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Stock Worth Buying: Cohu - Analyst Blog

By: Zacks.com
Posted: 6/2/2014 5:10:00 PM
Referenced Stocks: COHU;IVAC;UTEK;KLIC

Zacks Investment Research upgraded Cohu, Inc. ( COHU ) to a Zacks Rank #1 (Strong Buy) on May 30, 2014. Going by the Zacks model, companies having a Zacks Rank #1 have strong chances of performing better than the broader market.

Why the Upgrade?

Cohu, Inc. reported impressive results for first-quarter 2014 on Apr 30. Since then the company's share price has gone up by 4.5%. Earnings were 2 cents per share, improving over a loss of 32 cents per share reported in the year-ago quarter. Also, the bottom line was way above the Zacks Consensus Estimate of a loss of 19 cents per share.

Revenues grew by 22.1% year over year, supported by a sales increase of 88% in semiconductor equipment, 7% in microwave communications and 5% in video equipments. Orders grew 7.4% sequentially while backlog was solid at $101.6 million. Cost of sales rose by 10.3% while operating expenses were down by 4.5% year over year.

For 2014, Cohu, Inc. anticipates revenues to lie in the $72−$80 million range, up 11.1% over the prior year at the mid point.

Over the last 60 days, the Zacks Consensus Estimate for Colhu, Inc. has improved from a loss of 13 cents per share to a loss of 5 cents per share for 2014. Also, this estimate represents a year-over-year improvement of 94.7%.

Other Stocks to Consider

Cohu, Inc. currently has a $272 million market capitalization. Some other stocks worth considering in the same industry include Kulicke and Soffa Industries, Inc. ( KLIC ), Intevac Inc. ( IVAC ) and Ultratech, Inc. ( UTEK ). While Kulicke and Soffa Industries sports a Zacks Rank #1, both Intevac and Ultratech carry a Zacks Rank #2 (Buy).


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