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Axcelis Technologies Hidden Value Play?

|Includes:Axcelis Technologies, Inc. (ACLS)

Axcelis Technologies recently sold their 50% interest in a Japanese Joint Venture to Somitomo Heavy Industries for a cool $122m. The company used the proceeds to pay off all their oustanding debt of $86.4 leaving them cash rich and debt free.

ACLS now sits on a cash hoard of approximately $71m or $0.69 per share with no debt and annual revenue run-rate of $191m. In a market like this finding stocks that trade below their cash value with no debt is the prudent and usually profitabable course of action.  At its current stock price the value of its underlying assets are valued at zero and its cash value is discounted making for a very nice trading opportunity for traders in a sector that has done very well over the last few weeks.

The stock has been trying to breakout over the last month but has held strong support at its 50-day Moving Average. As of today the stock is trading 30% BELOW its cash balance of $0.69. A bounce off the $0.46 should take the stock back to its cash value making for a nice upside potential in the near term. With its cash hoard the downside risk even in this poor economy is minimal. Look for traders to discover the hidden value in ACLS very soon!

 

Dsiclosure: Long ACLS

Stocks: ACLS