It's Not Too Late To Buy STMicroelectronics

If you bought shares of STMicroelectronics (STM) (“STMicro”) at the mid-teens back in March, congratulations – you got a great price for a great company. Even if you missed that opportunity, and the subsequent 60%-plus rally off the bottom, though, I don’t think it’s too late to buy. With very strong leverage to growth trends like auto electrification, industrial automation, IoT, and advanced imaging and sensing, not to mention technologies like silicon carbide (or SiC) and gallium nitride (or GaN), I believe STMicro will be an above-average grower over the next five and 10 years.

There’s still significant uncertainty in the near-term, though, including questions as to whether the crucial auto sector will bottom in Q2’20 and what the shape of the eventual recovery will look like. I believe STMicro is more leveraged to markets more likely to show V-shaped recoveries, but only time will tell. With the shares a little undervalued on long-term DCF and more undervalued on a margin-driven basis, I think this is still a stock worth buying.

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It's Not Too Late To Buy STMicroelectronics