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Hawk’s Nest

Bull Spreads Open in Small-Cap Semi-Equipment Stock Camtek (CAMT)

by | Mar 8, 2022

Camtek (CAMT) with small but interesting spreads on 3/7 with the August $22.50 puts sold to buy the $30/$40 call spread 1000X for a net $0.85. CAMT has no other notable open interest. The $1.37B company sells inspection and metrology equipment for the semiconductor industry servicing areas like packaging, memory, complementary metal oxide semiconductor image sensors, micro-electro mechanical systems, radio frequency, and other segments. They have a large footprint in both the packaging market and compound semi markets which represent applications like 5G, AI, EVs, and IoT. Their equipment is a key component in adopting new tech and products while delivering a high yield and stable production, both extremely critical now in a time with supply chain issues. CAMT has a wide range of customers with 1500 systems installed worldwide with over 130 customers. They’re installing new fabs to support demand while expanding manufacturing capacity. BAML has a Neutral rating for shares, $43 PT, as the company is a beneficiary of the growing cost and complexity of semi manufacturing, but its set-up is tougher in 2022 as industry sales decelerate and Camtek ramps its spending to support long-term growth initiatives. Stifel with a $47 PT and notes CAMT is well positioned in its existing served markets, particularly for advanced packaging applications. Further, Camtek’s positioning in the China packaging market, where significant wafer bumping capacity buildout is occurring, is very strong and likely to remain so.