The final update on EVBox stock + A chip stock to follow
A quick fix of the latest financial happenings.
Good morning, investors!
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Without further ado…
One Last Word on the TPG-EVBox Acquisition
We’ve covered the TPG-EVBox acquisition dating back to last year — from the time it was a promising play in the EV space to the bizarre delay in audited financials and subsequent revision of its projections.
It’s finally time to put it to rest.
On Tuesday, the SPAC liquidated after failing to complete an acquisition within two years of forming. Investors were paid out at $10.05 a share, a sad result after once peaking at $30.
What’s next for EVBox stock? Could another bidder come along? Only time will tell.
A Semiconductor Stock Worth Watching: Entegris
It’s safe to say that the stock market has looked better. However, downturns are like department store promotions, allowing us to sift through bargain bins for heavily discounted stocks that are actually worth more than their price tags suggest. (At least, in theory.) There’s no shortage of companies to pick from, but let’s start with semiconductor play that trades well below its five-year PE averages and has significant buy support from analysts.
The semiconductor industry has received its fair share of licks over the last year. To give you an idea, the PHLX Semiconductor Index is down about 31% whereas the S&P 500 is “only” down 17%. Entegris is no exception — last November, it peaked at $154.75 a share, now it’s down nearly 50% to $78.47.
As you can imagine, semiconductor materials are sensitive. Fabrication plants (or “fabs”) squeeze billions of transistors into chips the size of your thumbnail in an intricate, delicate, high-touchpoint process. Entegris, a global supplier of advanced materials, helps optimize chip manufacturing through state-of-the-art semiconductor products so that fabs can maximize their outputs.
That’s anything from wafer containers for safe transport to gas purification and filtration to prevent microcontaminants from causing defective chips.
Although its share price has taken a beating, the company’s performance has endured through the first half of the year.
Looking ahead, the company has reduced expectations for organic growth, but Entegris’s recent M&A activity should spur top- and bottom-line improvements. Most notably, the company acquired CMC Materials in July for $5.7 billion, which is expected to contribute to an inorganic revenue CAGR of 13% through FY25.
Eight out of eleven analysts view ENTG as a buy (one oversold, two holds), with a consensus price estimate of $127. Based on projections from their September investor day, Entegris expects to achieve EPS of $6 by 2025. If we estimate future investor desire for ESG shares by using the stock’s current PE ratio of 23 as a proxy (well below its 5-year average of 36.5), that would translate to $138, or an implied return of 75% over a three-year stretch.
You can peruse Entegris’s latest investor day presentation here.
Three Eye-Opening Tweets
And finally, we close with three eye-opening tweets.
Inventory problems incoming.
The metaverse: infinite possibilities…for 38 people.
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