Investidea: COMPLAIN, because good repeat

Инвестидея: KLA, потому что хорошее повтори

Today we have a speculative idea: take shares in KLA's semiconductor business (NASDAQ: KLAC), in order to capitalize on the growth of his orders.

Growth potential and validity: 15% behind 14 months excluding dividends; 10% per annum during 15 years including dividends.

Why stocks can go up: this business has not yet exhausted its potential for growth.

How do we act: we take shares now by 435,11 $.

When creating the material, sources were used, inaccessible to users from the Russian Federation. We hope, Do you know, what to do.

No guarantees

Our reflections are based on the analysis of the company's business and the personal experience of our investors, but remember: not a fact, that the investment idea will work like this, as we expect. Everything, what we write, are forecasts and hypotheses, not a call to action. To rely on our reflections or not – it's up to you.

And what is there with the author's forecasts

Research, like this and this, talk about, that the accuracy of target price predictions is low. And that's ok: there are always too many surprises on the stock exchange and accurate forecasts are rarely realized. If the situation were reversed, then funds based on computer algorithms would show results better than people, but alas, they work worse.

So we're not trying to build complex models.. The profitability forecast in the article is the author's expectations. We specify this forecast for the landmark. As with the investment idea in general, readers decide for themselves, it is worth trusting the author and focusing on the forecast or not.

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What the company makes money on

The company supplies equipment for the production of semiconductors, also provides services in this area.. We published an investment idea for this company, in which we discussed her business in detail, so we won't repeat ourselves here..

Main: KLA itself does not produce anything, Her job is to design, сборка и тестирование оборудования, а производством компонентов занимаются сторонние компании.

Arguments in favor of the company

This deficit will never end.. The lack of chips is gradually becoming the norm, And, given the growing dependence of the world economy on this resource, I wouldn't have expected that, that in the next few years KLA is threatened by a lack of demand for its products and services.

  Investor risk appetite

Furthermore, the global economy will be increasingly digitized, и спрос на товары и услуги компании будет только расти по мере того, how chip makers will increase investment in the renewal of fixed assets.

Hit! The company pays 4,2 $ dividend per share per year, on which it takes about a quarter of the total profit for the past 12 Months. I think, what, given the strong growth in the margins of the company's operations this year and the positive prospects for its business, она вполне могла бы увеличить выплаты в 2—3 раза.

Or periodically become generous with one-time large payments in the form of special dividends in addition to those, what is already paying. So, anyway, some activist investor will think, who can attack the company in order to force it to take these actions.

Can buy. The company is well worth, но в целом приемлемых денег: P / It's about 24,5, а капитализация около 66 млрд долларов. Very likely situation, when the company is bought, say, larger Applied Materials, у которой для этого есть основания. Or even a private foundation.

Инвестидея: KLA, потому что хорошее повтори

What can get in the way

Revenge of geography. According to the annual report, 26% выручки компания делает в КНР. Yet 25% made in Taiwan - and considering, that this island is highly integrated into the Chinese economy, in fact, Taiwanese exports of KLA depend on orders to Taiwanese enterprises from mainland China. If Americans step up pressure on China's tech companies, this may have a sad effect on KLA reporting.

“As in the middle of the evening lights…” The company's business processes are highly dependent on the situation of its suppliers, producing the necessary components, - so rising costs of raw materials and logistics could be very bad for the KLA result for at least the next two quarters.

А если вдруг. Также у компании есть два крупных клиента: TSMC и Samsung. Each of them gives more 10% KLA revenue, but unknown, how much exactly. In case the relationship between KLA and one of them deteriorates, это может негативно отразиться на ее бизнесе.

«Давайте не будем о деньгах». The company has a significant amount of debt: 7,287 billion dollars, из которых 2,523 млрд нужно погасить в течение года. She has a lot of money at her disposal: 1,509 billion in accounts and 1.463 billion debts of counterparties. But still, the total amount of debt is very large and may scare away some investors., also it can interfere with the increase in dividends.

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Very likely, that the company will expand its business, что может как увеличить ее долговое бремя, and adversely affect its ability to pay dividends.

Не время для драконов. The company's shares are currently trading near all-time highs., so they can suffer during the next unpredictable stock correction.

What's the bottom line?

Shares can be taken now by 435,11 $. And then there are two options:

  1. wait, when they grow up to 500 $. Think, we will reach this level in the next 14 Months;
  2. keep shares next 15 years, to grow with the company's business and, let's hope, dividends.

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