Thursday, July 25, 2019

The ams AG Roller Coaster Shoots Back Up

Will the real ams AG (OTCPK:AMSSY) (AMS.S)please stand up? In just the past year ams has given shareholders a wild ride, with the shares losing 75% of their value from August of 2018 through the end of 2018 on a very disappointing adoption curve for new Apple (AAPL) phones and worries about overall adoption trends for 3D sensing technology and competition. Since cratering in late 2018, the shares have nearly tripled on signs of VCSEL share gains, wins on multiple Android platforms, a new under-OLED sensor, and a renewed focus on margins and efficiency.

For better or worse, I think the answer is “both”. I think both are the “real” ams, and this turbulence is par for the course when technologies come to market, and particularly when those technologies enter a market where consumer behaviors are changing (slower/longer phone replacement cycles). I do like the momentum in under-OLED sensors, though, and I think ams is on a much better track now. I’m less positive on this flirtation with OSRAM (OTC:OSAGY), as I worry ams may overpay and ultimately distract itself from its core opportunities.

Based upon where ams appears to be now, relying heavily upon management’s guidance for the second half of 2019, I believe the shares are still meaningfully undervalued. It is well worth remembering, though, just how quickly expectations can change and the magnitude of price moves that can drive.

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The Ams AG Roller Coaster Shoots Back Up

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