2025 April Stock Idea
One great idea each month
Finding a great investment idea isn’t easy, but that’s exactly what we aim to deliver each month.
Each edition highlights a compelling opportunity from our coverage universe, focusing on catalysts we believe can drive share prices higher and deliver long-term returns.
This month, we’re featuring a niche market leader in the semiconductor supply chain, currently trading 57% below its 52-week high. The drop stems from softer 2025 guidance, impacted by tariff-related uncertainty that has affected nearly every company in the sector.
Despite near-term headwinds, the company’s fundamentals remain strong:
EBIT margins have averaged 23% over the past decade (currently lower)
Return on invested capital (ROIC) has averaged 22%, now closer to 18%
Revenue CAGR: 6.2%
Operating income CAGR: 9.1%
Net income CAGR: 11.3%
EPS CAGR: 14.9%
Total shareholder return over the past decade: +302.7% (~15% CAGR)
This performance shows that price has closely followed earnings per share growth.
However, since the company’s Q4 results announcement and the revised 2025 outlook, valuation multiples have compressed significantly, by roughly 35–40%. It now trades at:
EV/EBITDA (NTM): 14.5x
P/E (NTM): 21.6x
These multiples might not scream "deep value," but in a duopoly, a premium valuation is both expected and deserved.
Source: Koyfin (affiliate link with a 20% discount for StockOpine readers, premium members can benefit from a 3-month free trial)
Contents:
The business
Valuation
Catalysts
Risks