Cymer (CYMI) has a savvy management team that enables it to make money with what they have now. This gives me the confidence that in the future they will do well, even though we do not know what may occur.
The company generates income from the money that shareholders give it far better than their industry as a whole. So, if I give them a dollar what can I expect their return on that dollar to be? This is known as return on equity, and the industry average is 4.7%. CYMI comes in at almost double that, 7.5%! The industry (Semiconductor Equipment & Materials) is so far behind Cymer on average. I would also want to know how well they can take the assets they have and use those resources to make money,
Not only do I want to know how well they use their money to generate money, but I may also want to know to they plan to generate money (return on assets). While the industry as a whole over the last year was 3.3%, CYMI fared far better again, proving its management capabilities. The company came in at 5.7%. For every dollar in assets owned by companies in the Semiconductor Equipment & Materials sector, over the last year they made 3.3 cents. CYMI almost doubled that productivity, coming in at 5.7 cents for every dollar in assets owned.
The last question I would ask is: “When you invest money back into the business (whether borrowed or owned) how much money do you make for every dollar you invest? This is called return on capital. For every dollar the industry reinvests in it, they average a 4.3% return. CYMI again proved themselves an industry leader, coming in at 6.6%.
Conclusion: This comany's management team is a leader in the Semiconductor Equipment & Materials industry when it comes to making money with the cash and assets they have now.
Disclosure: No Position