AMKR - Sector: Technology --- Industry: Semiconductor - Integrated Circuits

[David Randolph]

David AMKR is a better pick then IMOS for the semiconductors in your opinion?

I believe AMKR has less risk and less upside potential than IMOS. Overall I believe AMKR is a superior pick for the Main Portfolio in the semiconductor space, because it is almost as cheap and has the comfort of being a US company reporting all the necessary SEC files for me to make a fair evaluation of the business. But IMOS has more potential, because it is a much smaller company and it is growing faster.

Good luck on both

I work for a semiconductor company that utilizes Amkor for assembly of packaged microchips. Amkor has been quite responsive, precise and diligent. They compete with Ambit and ASE, all in Taiwan, I believe. Amkor builds for large volume customers, like RFMD (if you own Nokia phone or Motorola Sliver, it most likely comes with a front-end RF device from RFMD). I can see Amkor business grow a lot as, for instance, my employer can potentially have a large win at Intel in 2007 that smells millions of packaged parts built at Amkor. I just bought the stock at $12... didn't have the money earlier, unfortunately.

Thanks for the information berloga, and I believe you did well buying AMKR at $12.

The stock closed for the second day above the $12 resistance level on volume above average, further confirming the technical breakout. Fundamentally the company is on track to meet or exceed the 2007 EPS estimate, which stands at $1.01.

AMKR's 2007 earnings multiple is 12 and the Semiconductor - Integrated Circuits industry average is 27.

I'll continue holding AMKR.

[bjc]

AMKR looks like it's ready to explode..

A lot of semis seem to be on the verge of breaking out. 

[David Randolph]

Nothing new on AMKR, I'm just leaving the updated chart.

[David Randolph]

I'll take profits on AMKR due to my general market forecast. Leaving the updated chart.

[rickjust]

hi ,
shorted a small position in amkr at the failure to break  12 yet again on thursday in at 1180
cover at the 50ma  or see if it plunges straight through it  it.
glta. and be careful this coming trading week  .
maxi

[la-onda]

fyi:
Amkor Tech's billionaire boss might be worth still more if he treated public shareholders with more respect.

Grand theory: you should own stocks of companies with big insider positions. The managers can make themselves rich only by making you better off, too. The prime example is Berkshire Hathaway (nyse: BRKA - news - people ), run by Warren Buffett, number two on our world rich list.

Exception to the rule: Amkor Technology (nasdaq: AMKR - news - people ). This should be a winner. It's the world's second-largest (2006 sales: $2.7 billion) semiconductor assembly and test firm, and it has a big insider stake. Chief Executive James Kim, 71, along with his family and related trusts, owned 46% of the common stock as of July 2006. That stake represents half of the Kim family's $2 billion estimated net worth, putting them at number 488 on our list of the world's richest people.

The Kims are extracting a nice stream of cash from Amkor. But the public shareholders are faring badly. The shares have fallen 13% since they were first offered to the public nine years ago, a period when the Nasdaq climbed 29%.

Here's the perverse result: Putting the family's interests ahead of those of public shareholders seems to have made the Kims poorer, not richer. The bad vibes on Wall Street have kept shares of Amkor to 12 times this year's expected earnings, versus an average multiple of 20 for its rivals. The difference now equates to $700 million in Kim family net worth.

Kim started Amkor in 1968 as the American sales and design partner of Anam Industrial (now Anam Semiconductor), a Korean semiconductor manufacturing services outfit founded by his father. In 1998 tech was hot and Amkor had $1.6 billion in sales, with earnings growing at a 26% annual clip. In the public offering in May of that year Kim unloaded 5 million shares for a gain of $55 million.

In 1999 Anam Semiconductor was in financial trouble. Amkor bailed it out by buying a factory in South Korea from Anam for $582 million. A year later Amkor spent $1.4 billion, most of it borrowed, in purchasing three more of Anam's factories, increasing its equity stake in Anam to 42% from 18%. Borrowing left Amkor in a weak position to deal with the downturn that hit the semiconductor business in 2001. Over the next few years Amkor divested its equity stake in Anam at a loss of $172 million and wrote down the value of its factories by $190 million.

In some ways Amkor behaves more like a private financing vehicle for the Kim family than like a public company. In 2005 it spent $19 million on contracts with members of the Kim family and companies owned in part or whole by Kim himself. That year Amkor handed out a $6 million contract to Kim's brother for catering services and a $500,000 engineering deal to another brother.

Kim installed his 37-year-old son, John T. Kim, Amkor's onetime investor relations boss, on the company's board in 2005. JooHo Kim, James' brother, is corporate vice president of the systems group. Until last year JooHo Kim and his family owned 58% of Anam Information Technology, which in 2004 sold $1.2 million of computer components to Amkor.

Last October Amkor announced it took a $106 million hit to earnings to make up for backdated stock options. In December federal prosecutors charged Amkor's former general counsel with making $290,000 in avoided losses and earnings by trading with inside information. (The lawyer has pleaded not guilty and is awaiting trial.)

In 2005 the lucky James Kim was permitted to buy $100 million in convertible notes paying 6.25% from Amkor. He can swap the notes at any time until 2013 for 13.4 million shares, currently worth $160 million. There were few other financing options available, says an Amkor spokesman. (Kim declined to be interviewed for the story.)

"Executives owning this much stock puts too much power in one set of hands," says Paul Hodgson, senior research associate at the Corporate Library, which gives Amkor a grade of D for corporate governance. "It makes it very difficult for the board to act independently." And, it seems, unbridled power can be a mixed blessing for insiders trying to build wealth.

[ScottishTrader]

AMKR looks like it still wants to break out of that ascending triangle formation, despite a nervy day on friday, it managed to rally well into the close.  Clear resistance at 12.15, the target of this pattern, should it break out would put 14.50 in play.

Math: 12.15 - 9.75 (base of the triangle) = 2.40 =+ breakout target 14.55.

[lancefur]

ScottishTrader? This thing really looks like it wants to break out. Range today from 11.88 to 12.20 and closes .2 higher than previous close. You still looking at 12.15 as the resistence? Watching this looks like 2 tectonic plates shifting against one another waiting for it to explode into an earthquake of gaps (GAPQUAKE). 

[la-onda]

fyi:
Amkor Technology initiated with "neutral"

Tuesday, March 13, 2007 7:37:39 AM ET
Credit Suisse

NEW YORK, March 13 (newratings.com) - Analysts at Credit Suisse initiate coverage of Amkor Technology Inc (AMKR.NAS) with a "neutral" rating. The target price is set to $12.75.

In a research note published yesterday, the analysts mention that the company has a unique business model, as compared to that of its peers in the back-end equipment market. The higher level of buyout activity is expected to boost the multiples of sub-contract manufacturers going forward, the analysts say. The unit cycle is likely to be bottoming in 1Q, Credit Suisse adds.

[David Randolph]

Here's a table with the stocks I've sold in 02-28-2007 and didn't buy back, with the respective change since then:



You can see there are winners and losers. It could be perceived as natural that I should now go after the stocks that are below my selling price, since that would confirm the rightness of the selling decision, but no, I want the winners, because those are the stocks the market is rewarding. I'm not worried about being right in the past, what I want is to be right in the future, and the stocks that are up are the one's that give me more confidence of continuing to go up, as trends persist and fundamental prospects are probably better on those stocks.

I also made a video analysis yesterday confirming AMKR is a sound long term investment, with an expected average annual return on investment of 20%:

The trading plan is:

Buy AMKR, 6.66% of capital as always.

[eggman11]

Some of the major shareholders have been doing some shady things with the companies money. The major holder and his family have been treating the company like a personal piggy bank.

http://members.forbes.com/global/2007/0326/097.html?partner=yahoomag

[ravenquork]

Some of the major shareholders have been doing some shady things with the companies money. The major holder and his family have been treating the company like a personal piggy bank.

http://members.forbes.com/global/2007/0326/097.html?partner=yahoomag

Thanks for the information. I view this as a significant limiting factor to AMKR's stock price. For a worst case scenario, go back and look at the history of Adelphia, which was a cable company which the owner family took public and then continued to use as a personal bank. the owners went to jail, the company went bankrupt and was eventually bought out. The situation laid out in the article can place a big drag on the stock price, inspite company growth.   Distrust of self serving owners/managers is currently very strong and is likely to remain so for a long time to come.
I bought AMKR this morning but will rethink the postion after further study.

Trade relaxed, trade happy, trade well

[setravis]

Hold Your Nose And Buy It.......

Bernie Schaeffer, chairman and CEO of Schaeffer's Investment Research and editor of the Option Advisor newsletter, recommends taking a long position in semiconductor packaging and test services company Amkor Technology

AMKR's testing procedures verify semiconductor function, current, timing and voltage. Some of the company's customers include Altera (nasdaq: ALTR), Freescale Semiconductor (nyse: FSL), Intel (nasdaq: INTC), IBM (nyse: IBM) and Texas Instruments (nyse: TXN).

Last month, the Chandler, Ariz.-based company reported a 9.5% rise in fourth-quarter earnings to $59 million on a 6.1% increase in revenue to $683 million. For all of 2006, net income was $170.1 million, or 90 cents per share, compared to a loss of $137.2 million, or 78 cents per share, in 2005. Revenue grew 6% to $2.73 billion.

Amkor has provided a bumpy ride for shareholders, peaking above $65 nearly seven years ago on March 24, 2000, then trading as low as $1.13 on Sept. 24, 2002, during the bear market. It recovered to $21.87 on Jan. 21, 2004, but by May 2005, it had retreated 86% to $3. It rallied again to $13 last spring, but dropped to $5 in early October. In the past five months, however, AMKR is up nearly 150%, closing Tuesday at $11.55.

Even though founder and billionaire James Kim has hardly run the company with an eye toward exemplary corporate governance. Amkor has been destructive of shareholder value since coming public in 1998--Schaeffer believes that there are catalysts to drive the stock higher.

"A combination of positive earnings surprises and strong technical momentum in the shares could attract momentum players," he says, "while its price-to-earnings ratio of less than 13 may attract valuation players, who might see value in the security when comparing AMKR's P/E ratio to the industry average of 30."

He points out that the shares leaped higher on the firm's positive earnings news and continued to rally along the support of their 10-day moving average. Short sellers are also trying to call a top to the security's rally. The number of AMKR shares sold short increased by more than 3% in February, to 12.6 million.

"This accumulation of bearish bets accounts for roughly 10% of the security's float and is almost four times the stock's average daily trading volume," he says. "An unwinding of these pessimistic positions could fuel additional gains in the equity."

"Even Wall Street has its doubts about the firm. Zacks reports that four of the five brokerage firms following AMKR rate it a 'hold' or worse," says Schaeffer. "This bearish configuration leaves ample room for potential upgrades and/or positive initiations from other brokerage firms."

52wk Range: 4.61 - 13.09
Volume: 3,927,798
Avg Vol (3m): 3,059,730

Technicals
Last Price Quote is:
6.68%above 13-day MA
13.01%above 50-day MA
RS Rating: 94 

Fundamentals
Key Data:
Market Cap (M): $992.00 
P/E Ratio: 10.78 
PEG Ratio: 0.4 
Next Earnings: N/A
Last Analyst Rating: B

[David Randolph]

That sure is a great and insightful article, thanks eggman11.

La-onda had posted it before and I read it before recommending buying back AMKR. As the article says, James Kim would be much richer if he had more respect for AMKR's minority shareholders, and from what I've heard over the latest conference call, the old man said he learned from past mistakes and the company is now working to build shareholder's value, above all.

The company just had its best year ever in revenue terms, with $2.728 B in revenues, growing 30% from 2005 levels (my long term estimate calls for just 15% average annual growth). The chart confirms things are getting better. I'll continue holding AMKR.

[David Randolph]

Recently there was an article about AMKR on Forbes magazine, which you can find here:

Hold Your Nose And Buy It

Another very positive fundamental development happened in March 15, 2007:

• Amkor Retires Convertible Subordinated Notes Due March 15, 2007
Business Wire (Thu, Mar 15)

I'll keep holding AMKR.