns in the semi-conductor space and the produce very sensitive temperature monitoring devices for semiconductors. They deal with the five big producers around the world. New management has led to increased orders and now cash is growing. The stock is reasonably priced, he thinks. A great company and well managed -- likely a future take over target. (Analysts’ price target is $2.25)

DON'T BUY

He decided to pass on it because it is very cyclical. It suffered from revolving door CEOs. The stock is out of favour from and industry and management perspective.

PAST TOP PICK

(A Top Pick Dec 21/17, Down 36%) It did extremely well until the last few months last year. He started buying around $1.10 and took money off at $2.10. He still owns a small position. About 27% of their market cap is in cash. The CEO recently resigned. He still continues to hold it. The balance sheet looks great and they have huge intellectual property value -- potentially making it a great acquisition target.

BUY ON WEAKNESS

They're in the semi space, which has been smacked lately. This will be fine. Their ROE has dipped too low for him, though. If you own it, hang onto it. If you have a time horizon past five years, add to your position.

WAIT

A name they cover and like. It has been growing nicely but now that the semi-conductor space has slowed down they are feeling the impact. You could wait to the next quarter as they said that next quarter sales are lower.

PAST TOP PICK

(A Top Pick Oct 19/17, Down 37%) They are debt free and have a ton of cash. They will be here for the next uptick in the economic cycle. They were still profitable last quarter. Don't throw in the towel.

DON'T BUY

Interesting little name. It is correlated with the semiconductor space. Cheap name. Extremely whippy sector. He would be cautious until demand outstrips supply in the short term. They lowered guidance last quarter.

WEAK BUY

This is going to be a volatile business. It is highly correlated to the semiconductor business. They had to reorganize last year, but successfully. Be prepared for quarterly volatility. It is not cheap. The stock moved up and got ahead of itself.

BUY

They've done very well with a new CEO following a legal fight with a subsidiary a few years ago. A good growth play on semiconductors. Has a good balance sheet and growth potential by branching into other semicondutor components. Keep a 3-year time frame on this and expect some volatility.

HOLD

Nice little tech company and nice tendency to surprise investors. OK to hold and not worry about the short-term fluctuations. Where it is now, at 20x forward earnings, is a reasonable price.

BUY

A relatively small company that guided a little bit lower. The long term outlook is good and they just signed a term agreement within China. A good time to buy or add to your position here.

COMMENT

Likes it alot. They've had issues with past management, but the new one is expanding the business. They do pressure controls of the inside of semi-conductors. They're giving guidance of doubling EBITDA over three years. If they exeuctue, there's a lot of room to rise.

COMMENT

Provides extremely precise temperature measurement systems for semiconductor construction/manufacturing. All 5 of the large semiconductor makers are clients. New management streamlined the company. They have increasing orders, lots of cash and high expected future earnings. However, semiconductors are a cyclical business and cellphone sales have been slowing significantly. They are being brought into more aspects of the manufacturing process and their benefit is making the manufacturer more efficient, so their opportunity is still significant going forward. They will probably make an acquisition with their cash but he doesn’t know what they might buy or how it will help them. (Analysts’ price target is $2.95)

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