Investing For Value

Tips  E-46: A 1-minute summary of my fundamental analysis of SiTime Corporation (NASDAQ)  Investment Thesis Since its 2019 IPO, SiTime has expanded from oscillators into a broader timing platform and appears to be taking market share through sticky design wins and switching costs. However, profits have proven elusive, and the current share price assumes execution far beyond what the company has historically demonstrated. Main Business SiTime is a fabless provider of MEMS-based timing products that compete with traditional quartz solutions. Its competitive advantages stem from patents, customer embeddedness, long product life cycles and a programmable fabless manufacturing model. Growth While the timing-device market is expected to grow at only mid-single-digit rates, SiTime achieved a 19% revenue CAGR from 2019 to 2024 despite a sharp cyclical decline in 2023. Growth has been largely organic, driven by design wins, richer product mix and portfolio expansion. Profitability...

This is Chapter 16 of my book Mastering Value Investing: Practical Strategies for Real-World Results . Go there for links to the other chapters. Most investors assume that valuing a company requires forecasting years of changing growth rates, margins and cash flows. In reality, many mature businesses can be valued using a much simpler approach. This chapter introduces a practical framework for identifying businesses that are stable enough to be valued using a single-stage model rather than a complex multi-stage forecast.  Instead of relying on endless projections, the approach begins by asking four fundamental questions: Are growth, profitability, reinvestment and risk likely to remain reasonably stable? If the answer is yes, a far simpler valuation model may produce results that are just as reliable. Using a real company as a case study, the chapter explains how to determine whether a business has reached this "steady-state" stage, and why normalized performance ofte...

Tips E-45: A 1-minute summary of my fundamental analysis of Amkor Technology (NASDAQ: AMKR)       Investment Thesis Amkor is well positioned for semiconductor growth, but value creation remains constrained by persistent margin pressures. The company benefits from exposure to AI, 5G, and automotive electronics and has delivered strong revenue and earnings growth. However, through-cycle returns have generally remained below its cost of capital, suggesting limited shareholder value creation despite sound operations. Main Business Amkor is a pure-play OSAT provider focused on packaging and testing semiconductor devices worldwide. Growth Revenue grew at a 9.1% CAGR from 2015 to 2024 despite industry cyclicality. Growth was supported by successful transitions from mobile devices to automotive, computing, AI, and 5G applications, demonstrating the company's ability to evolve with customer requirements. Profitability Profit growth was driven more by scale and fixed-c...

Value Investing Case Study 130-1: A fundamental analysis of Hartalega Holdings Berhad to assess whether it is an investment opportunity.      For years, Hartalega was one of Malaysia's best-run companies, known for innovation, automation and strong returns. Then the pandemic sent glove demand and profits to unprecedented levels. Like many industry players, Hartalega expanded aggressively to meet what appeared to be a structural increase in demand. The problem? The boom proved temporary. As demand normalized, the industry was left with too much capacity. Hartalega's production facilities became underutilized, causing margins and returns to fall sharply. Yet my analysis suggests that the issue is not a loss of competitiveness, but rather the after-effects of overexpansion. Despite the recent downturn, several strengths remain. It has a strong balance sheet with RM1.1 billion in cash and excellent long-term cash generation. Among major glove manufacturers, Hartalega...

This is Chapter 15 of my book Mastering Value Investing: Practical Strategies for Real-World Results . Go there for links to the other chapters.   In Chapter 15 of Mastering Value Investing, I explain why I never rely on a single valuation approach. Instead, I cross-check value from different angles to avoid being fooled by optimistic forecasts. Here are some of the key insights: The balance sheet can reveal your downside risk. Book value, net tangible assets, liquidation value and reproduction value provide clues about what a business might be worth even if things go badly. Asset values help establish a valuation floor. Rather than relying solely on accounting numbers, I also show how AI-assisted industry data can estimate the real-world cost of rebuilding a business. This provides an economic reality check on asset values. Peer comparisons are not as straightforward as they appear. Different accounting policies, capital structures and business models can make "compa...