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FormFactor Inc. Message Board

petrofornow 4 posts  |  Last Activity: Feb 4, 2016 3:06 PM Member since: Jun 17, 2001
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  • Reply to

    Good deal for CSCD and FORM Napkin Math

    by petrofornow Feb 4, 2016 11:42 AM
    petrofornow petrofornow Feb 4, 2016 3:06 PM Flag

    Zippy your numbers confirm my estimates. Like your thinking.

    This acquisition is exactly what they were looking for and actually quite hard to find in their sector. A profitable company of good size that could add substantially to revenues and earnings immediately. CSCD checks all the boxes. And judging by their financials they run a tight ship.

    Have been hoping we would see this type of deal and now here it is. Very very happy.

    As for the arbitrage BS we just have to wait for it to blow over. We are headed to much higher prices from here in my opinion and that sunny day is right around the corner.

    Sentiment: Strong Buy

  • Good deal for both parties.
    - CSCD roughly $100M in assets, no debt
    - CSCD steadily growing revenues last few years
    - CSCD and FORM both solid Q4 numbers

    Napkin Math
    First CSCD can use FORM NOLs so tax reduction leads to following numbers
    - $10M+ synergies
    - $16M+ CSCD 2016 profits
    - $25M+ FORM 2016 profits (yahoo finance est 2016)
    - $51M+ earnings 2016 adding above numbers
    - share count 58 + 10 to CSCD = 68M
    - 75+ cents earnings per share 2016
    - PE should be 15-20 range
    - 11.15 - 15$ per share applying PE to earnings

    As seen by the above math I think this will finally boost FORM into the 12-15$ price range.
    This will also make FORM a more attractive target down the line to Teradyne (what are you waiting for!!! Teradyne!!).

    Sentiment: Strong Buy

  • petrofornow by petrofornow Jan 4, 2016 12:37 AM Flag

    Formfactor is the perfect size for a Teradyne industry consolidation move. And their first action could be to drop the insidious blood-sucking stock compensation program.

    Funny at this point there should be enough FORM shares sitting in employee and exec accounts to make the stock comp program almost a stab in the foot. In other words they might benefit to a much greater extent to stop the program to add an immediate boost to the share price thus boosting all the shares they own themselves.

    In any event here's hoping 2016 allows FORM shares a boost out of the more than 5 year range they have been trapped in. I recall when FORM was a solid 20-30 dollar stock. Prob never to be again but maybe we can get to the 15 range. I think dropping the stock comp alone might do that.

    All my opinion, happy new year to all patient longs.

    Sentiment: Strong Buy

  • Formfactor leader in advanced probe cards and would fit Teradyne perfectly. Teradyne, please please buy them. Industry consolidation says this should happen, make it so in 2016. Large cash position and stock compensation program that could be eliminated to boost profits. Perfectly sized for a Teradyne purchase. Win win.

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