AEIS Powered Down For Now, But Still Undervalued On An Eventual Semiconductor Recovery

Down a little bit from my last write-up (during which time the stock swooned another 25% only to regain most of that), Advanced Energy Industries (AEIS) is a tempting target in a sector undergoing serious pressure and downward revisions as semiconductor companies, particularly in the memory space, slash their capex budgets and semiconductor equipment companies cut their orders for critical components like power supplies, matchboxes, and plasma generators.

This year (2019) is likely to be ugly, and I’m not ruling out the possibility of another round (or two) of guidance revision, but at some point the sector will bottom out, and I think AEIS’s leadership in power subsystems is worth more than the share price currently reflects and I think management has the capability to do something a little more dramatic on the capital allocation side.

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AEIS Powered Down For Now, But Still Undervalued On An Eventual Semiconductor Recovery