Personal Finance

How Ultra Clean Holdings, Inc. Stock Rose 138% in 2017

A robot hand stacking coins on a laptop's keyboard.

What happened

Shares of Ultra Clean Holdings (NASDAQ: UCTT) gained 138% in 2017, according to data from S&P Global Market Intelligence . The maker of manufacturing and testing tools, used in the clean rooms of semiconductor makers, beat Wall Street's earnings targets in three out of four quarterly reports last year. In the final report, Ultra Clean fell a bit short.

A robot hand stacking coins on a laptop's keyboard.

Image source: Getty Images.

So what

Coming into 2017, Ultra Clean's sales and profits had been dwindling for a few years. An expanded product line meshed perfectly with a sudden spark of high demand for chipbuilding equipment, and the company had a banner year as a result:

UCTT Revenue (TTM) data by YCharts

Now what

It wasn't a year of absolute perfection, and Ultra Clean's lone earnings miss came in October's third-quarter report. Share prices plunged 24% the next day , taking the edge off of the stock's rampant growth in a hurry. The market momentum did not rebuild on its own, and the stock is staying more than 20% below early October's all-time highs.

The next earnings report is due in the second half of February, and it could either light a new fire under the stock or take it down again. To get some clues on what to expect, keep an eye on Ultra Clean's clients -- the major chip companies of the world -- as they present their results in the meantime. Strong reports and large capital expense budgets in that sector would be good tidings for Ultra Clean.

10 stocks we like better than Ultra Clean Holdings

When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Ultra Clean Holdings wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of January 2, 2018

Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

UCTT TTM

Other Topics

Stocks

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More