IMOS

[eliteG]

IMOS(nasdaq) - ChipMOS TECHNOLOGIES

Mkt Cap:           548.48M
Float:                  39.62M

Profile:   ChipMOS TECHNOLOGIES (Bermuda) LTD. (NASDAQ: IMOS) is the leading independent provider of semiconductor testing and assembly services. The Company is the largest independent provider of testing and assembly services for LCD and other flatpanel display (FPD) driver semiconductors globally and a leading provider of testing and assembly services for advanced memory products in Taiwan. The depth of the Company's engineering expertise and breadth of testing and assembly technologies enable ChipMOS to provide its customers with advanced and comprehensive solutions.

ChipMOS operates advanced facilities in two of the world's leading locations for outsourced semiconductor manufacturing, Hsinchu and Southern Taiwan Science Parks in Taiwan and Shanghai in Mainland China. The Company's geographic presence in this region benefits customers by leveraging the logistical and cost efficiencies stemming from its close proximity to foundries and producers of consumer electronic products.

website: http://www.chipmos.com.tw/


Quick Rundown - Great earnings release, undervalued PE(ttm) and forward PE.. ascending triangle breakout.


Earnings and Fundamentals

IMOS released earnings far above analyst expectations on Thursday.

ChipMos 1Q Profit Surges
Wednesday May 3, 4:45 pm ET
ChipMos Technologies 1st-Quarter Profit Grows on DRAM, Flash Memory Business
http://biz.yahoo.com/ap/060503/earns_chipmos_technologies.html?.v=1

The company also re-affirmed 2nd quarter results.. but they seem to be very conservative.  IMOS is seeing a lot of growth now from the DDRII memory sales:

"Our performance during the first quarter of 2006 was primarily driven by strong demand for our DDR (double data rate) II DRAM (dynamic random access memory) and flash businesses," S.J. Cheng, chairman and chief executive said in a prepared statement.

Cheng added that the transition to DDR II from DDR is continuing to gain momentum, and the company expects DDR II to "significantly" contribute to revenue in the fourth quarter."

The company is currently undervalued with a PE of only 18 and P/S of 1.04 (these numbers have only gotten better since the earnings report).  With strong growth now in place IMOS seems extremely undervalued and will most likely need to correct this by moving higher.. and soon.

This thread on 3SOF provides a lot of great info from Oliver and Michael.. make sure to check it out: http://www.3stocksonfire.org/trading/index.php?topic=1492.msg60237#msg60237


Technicals

IMOS is sporting a 2 year ascending triangle break on strong volume.  Some diagnol support lines will help out on buying after this tall white candle.  IMOS may attack its all-time high ~16 soon.

Long-term:



Short-term:




Trade Plan

We are buying IMOS for both the 3SOF and 3SOV portfolios since it represents a great value play as well as hot technicals.  A good initial stop area would be around 7.15 and IMOS should be attacking 10 soon.  We would not be surprised if the all-time high (16) comes into play as well.

Entry -  We will try to buy IMOS as low as we can tomorrow without it running away.  The ideal would be a pickup around 7.90.  There is also a risk that IMOS will run away so our goal tomorrow will be to pick this wonderful stock up.  

We will buy IMOS according to plan on 5/05

[eliteG]

IMOS(nasdaq) - ChipMOS TECHNOLOGIES

Mkt Cap:           548.48M
Float:                  39.62M

Profile:   ChipMOS TECHNOLOGIES (Bermuda) LTD. (NASDAQ: IMOS) is the leading independent provider of semiconductor testing and assembly services. The Company is the largest independent provider of testing and assembly services for LCD and other flatpanel display (FPD) driver semiconductors globally and a leading provider of testing and assembly services for advanced memory products in Taiwan. The depth of the Company's engineering expertise and breadth of testing and assembly technologies enable ChipMOS to provide its customers with advanced and comprehensive solutions.

ChipMOS operates advanced facilities in two of the world's leading locations for outsourced semiconductor manufacturing, Hsinchu and Southern Taiwan Science Parks in Taiwan and Shanghai in Mainland China. The Company's geographic presence in this region benefits customers by leveraging the logistical and cost efficiencies stemming from its close proximity to foundries and producers of consumer electronic products.

website: http://www.chipmos.com.tw/


Quick Rundown - Great earnings release, undervalued PE(ttm) and forward PE.. ascending triangle breakout.


Earnings and Fundamentals

IMOS released earnings far above analyst expectations on Thursday.

ChipMos 1Q Profit Surges
Wednesday May 3, 4:45 pm ET
ChipMos Technologies 1st-Quarter Profit Grows on DRAM, Flash Memory Business
http://biz.yahoo.com/ap/060503/earns_chipmos_technologies.html?.v=1

The company also re-affirmed 2nd quarter results.. but they seem to be very conservative.  IMOS is seeing a lot of growth now from the DDRII memory sales:

"Our performance during the first quarter of 2006 was primarily driven by strong demand for our DDR (double data rate) II DRAM (dynamic random access memory) and flash businesses," S.J. Cheng, chairman and chief executive said in a prepared statement.

Cheng added that the transition to DDR II from DDR is continuing to gain momentum, and the company expects DDR II to "significantly" contribute to revenue in the fourth quarter."

The company is currently undervalued with a PE of only 18 and P/S of 1.04 (these numbers have only gotten better since the earnings report).  With strong growth now in place IMOS seems extremely undervalued and will most likely need to correct this by moving higher.. and soon.

This thread on 3SOF provides a lot of great info from Oliver and Michael.. make sure to check it out: http://www.3stocksonfire.org/trading/index.php?topic=1492.msg60237#msg60237


Technicals

IMOS is sporting a 2 year ascending triangle break on strong volume.  Some diagnol support lines will help out on buying after this tall white candle.  IMOS may attack its all-time high ~16 soon.

Long-term:



Short-term:




Trade Plan

We are buying IMOS for both the 3SOF and 3SOV portfolios since it represents a great value play as well as hot technicals.  A good initial stop area would be around 7.15 and IMOS should be attacking 10 soon.  We would not be surprised if the all-time high (16) comes into play as well.

Entry -  We will try to buy IMOS as low as we can tomorrow without it running away.  The ideal would be a pickup around 7.90.  There is also a risk that IMOS will run away so our goal tomorrow will be to pick this wonderful stock up.   

We will buy IMOS according to plan on 5/05

[la-onda]

awesome day for IMOS 
additional information:
ChipMOS reports over 30% on-year growth in consolidated revenues in 1Q
   
Press release; Rodney Chan, DigiTimes.com [Thursday 4 May 2006]

ChipMOS Technologies today reported that its unaudited consolidated revenues for the first quarter of 2006 totaled NT$4.37 billion (US$134.5 million), up 30.8% from NT$3.34 billion for the same period in 2005, and up 2% from NT$4.28 billion in the fourth quarter of 2005.

Gross margin for the first quarter of 2006 was 31.5%, compared to 20.3% for the same period in 2005 and 31.5% for the fourth quarter of 2005, the company said.

Net income for the first quarter of 2006 was NT$601.6 million and NT$8.86 per common share, compared to net income of NT$173.5 million and NT$2.58 per common share for the same period in 2005, and net income of NT$475.8 million, and NT$7.03 per common share for the fourth quarter of 2005.

S.J. Cheng, chairman and CEO of ChipMOS, said, "We are pleased with our performance in this quarter, as we were able to deliver an approximately 30% growth in our top-line compared to the same period in 2005. Our performance during the first quarter of 2006 was primarily driven by strong demand for our DDR II DRAM and flash products. Notably, the transition to DDR II continues to gain momentum. We currently expect DDR II memory will exceed DDR in quantity in the second quarter of this year, and revenue from DDR II will contribute significantly to our revenue from memory semiconductors in the fourth quarter of 2006. For the LCD-driver-IC business, revenue was down by 5% compared to the fourth quarter of last year due to lower utilization rates of TCP for monitor applications, primarily resulting from seasonal effects."

S.K. Chen, CFO of ChipMOS, said, "Our revenue growth and product mix, combined with our continued focus on expenses, resulted in another strong quarter for ChipMOS. Our gross margin of 31.5% during the first quarter of 2006 was higher than previously expected. However, we lowered our capital expenditure budget in the first quarter of 2006 due to our revised outlook for LCD-driver-IC demand in the second quarter and excess TSOP assembly capacity following the DDR II transition. We will continue to invest carefully, as we work to align our resources with market demands."

Looking ahead, Cheng, commented, "We remain cautiously optimistic about our business for the near and long term. The ramp-up of our flash business is in line with our expectations. In the LCD-driver-IC segment, we have strategically concentrated our services on LCD-TV applications that we currently expect to be high growth and employed our proprietary COF technology."

Cheng continued, "While sales of LCD TVs remained strong in the first quarter, there was a downturn in the LCD-panel market due to seasonality. We currently expect a growth period for LCD TVs will occur in the second half of this year as a result of price reductions. In addition, we expect other LCD segments, like monitors, will also be back on track in the second half, reflecting normal trends. We currently expect this to lead to growth for our LCD business in the second half this year compared to the first half. We currently also expect our DDR II business to be our major contributor to revenue growth this year as the long awaited transition from DDR to DDR II driven by favorable market prices appears to finally be occurring."

Cheng emphasized that, "ChipMOS is a strategic partner to our key customers as we assist them in solving DDR II capacity shortage problems. As a result, based on current customer forecasts, and an exchange rate of NT$32.46 to the US dollar, we currently expect revenue for the second quarter of 2006 will be in the range of approximately US$137 million to US$143 million, with gross margin, on a consolidated basis, in the range of approximately 27% to 30%. We expect lower gross margin in the second quarter compared to the first quarter primarily because we are expecting lower utilization rates at LCD and DDR production lines and higher depreciation costs from capacity prepared for production needs in the second half this year."


link will be just a few days available:
http://www.digitimes.com/NewsShow/NewsSearch.asp?DocID=00000000000000000000000000005335&query=CHIPMOS

[mexirafa]

hello G,

So, are we buying at 7.90 Limit or Market Open?

Thanks
rafa

[Maestro]

So, are we buying at 7.90 Limit or Market Open?

Entry -  We will try to buy IMOS as low as we can tomorrow without it running away.  The ideal would be a pickup around 7.90.  There is also a risk that IMOS will run away so our goal tomorrow will be to pick this wonderful stock up.   

It looks like one of those situations where we shall have to watch it for a while after the open, if a limit order for $7.90 does not get executed at the open.

Hopefully, G will be around to tell us about his feeling whether the price will retract after the open or whether it will run up.

Still waiting for the daily update. I bet it will be interesting, if it is so late in coming today.

[hermanpu]

8 seems more realistic, its been going for 8-8.10 during premarket

[eliteG]

On the buying instructions I did not want to write down buy at open.. this could pressure the stock and create a gap when we could just rest back and see if IMOS wants to fall back for us.  We will be picking up IMOS today.

[Maestro]

I pulled the trigger when it hit $8.10 again at 9:41 am, got it filled at $8.10 and $8.09

Now I'm going out (ought to watch WDPT, but this is unlikely to hit the stop tarket today)

[Leaira]

I got in at 7.92.

Leaira

[netfishmademerich]

My limit order at $7.90 was filled.  After the first 30 min of trading I thought no way we gonna get that.  Good call G.  Applaud.

[realcoolhead]

In $7.95. (1st time purchase here.)

Question: if there is no official update before the market closes, does it mean it is not purchased?

[eliteG]

In $7.95. (1st time purchase here.)

Question: if there is no official update before the market closes, does it mean it is not purchased?

Hi realcool - We update our entries and exit's on the portfolio page here:  http://www.3stocksonfire.org/3stocksonfire.php

Welcome 

[Maestro]

My limit order at $7.90 was filled.  After the first 30 min of trading I thought no way we gonna get that.  Good call G.  Applaud.

Congratulations!

It makes me wonder sometimes how G does it. He says "The ideal would be a pickup around 7.90" and down to 7.90 it goes, one hour and one minute after the open. Looks like witchcraft 

Watching that one-minute candlestick bar, with the price of every trade flashing up, was almost hypnotic. First, I had a limit buy order in at 7.90. A few minutes after the open I increased that to 8.00. When it didn't get filled I thought I'd hold out for 7.90 again but if it were to print over 8.10 I would buy at market, if not filled by noon buy at market at the prevailing price. Another few minutes later I chickened out and pulled the trigger at 8.10.

Morale of the story: make my plan, then stick to it. (Little damage done in this case)

I am beginning not to mind so much any more if G makes me think a teeny little bit for myself like here where he basically said "buy IMOS on 5 May at whatever price you like, but it would be nice to get it for 7.90". I just have to resist the hypnotic effect of that ticker

[422fwhp]

LOL...I was acting the same way.....$7.90, then $8, then I decided to set a buy for $7.92 and go to break (at work).  Came back and was very pleased...another great call.

Watching the intraday chart is like crack...DONT DO IT!   It's very addicting.

Good luck and happy trading.


laterz...Jody

[Melf Elf]

I didn't get around to looking at IMOS again until this morning, and didn't realize that 3SOF had it.  Applause to eliteG and Oliver for their work on it.

There are a number of ways of looking at the chart.  The action since October, 2004 looks like an Ascending Triangle (not drawn), or a "W"-bottom, since there's only one data point for the top of an Ascending Triangle, the 7.71 high on July 14, 2005.

Regardless of how we label it, the action since October 26, 2004 looks to a Bullish Island Reversal, completed on Thursday's Bullish Breakaway Gap on earnings.

For those unfamiliar with an Island Reversal (they can be bullish or bearish), there was a Gap Down on October 26, 2004, then a Gap Up on May 4, 2006 (Thursday).  Those two gaps create an "island" of prices.  Everyone who bought IMOS between those two dates during the past 1½ years is sitting back on that "island."  What's so bullish about that, is ALL of them now have a GAIN in the stock, and they represent strong support for IMOS on any pullback.  They aren't likely to be "weak--handed longs," and sell on any weakness.  They likey have been long for awhile, and now they ALL have a winner.  That's strong support.

IMOS "could" go back and fill Thursday's gap and still be bullish, but it's MUCH more bullish if it doesn't fill that gap.  We "shouldn't" be allowed to get long the stock "at yesterday's bargain prices."  Another way of putting that is, "The train just left the station.  If you want to be on it, you'll have to 'pay up' for it now."

The pattern targets IN PLAY for the "W"-Bottom breakout are 10.07 and 10.71.  Math is on the chart.  The target for the pattern, if viewed as an Ascending Triangle, also would be the 10.71.  IMOS could go much higher than that.  Those targets just are what this particular pattern breakout suggests.

Good luck to everyone!