Sector rotation has, for now, made some glamorous stocks less appealing and brought others, including companies that supply goods to the chip industry, in favor with market-makers. Among the latter is Kulicke & Soffa Industries (KLIC) whose IBD SmartSelect Composite Rating rose to a superb 97 Monday, up from 94 the day before.
The revised score means the stock currently tops 97% of all other stocks in terms of key performance metrics and technical strength. Top growth stocks often have a 90 or higher Composite Rating before beginning big runs.
Kulicke & Soffa Provides Gear For Hot Industries
The provider of equipment as well as aftermarket products and services specifically provides wire bonding and wafer slicing equipment to semiconductor equipment makers. It also supplies LED and electronic equipment companies.
Among other key ratings Singapore-based Kulicke & Soffa holds a strong 82 EPS Rating on a 1-99 scale with 99 tops. Similarly, it boasts a hearty 97 Composite Rating, putting it in the top echelon of growth stocks.
In terms of fundamentals, in Q2, the company posted a 385% earnings-per-share increase, to $1.26. It has now posted accelerating EPS increases for two consecutive quarters. Sales grew 126% year over year, to $340.2 million. That growth rate was up from an 86% hike in the prior quarter. That marks three consecutive reports with rising growth.
CEO Fusen Chen said in the Q2 earnings release that demand for its products is strong “and is supported by structural dynamics, including the increasing global reliance on semiconductors.” He also cited “the increasing capital intensity within the semiconductor assembly process.”
Kulicke & Soffa Industries holds the No. 2 rank among its peers in the Electronics-Semiconductor Equipment industry group. ASML (ASML) is the No. 1-ranked stock within the group.
Its Accumulation/Distribution Rating of C shows a roughly equal amount of buying and selling by institutional investors over the last 13 weeks.
Kulicke & Soffa Industries is not currently near a proper buy zone. Look for the stock to form and break out of a new chart pattern like a threeweeks tight or a rebound off its 50-day or 10-week line.
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