AEM Holdings has embarked on an aggressive share buyback programme -- it has not only made purchases every month of this year but multiple times every month.
To be exact, AEM has bought back shares in 64 days so far this year.
The total number of shares purchased is 1,432,600.
| Stock price | 59.5 c |
| 52-week range | 25-59.5 c |
| Market cap | $25.5 m |
| Price Earnings (ttm) | 3.1 x |
| Year-to-date return | 129% |
| Dividend yield | 2.52% |
| Source: Company | |
The efforts would have caught the attention of investors, and contributed to the 129% rise in the stock price since the start of the year -- ie from 26 cents to 59.5 cents.
After such a steep rise, you would think the PE ratio would have reached a decent level but this is not the case.
AEM currently trades at 3.1X trailing PE.
Given the low PE, you would perhaps attribute that to a lacklustre financial performance. After all, some stocks are "cheap" for their own reasons.
Again, that would be a wrong inference.
Business had turned up: 9M2016 revenue and net profit shot up 53.0% and 213.2% to $50.6 m and $3.8 m, respectively.
And cashflow, which was negative in 1H16, turned positive in 3Q.
In its financial statement, AEM attributed its performance to growing demand for its "flagship high-density semiconductor test handlers".
What are these devices?
 "We are proud to be generating solid returns on the significant R&D investments we have made over the past 5 years as we bring our high-density test handlers to market. Our engineering team has done a wonderful job in commercializing one of the most advanced test handlers on the market today." -- Loke Wai San, Non-Executive Chairman of AEM. |
AEM said they represent state-of-the-art semiconductor backend test capabilities, providing "industry-leading capacity and efficiency" which should bring about significant quality and cost savings for chip manufacturers.
AEM added that they are being adopted by one of the world’s leading chip manufacturers.
The best days are yet to come, it seems.
Mr Loke Wai San, Chairman of AEM said: "We expect the demand for our test-handlers to grow substantially next year, and our leading products and capabilities should hopefully position AEM well in the years to come.”
| Negatives: Among them, stock is illiquid (average daily trading volume was only 31,000 shares in the past three months), and the market cap is micro at $26 million. |
