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Stocks Under $10 with 50-100% upside potential - 14 days FREE!

10 Low P/E Semiconductor Stocks With Upside

Stocks in this article: KLIC INTT NANO TQNT FSII NVMI UCTT

8. Nanometrics is a provider of advanced, high-performance process control metrology systems used in the fabrication of semiconductors, high-brightness LEDs, data storage devices, solar photovoltaics, as well as by customers in the silicon wafer and data storage industries.

For fourth quarter of 2010, net revenue was $46.1 million, up 75.3% from $26.3 million in the year-ago quarter. Gross margin stood at 52.7%, expanding 200 basis points year-over-year, while operating margin increased 1,630 basis points to 18.8%. Subsequently, net income surged to $26.1 million or $1.12 per share as the company received income tax benefit of $17.7 million.

Full year 2010 revenue more than doubled to reach a record $188 million, driven by higher revenue from automated systems, integrated systems and materials characterization due to customers increased capital spending. The company swung to net income of $55.9 million or $2.43 per share, opposed to a loss of $16.3 million or 87 cents per share in 2009. The company has a strong cash balance of $66.5 million, up 52.7% year-over-year

Going forward, the company expects revenue of $56-$60 million during the first quarter of 2011, representing 50-60% year-over-year increase. Gross and operating margin is forecast at 54-55% and 24-27%, respectively. Lastly, net income is estimated to be 36-44 cents per share, implying an increase of 38%-69% over the prior year levels. As of Dec. 2010, the company had a backlog of $31.4 million compared to $8.1 million a year ago.

Of the five analysts covering the stock, 60% recommend a buy and the remaining rate a hold. There are no sell ratings on the stock. On average, analysts estimate 22.9% upside to $21.67 in value from current levels. The stock has already gained 77.7% during the past one year and is currently trading at a P/E of 5.5

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