Stock Worth Buying: Cohu - Analyst Blog

Zacks Investment Research upgraded Cohu, Inc. (COHU) to a Zacks Rank #1 (Strong Buy) on May 30, 2014. Going by the Zacks model, companies having a Zacks Rank #1 have strong chances of performing better than the broader market.

Why the Upgrade?

Cohu, Inc. reported impressive results for first-quarter 2014 on Apr 30. Since then the company's share price has gone up by 4.5%. Earnings were 2 cents per share, improving over a loss of 32 cents per share reported in the year-ago quarter. Also, the bottom line was way above the Zacks Consensus Estimate of a loss of 19 cents per share.

Revenues grew by 22.1% year over year, supported by a sales increase of 88% in semiconductor equipment, 7% in microwave communications and 5% in video equipments. Orders grew 7.4% sequentially while backlog was solid at $101.6 million. Cost of sales rose by 10.3% while operating expenses were down by 4.5% year over year.

For 2014, Cohu, Inc. anticipates revenues to lie in the $72−$80 million range, up 11.1% over the prior year at the mid point.
 
Over the last 60 days, the Zacks Consensus Estimate for Colhu, Inc. has improved from a loss of 13 cents per share to a loss of 5 cents per share for 2014. Also, this estimate represents a year-over-year improvement of 94.7%.

Other Stocks to Consider

Cohu, Inc. currently has a $272 million market capitalization. Some other stocks worth considering in the same industry include Kulicke and Soffa Industries, Inc. (KLIC), Intevac Inc. (IVAC) and Ultratech, Inc. (UTEK). While Kulicke and Soffa Industries sports a Zacks Rank #1, both Intevac and Ultratech carry a Zacks Rank #2 (Buy).