Stock Alert for ON Semiconductor Corp. (ONNN)
  • Stock Alert for ON Semiconductor Corp. (ONNN)
  • Stock Alert for ON Semiconductor Corp. (ONNN)
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    Stock Alert for ON Semiconductor Corp. (ONNN)

    ON Semiconductor Corp. (NASDAQ: ONNN)

    ON Semiconductor Corp. (ONNN) is a global supplier of power, analog, digital signal processing, mixed signal, advanced logic, data management semiconductors, memory and standard component devices. It designs, manufactures and markets semiconductor components that address the design needs of electronic systems and products. The Company operates through five segments: automotive and power regulation, computing, digital and consumer, standard products and custom and foundry product group.

    The Company’s power management semiconductor components controls, converts, protects and monitors the supply of power to the different elements within a range of electronic devices.

    Its Automotive and Power Regulation segment offers amplifiers, comparators, voltage regulators, and references; AC-DC/DC-DC converters; ignition insulated gate bipolar transistors; and high voltage MOS field effect transistors used in power conditioning and switching applications.

    The Company’s Computing Products segment provides controllers and power MOSFETs for power management in VCORE, DDR, and chipsets.

    Its Digital and Consumer Products segment offers products for digital portable devices in four application areas, such as system power management with FETs and DC-DC converters; EMI and RF filtering; audio and video signal distribution with analog switches and op amps; and LED lighting solutions for LCD screens and camera flash.

    The Company’s Standard Products segment provides standard diode and transistor products, over-voltage protection products, standard logic products, and high frequency products for consumer electronics, computing, wireless communications, industrial electronics and networking markets.

    Its Custom and Foundry Product Group segment engages in the design and manufacture of customer-specific and standard semiconductor products for the automotive, medical, industrial, communications, and military, and aerospace markets. These products fall into the logic, analog and discrete categories used by the World Semiconductor Trade Statistics (WSTS) group. On March 17, 2008, the Company completed the acquisition of AMIS Holdings Inc. On October 10, 2008, the Company acquired Catalyst Semiconductor, Inc.

    The Company was founded in 1999 and is headquartered in Phoenix, Arizona.

    Share Statistics (21-May-10) FY

    2007

    FY

    2008

    %

    Chg

    Q4 2008 Q4 2009 %

    Chg

    Symbol ONNN Revenue, $Mn 1.56B 2.05B 23.9% 488.7M 497.1M 1.7%
    Current price $7.38 Gross marg. 37.7% 36.3% 3.7% n/a 39.1% n/a
    52wk Range: $9.12-5.91 Oper. margin 17.7% -17.3% 203.3% n/a 16.9% n/a
    Avg Vol (3m): 11,518,500 Net margin 15.5% -18.5% 183.8% n/a 13.7% n/a
    Market Cap. 3.17B
    Dil. Shares Outst. 429.7M EPS, $ 0.80 -1.04 230.0% -1.27 0.15 111.8%

    Source: Reuters.com, SEC Filings.

    Financial Summary

    ONNN recently announced that total revenues in the first quarter of 2010 were $550.2 million, an increase of approximately 11% from the fourth quarter of 2009. During the first quarter of 2010, ONNN reported GAAP net income of $63.0 million, or $0.14 per fully diluted share. The first quarter 2010 GAAP net income included net charges of $22.3 million, or $0.05 per fully diluted share, from special items. The special item details can be found in the attached schedules. During the fourth quarter of 2009, the Company reported a GAAP net income of $68.0 million, or $0.15 per fully diluted share.

    First quarter 2010 non-GAAP net income was $85.3 million, or $0.19 per share on a fully diluted basis and includes stock based compensation expense. Fourth quarter 2009 non-GAAP net income was $84.9 million, or $0.19 per share on a fully diluted basis and includes stock-based compensation expense. A reconciliation of these non-GAAP financial measures (and other non-GAAP measures used elsewhere in this release, such as non-GAAP gross margin and adjusted EBITDA) to the Company’s most directly comparable measures are prepared in accordance with U.S. GAAP.

    On a mix-adjusted basis, average selling prices in the first quarter of 2010 were down approximately 1% to 2% when compared to the fourth quarter of 2009. GAAP gross margin in the first quarter was 41.5%. Non-GAAP gross margin in the first quarter of 2010 was 42.1%, including stock based compensation expense. GAAP gross margin in the first quarter included a net charge of approximately $3.7 million, or approximately 60 basis points, from special items. The special item details can be found in the attached schedules.

    ON Semiconductor Reports First Quarter of 2010 Results

    Adjusted EBITDA for the first quarter of 2010 was $127.3 million and includes stock-based compensation expense. Adjusted EBITDA for the fourth quarter of 2009 was $123.5 million and includes stock-based compensation expense.

    Financial Strength (21-May-2010) Company Industry Sector S&P 500
    Quick Ratio (MRQ) 1.61 0.51 1.38 0.80
    Current Ratio (MRQ) 2.13 0.61 1.61 0.96
    Long-Term Debt to Equity (MRQ) 77.15 7.68 17.88 134.03
    Total Debt to Equity (MRQ) 87.58 12.14 29.67 200.29

    Source: Reuters.com, SEC Filings.

    Analyst Consensus

    Buy Outperform Hold Underperform Sell No Opinion

    This is the consensus forecast amongst 23 polled investment analysts. Against the ON Semiconductor Corp company.

    Analyst Detail Buy Outperform Hold Underperform Sell No Opinion
    Latest 12 6 4 1 0 0
    4 weeks ago 11 6 4 1 0 0
    2 months ago 11 6 4 1 0 0
    3 months ago 11 6 4 1 0 0
    Last year 9 6 6 0 0 0

    The 18 analysts offering 12-month price targets for ONNN have a median target of 11.00, with a high estimate of 15.00 and a low estimate of 9.00. The median estimate represents a 51.31% increase from the last price of 7.27.

    Source: www.ft.com

    Consensus Estimates Analysis

    # of Estimates Mean High Low 1 Year Ago
    SALES (in millions)
    Quarter Ending Jun-10 21 570.51 580.43 538.60 435.29
    Quarter Ending Sep-10 21 589.87 616.12 550.00 456.27
    Year Ending Dec-10 22 2,302.30 2,372.25 2,187.00 1,774.03
    Year Ending Dec-11 22 2,429.04 2,568.60 2,239.40 1,898.97
    EARNINGS (per share)
    Quarter Ending Jun-10 22 0.22 0.25 0.18 0.09
    Quarter Ending Sep-10 21 0.24 0.27 0.19 0.12
    Year Ending Dec-10 23 0.89 1.01 0.59 0.41
    Year Ending Dec-11 23 1.04 1.26 0.66 0.63
    LT Growth Rate (%) 6 13.17 20.00 4.00 14.71

    Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=ONNN.O

    Investment Highlights

    ONNN recently announced that it has successfully prepaid and terminated its $169.75 million term loan and terminated its $25.0 million undrawn revolver under its senior secured credit facilities, which would have matured in 2013.  With the repayment of this facility, the Company expects to save annual cash interest expense of approximately $3.4 million based on that day’s LIBOR.

    ONNN has expanded its portfolio of products to support next generation power system design. The NCP4303A and NCP4303B are full featured synchronous rectification controller and driver integrated circuits (ICs) targeted at use in Switch Mode Power Supplies (SMPS) for applications such as ATX power supplies, flat screen televisions, high power AC-DC adapters and gaming consoles. Their unique features provide an efficient and flexible solution for secondary side rectification in SMPS.

    Capable of a maximum operating frequency of 500kHz, these new ICs feature high current gate drivers along with high-speed logic circuitry to provide appropriately timed drive signals to the synchronous rectification MOSFET. The extremely low turn-off delay time of 40ns typical, combined with the high sink current capability of the drivers and the automatic package parasitic inductance compensation system allow synchronous rectification MOSFET conduction time to be maximized – thus increasing the efficiency of the SMPS.

    Externally adjustable minimum on and off times (which are independent of the Vcc level) help to deal with the ringing induced by PCB layouts and other parasitic elements. This results in reliable, noiseless operation. The NCP4303 also features a trigger input that can be used to interface with the primary side of the power supply, allowing use in constant current applications.

    The NCP4303 is available with two different gate drive clamp voltages to tailor to the characteristics of different synchronous MOSFETs available on the market. The NCP4303A has a gate drive clamp of 12V, while the NCP4303B has a 6V gate drive clamp. These versatile devices can be used in various power topologies, such as flyback, forward and half bridge resonant LLC.

    Source: http://www.onsemi.com/PowerSolutions/home.do

    Technical Analysis

    Source: http://stockcharts.com

    ONNN is below its 50-day moving average. This bearish sign is even more significant because the moving average is also trending lower.

    ONNN’s recent volatility has been greater than normal. This is evidenced by the increased distance between the upper and lower Bollinger Bands. These bands measure volatility using standard deviation and a large width is due to high volatility. Additionally, ONNN is trading near its lower Bollinger Band. This suggests that the stock price is low relative to its recent price action.

    The MACD for ONNN currently indicates a strong bearish signal for two reasons. First, the MACD is below the signal line, a 9-day moving average. Second, the MACD is below the critical level of zero, which implies that the underlying moving averages are trending lower.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    May21-2010 symbol Share, $ $ Mn 2010 2011 2010 2011
    Vishay Intertechnology VSH 8.77 1.64B 109.65 n/a 0.85 n/a
    Intersil Corp. ISIL 13.09 1.62B 27.18 n/a 2.73 n/a
    Maxim Intergrated Products Inc. MXIM 17.98 5.44B 75.42 n/a 3.34 n/a
    Semiconductors Median 2.90B 70.75 n/a 2.30 n/a
    ON Semiconductor Corp. ONNN 7.38 3.17B 20.55 n/a 1.83 n/a

    Source: Thomson Financial

    Insider Trading Activity

    NET SHARES PURCHASE ACTIVITY

    Inside Purchases – Last 6 Months

    Shares Transaction
    Purchases n/a 0
    Sales 425,223 24
    Net Shares Purchased (Sold) (425,223) 24
    Total Insider Shares Held 22.66M n/a
    % Net Shares Purchased (Sold) (1.8%) n/a

    Net Institutional Purchases — Prior Qtr to Latest Qtr
    Shares
    Net Shares Purchased (Sold) (28,312,200)
    % Change in Institutional Shares Held (7.9%)

    Source: Yahoo Finance

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