Amkor Technology and the Internet of Things

IDC estimates annual spending related to devices connected to the “Internet of Things” — or IoT for short — will hit $1.7 trillion by 2020, notes growth stock expert Keith Fitz-Gerald, editor of High Velocity Profits.

I think the figure is more like $2 trillion given that the number of connected devices is growing so rapidly. It’s one of the most explosive, and far-reaching unstoppable trends of your lifetime. And that brings me to our latest opportunity, Amkor Technology (AMKR).

The company is one of the world’s largest providers of outsourced semiconductor packaging and test services. It operates as a strategic manufacturing partner for more than 250 of the world’s leading semiconductor companies, foundries and electronics OEMs.

Through its various offerings, Amkor provides everything from MEMS & fingerprint sensors, touch screen controllers, memory, connectivity, memory, RF and FE modules.

In addition, the company makes power management solutions used in smartphones, tablets, handheld devices, automotive applications, televisions, and personal electronics just to name a few.

Put as simply as I know how, Amkor Technology can provide almost every element of every connected device in the world today.

To that end, the company is already the world’s largest OSAT (outsourced semiconductor assembly and test) for automotive integrated chips.

To meet demand, the company has 10 million square feet of manufacturing space in key countries in Asia, including Japan, Korea, Taiwan, Philippines, Malaysia —- and most importantly, in China, where it operates the country’s most advanced OSAT factory.

The company recently reported full-year 2016 revenue and net income of $3.9 billion and $164 million, which represent year-over-year increases of 35% and 221%, respectively. In Q4/2016, alone, the company paid down approximately $100 million in debt.

Growing top and bottom lines, and a reduction in debt, it’s no surprise the company sports a very healthy Piotroski score of 8 out of a possible 9 points. The Piotroski score is our proprietary ranking system.

What’s more, the stock moved into a state of high positive velocity on March 27, 2017 only a few days ago. In keeping with our research, that means the stock is “going up” and has all the ingredients we know can lead to huge returns. Buy at market and use a protective stop at $9.30.

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