Editor’s note: This column is part of InvestorPlace.com’s Best Stocks for 2021 contest. Louis Navellier’s pick for the contest is Kulicke and Soffa Industries (NASDAQ:KLIC) stock.
The technology-component shortage is, unfortunately, a global phenomenon. Certainly, Singapore-based Kulicke and Soffa Industries (NASDAQ:KLIC) isn’t immune to supply-chain issues. However, the company’s outstanding financial results lend themselves to a confident, growth-and-value-focused position in KLIC stock.
Founded way back in 1951, Kulicke and Soffa provides semiconductor and electronic assembly solutions. Despite the company’s pedigree and longevity, few people have even heard of Kulicke and Soffa.
That’s really a shame, as the company has outstanding growth potential in 2022. Kulicke and Soffa isn’t a chip fabricator, but instead supplies equipment and tools other companies need for semiconductor manufacture and assembly. Thus, the company is an essential part of the chip-making supply chain.
As we’ll see, there are plenty of reasons to remain bullish on Kulicke and Soffa for the remainder of the year. Indeed, this company is working through the macro-level challenges and demonstrating that a 70-year-old business can still be a tech-market envelope pusher today.
|KLIC||Kulicke and Soffa Industries||$41.32|
What’s Happening With KLIC Stock?
Unfortunately, there was no Cinderella story for KLIC stock holders during the past year. As it turned out, the stock declined from a peak of $75.29 to a low of $37.35.
There’s definitely a silver lining here — or even several silver linings. Chances are pretty good that you’re hearing about Kulicke and Soffa for the first time and that you haven’t invested in the company yet. This means you can start a position today at a terrific discount. After all, it should be hard for value seekers to resist Kulicke and Soffa’s trailing 12-month price-to-earnings (P/E) ratio of 5.3.
Meanwhile, for income-focused investors, you should be glad to discover that Kulicke and Soffa pays a forward annual dividend yield of 1.6%.
Also, the company entered into a $150 million share repurchase program not long ago. Buybacks are often a good sign, as it can indicate that a company’s executives are confident in the future of the business. Thus, if Kulicke and Soffa is investing in itself, perhaps you might consider a long position as well.
We’ve discovered the value proposition and the yield offered by Kulicke and Soffa. However, we also have to consider whether the company is growing. After all, supply-chain bottlenecks and high inflation are valid concerns for today’s technology firms.
Not to worry, though, as Kulicke and Soffa are beating the odds while also beating the Street. Kulicke and Soffa generated $384.28 million in revenues during 2022’s first quarter, exceeding the analysts’ consensus estimate by 1.13%. This result also demonstrates improvement over the $340.16 million that the company posted in the year-earlier quarter.
Turning to the bottom line, Kulicke and Soffa also knocked it out of the park with Q1 2022 earnings of $1.95 per share. This result beat not only Wall Street’s estimate of $1.47 per share, but also the year-earlier quarter’s earnings result of $1.26 per share.
Pretty much everywhere you look, you’ll find that Kulicke and Soffa made significant fiscal strides in this year’s first quarter. Year over year, the company’s gross profit was up 35.8%, gross margin increased up 880 basis points and net margin expanded 920 basis points.
What You Can Do Now
As I acknowledged not long ago, 2022 has put the volatility of KLIC stock on full display. However, a rough trek during the year’s first half could set up a smooth ride to the finish line.
So, Kulicke and Soffa is still prominently on my list of best stocks for 2022. Whether you’re in it for growth, value or dividends — or better yet, all of the above — Kulicke and Soffa has everything that sensible tech-market investors can want, and then some.
On the date of publication, Louis Navellier had a long position in KLIC. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.