One of my "rules of thumb" when looking at high multiple stocks is: how many years before today's price represents a 10 times EPS multiple on those out-year earnings...and of course what are the probabilities of the company reaching that goal? If it is going to take 15 years even with aggressive assumptions, then the stock is indeed "over valued". But if it can achieve that in 5 years, then the stock is "cheap". A great example of this (although I did not invest in it) was Google, when it first came public. GOOG came public in early 2004 at around $85/share and was considered expensive since forecasts were for them to earn about $1/share that year. (they ended up earning $1.50) But due to the explosive nature of their revenue growth COMBINED with an operationaly levered business model, GOOG earned $5.00 in 2005 and $9.96 in 2006. In other words, GOOG was selling at less than 9 times 3 year out earnings at IPO (and remember, GOOG didn't pop after the IPO...you had MONTHS to buy it under $100)
Given that we are at an inflection point in the adoption of OLEDs, I don't think that it is a stretch to believe that UDC can grow revenue north of 40%/year. If they can do that, and retain a 25% after tax margin (it was closer to 30% last year) then in a mere 5 years UDC will be earning north of $5/share. Of course the real beauty of this analysis is that if my numbers are anywhere close to being correct, UDC/OLED will still be selling for a multiple that matches its growth rate....ie 40-50 times...so in 5 years the stock has a good shot at being a $250 stock (or a 5 bagger from here)....but you can buy it today for 10 times those 2019 earnings!
I guess it also depends upon one's definition of "risk". If you buy the CFA version where "volatility = risk" then you are correct..this has been and probably will continue to be a volatile stock, and the volatility driven in part by the supposed lack of information you cite.
But my definition of risk is more driven by "enterprise risk", "risk of TAM shrinking", "risk of a competitor stealing that TAM" and finally "risk of obsolescence" (TAM = total addressable market).
I think we can all agree that there is little "enterprise" risk to UDC. The company has a super strong balance sheet, earns money, and those profits are converted into cash. Even more important there is NOTHING operational that they want to do that they can't fund themselves. UDC doesn't need to spend over $3 billion in cap ex this year like Sammy and LG are doing...UDC just needs to keep feeding the R&D budget and extending their patent lives.
The TAM for UDC is expanding, not shrinking. OLED represents a small double digit % of mobile phone sales, and even smaller % of tablet sales, less than 1% of TV sales and an almost immeasurably small % of lighting sales. If one looks out 10 years, we will see OLEDs in the majority of mobile phones; perhaps 100% of the wearables market, in excess of 33% of TV sales and perhaps low double digits in lighting. On a unit basis that growth is stunning but on a square meter of "glass" covered, that growth is exponential.
Given UDC's strong patent position (and their ability to continue to expand their useful lives) there is little risk of a competitor stealing TAM, and while there MIGHT be another technology that can replace OLEDs, history shows that it will take decades to commercialize, and by then UDC/OLED will have acrrued $billions in material and royalty sales.
Very few companies have such a combination of strong business model; expanding TAM with virtually monopoly pricing power. I would argue that UDC/OLED is actually a "low risk" LT investmt
We might get an update at the ASM in June. Other than that, I would agree with orhers...no real announcement until commercial use is near.
This from the 10Q:
On June 2, 2014, the Company's Board of Directors approved a stock repurchase program authorizing the Company to purchase shares of its common stock up to a total purchase price of $50.0 million over the subsequent 12 months. Since approval of the program and through March 31, 2015, the Company purchased 956,362 shares at a cost of approximately $29.5 million .
You will notice that the company did NOT buy any shares in Q1. When I asked the company about this, they explained it this way: "we set up a 10b-1 plan which set certain price and volume parameters, and those parameters were not hit in Q1"
It sounds to me like they wanted to get a good slug purchased in Q4 (avg of about $30.84) but then they got more selective in the price level they set. It looks like the low for 2015 was about $25.66ish...so my guess is that they set a price in the low $25 area, and it was never hit...too bad, since they would have been able to reduce the float by another 800,000 shares...but I would rather have the stock at $54 than at $25 :)
fyi according to OLED-Info Hehui is the Chinese name for EverDisplay....
nothing like tragedy to help Congress react...many times they react in the wrong way by trying to protect us from things that will never happen again; but in this case, they will actually be doing the right thing.
Always sad to hear that Unions are often the impediment to legislation like this...yes someday trains might drive themselves (they do in mining operations) but we should give the engineer/operators the best technology available so that they can do their job BETTER...in many respect PTC is no different from "auto-pilot" technology on planes...it doesn't replace the pilot; it just gives him/her tools to do the job BETTER!
this is from a DOW web page:
Dow is a technology leader in active matrix OLED (organic light emitting diode) emissive materials, and has been involved in their development for the last decade. Dow has two OLED facilities in Cheonan, Korea and global research and development activity at the Dow Seoul Technology Center.
Carrier transporting layers
That tells me that they have been selling Fluorescent emitters that are being swapped out for Phosphorescent (ie UDC) ones
don't know the number, but I DO know that the S5 was a dud...and of course that played into less than maximum capacity utilization which led to disappointing emitter sales by UDC (and of course the change of host supplier didn't help either). I think we can confidently predict that emitter sales to Samsung will be SIGNIFICANTLY higher in 2015 than they were in 2014
pretty sure DOW is in the fluorescent OLED biz...so when Samsung moved from Green fluorescent to Green phosphorescent that could be a big swing in sales from DOW to UDC. If LG is doing (or has done the same) then that is another big swing. Not sure if they (DOW) are in the host biz, but they probably are....
according to Bloomberg: "Samsung Display Co. is expanding sales of its organic light-emitting diode, or OLED, panels from Galaxy devices to Chinese device makers, including Lenovo Group Ltd."
This is the first time I have heard Lenovo mentioned as a OLED screen purchaser...obviously a large player.
I think this is GREAT news! After all, OLEDWorks is a single focus company, and if they are successful then UDC will be successful with them. If a conglomerate had purchased the Phillips biz, then capital might have been available, but OLED could have eventually become an afterthought. WIth OLEDWorks, it is priorities #1, 2 and 3! It also sounds like Phillips will have a "carry" on future sales, which probably means that OLEDWorks paid less upfront. Again that is great news, since it means that OLEDWorks preserves capital for expansion, and can sell under the Phillips brand name..again if a competitor to Phillips had been the buyer, perhaps the Phillips brand would have been taken off the table....and brand names matter!
I guess professional investors would rather sell at $35 and pay short term gain taxes than tack on another 37% and have deferred any tax liability...or he is merely a self described POS.
we need to remember that their guidance wasn't really 190-230 but rather "$200 million with 5% downside and 15% upside" SO while that translates into the numbers you cite, there must be a reason why they changed the nomenclature...and how they will adjust it. Basically, now they have 3 numbers that can change...the baseline of $200, and the downside and upside percentages (and/or both). Given that last year they adjusted guidance after Q1 and then ended up "missing" those upped numbers, I think they will be VERY reluctant to change numbers unless they think its in the bag. My sense (from parsing their words for years) is that we get the downside risk eliminated this CC. So they are not really upping guidance, but rather reinforcing their confidence that we won't be worse....having said all that...if they DO in fact up guidance (whether it be the baseline or the upside % or both) I think we should all pop champagne, because they will NOT do that unless they have some really strong visability!
Samsung's flexible AMOLED delivers Quad HD picture clarity at 1440 by 2560 pixels with a pixel density of 577ppi. It can deposit more than 3.6 million RGB organic subpixels on its PI substrate, allowing the user to see fine image detail.
The flexible AMOLED display can drive each of its pixels individually. This helps it to reduce power consumption. Its pixel control allows for the use of "partial operation technology" permitting a smartphone to make use of only 7mm of each column of the curved display at any one time -- therein reducing power consumption today by about 20% and possibly more in the future. Comparatively, note that in an LCD mobile display, a simple widget or pop-up message uses the entire backlight unit to illuminate the screen.