Thursday, December 19, 2019

ams AG Seemingly Going In All Directions At Once

When I first started digging into ams AG (OTCPK:AMSSY) (AMS.S) years ago, I never expected this would be such a volatile and bizarre company. The core technology drivers are still very much there - ams is a leading player in 3D sensing and other sensing and optics technology that is seeing increasing adoption in smartphones, and there are still attractive long-term opportunities in other sensing technologies and markets like auto and industrial automation. At the same time, though, business has proven very volatile on unpredictable OEM adoption curves and management's aggressive pursuit of Osram (OTC:OSAGY) seems predicated on some rather bullish assumptions regarding long-term revenue/technology synergy and cost optimization.

I feel pretty conflicted about the stock. Stand alone, I like ams AG. I'm not bullish on the Osram deal, but even with what I think are post-deal assumptions that don't give much benefit of the doubt to ams management, the shares look pretty meaningfully undervalued. I'm not really a believer in "hold your nose and buy" stories (if you don't believe in management, keep looking until you find a company/stock where you do…), but I still like the core sensing story and it looks like the market is already sufficiently skeptical about the Osram deal.

Read the full article here:
ams AG Seemingly Going In All Directions At Once

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