AMSSY - Ams AG

[Jurgis]

I bought some AMSSY, but likely I won't hold long and I am not sure it's a great idea.

 

The sexy part is their 3D sensors for iPhone and other phones. That's the cause of the high stock price in 2018.

The concerns are:

- Apple treating their suppliers like crap

- Competition?

- Covid/downturn/etc.

- Capital allocation: they acquire a lot of companies and I don't really know if their capital allocation is good. They might be diworsifying across the bow.

- Overall semi companies are in tough field and not necessarily great long-term holds.

 

https://en.wikipedia.org/wiki/Ams_AG

 

But hey, maybe this is a value idea.  8)

 

Disclaimer: I may sell the position at any time.

[Spekulatius]

Thanks for bringing this up. You left out an interesting part - they just acquired Osram, the LED/ lighting company spun off from Siemens late last year. That may lead the while company in an entirely new direction.

 

I would be interested in your thesis. I guess it is more than valuation. I know Osram a bit, they were fairly strong, but probably not quite best in class in power LED‘s. The LED‘s for lighting applications isn’t really that interesting, because you have to compete with the Chinese on price.

[Jurgis]

My thesis was mostly 3D sensors for phones. But, yeah, they've been acquiring a lot of stuff. And I'm not sure Osram is great business. I'm afraid, I'd have to go through all their (moving) parts to figure out if this company is going anywhere or just nowhere. I guess that's (part of?) the reason for low valuation. People don't like the scattershot conglomerate.

[Borgesian]

I bought into this during the March lows. My thesis is quite similar to yours, they make sensors primarily for consumer electronics (82% of revenues) and I expect more consumer devices to use more sensors as technological progress goes up. Margins are good, management said they do not expect much impact from covid and it looked too cheap at around €8 per share.

 

I'm still undecided on whether Osram was a good acquisition.

 

While I agree about semi companies historically being a tough and cyclical field. I think there are a number of good companies that have rather strong moats such as Cadence, Synopsis, ASML, TMSC etc