With Outsized Business Uncertainty, The Market Still Basically Hates ams AG Right Now

Given the messy and dilutive deal for Osram (OTCPK:OSAGF), a deal with questionable long-term synergies, and ongoing concerns that it will lose its high-profile front-facing 3D sensing slot with Apple (AAPL), I wasn’t fond of ams AG (OTCPK:AMSSY) back in September. That was in spite of a valuation that I thought was quite low in many respects. About six months later, while the shares have risen since that last article (about 10%), they’ve continued to underperform – lagging the S&P 500 (up about 18%), the SOX index (up more than 40%), and other notable Apple supplies like Cirrus (CRUS) and Qorvo (QRVO) (up around 37% and 46%, respectively). Making matters worse, not only have semiconductor stocks been hot, so too have auto suppliers (with Osram generating significant revenue from the auto-end market).

These shares continue to look undervalued, even factoring in what I believe are relatively conservative assumptions. Still, with the Apple worries hanging over the shares, I don’t see outperformance as particularly likely until later in the year when there should be clarity on the issue.

 

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With Outsized Business Uncertainty, The Market Still Basically Hates ams AG Right Now