AEM

nOTICED that this AEM has gone up sharply today by 9%. The coy announced it has been removed from watchlist of SGX .... this is the trigger.

Is this a fundamentally good counter? A reader has highlighted this stock in :
NextInsight readers score 38% gain on average in 1Q, beating STI
 

Did a brief anaylsis on companies serving the semiconducter sector, UMS, micromec, ellipse, rokko and AEM.
I still prefer rokko, although kelly scully from NRA did mention he might AEM to his stock pick soon.
Why i like rokko despite its small captalisation and high gearing over others, (AEM, UMS is net cash)
1) semiconducter should be turning corner, peers like UMS, micromech already has net profits closing to their last peak(so has their share price), US semiconducter industry data point to increasing trend of  book to bill ratio.
2) Rokko is a super laggard despite its stable net profits, yes, 2011 NP is due to the 1-off gain due to aquisition of Jade, and 2H is actually loss-making, but i believe that has been factored into the price.
3) What is not factored into the price is i belive 2012 will be a better year in NP. Why? Assume management forceast of tought outlook in Q1 is true, there will still have a 1.6 million buffer from the gain from disposal of factory space in Singapore and shiftiing facilities to Malaysia
4)Leadframe subsidary has already turnaround, although profit margin is a low single digit, no mean feat since the aquisition is only complete last year. Managment mentioned it does not expect strong turnaround anytime soon, as they need to spend money to upgrade their equipments. Leadframe has suppliers and customers that are affected by the thai flooding, which i think should be a past issue, hence chances are profitability should improve moderately.
5) Assume the industry turnaround in Q2 (a big if), rokko should reap rewards from their recent aquuisition.
6) with a 2 year horizon, i believe rokko has good risk-reward profile. I also like management steady approach to business, ROE has been positive even during the 2009 crisis.
What is bad about the company then?
1) high gearing due to its expansion plans
2) High capex this year due to expansion plans.
3) Super low iquidity in normal days... 
however, i will still continue to qeue at 9.1-9.2 cents which i think is a steal (only got it once, and the quantity miserable), as i notice when the tide rise, almost all semiconducter counters prices rise to the respective peak around the same time irregardless of fundementals. 
just my 2 cents worth...
Also with some imagination and wishful thinking, I am thinking, Rokko capitalisation is only about 17 million (but revenue 58 million, NP 3 million), UMS is flush with cash, is a supplier for intel while Rokko serve Texas instrument, wouldn't it make sense for UMS to privatise it. haha=)
 

A good piece of news from semi. Manage to accumulate on rokko. If prices remain weak I get more SAN JOSE, Calif. — April 19, 2012 — North America-based manufacturers of semiconductor equipment posted $1.48 billion in orders in March 2012 (three-month average basis) and a book-to-bill ratio of 1.13, according to the March Book-to-Bill Report published today by SEMI.  A book-to-bill of 1.13 means that $113 worth of orders were received for every $100 of product billed for the month. The three-month average of worldwide bookings in March 2012 was $1.48 billion. The bookings figure is 10.7 percent higher than the final February 2012 level of $1.34 billion, and is 6.4 percent below the $1.58 billion in orders posted in March 2011. The three-month average of worldwide billings in March 2012 was $1.31 billion. The billings figure is 0.9 percent less than the final February 2012 level of $1.32 billion, and is 20.9 percent less than the March 2011 billings level of $1.66 billion. “Equipment orders continue to increase and have improved to the highest reported value since July 2011,” said Denny McGuirk, president and CEO of SEMI.  "The semiconductor equipment market outlook has strengthened since the beginning of the year as reflected in the increasing bookings rate." The SEMI book-to-bill is a ratio of three-month moving averages of worldwide bookings and billings for North American-based semiconductor equipment manufacturers. Billings and bookings figures are in millions of U.S. dollars.

Stat chip expect better Q2, Texas instrument, a major customer of rokko expect growth in 2012. "As we expected, our business cycle bottomed in the first quarter, and early signs of growth began to emerge," said Rich Templeton, TI's chairman, president and CEO.  "Orders were up 13 percent, and backlog is growing again.  Particularly encouraging is the breadth of increased orders across geographical regions and markets, including the industrial sector. Maybe I don't have to wait 2 years...

AEM giving dividend after 1Q result -- this is unusually positive. Dont you think so, greenrookie?

Seems to be a stock that many cannot really appreciate. The stock price behaviour is pretty positive and at 8.6 cents is a big discount to fair value.