CML, Nanoco & Electrocomponents: 3 semiconductor stocks to buy

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CML, Nanoco & Electrocomponents: 3 semiconductor stocks to buy

 CML, Nanoco & Electrocomponents: 3 semiconductor stocks to buy
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Highlights

  • CML Microsystems announced a half-year dividend of 4.0 pence per share payable on 17 December 2021 to shareholders.
  • Nanoco Group recorded an adjusted operating loss of £4.6 million for 2021 compared to £4.8 million in 2020.
  • Electrocomponents’ profit before tax rose by 145% to £136.1 million in H1 2021 compared to the previous year’s £55.6 million.

Chip shortages across the globe stopped many customers from purchasing next-generation games consoles, kitchen appliances, laptops, televisions, and smartwatches. According to a new report by Abobe, overall Black Friday sales of laptops, TVs, and consoles remained low due to the global chip shortage. Online buyers spent only about $8.9 billion in 2021, a decline from the previous year’s back Friday spending of $9 billion.

In the UK, however, during the Black Friday season, shoppers spent over 20% more compared to last year.

Let us review the investment prospect in three semiconductor stocks - CML Microsystems, Nanoco Group and Electrocomponents.

CML, Nanoco & Electrocomponents: Market cap and one year return

 (Data source: Refinitiv and company release)

CML Microsystems Plc (LON: CML)

CML Microsystems is a developer of RF, mixed-signal, and microwave semiconductors for communications applications. In September this year, CML Microsystems moved from the standard segment of the London Stock Exchange to the AIM sub-market of the exchange.

CML Microsystems’ revenue increased by 30% year-on-year to £8.00 million for the six months ended 30 September 2021 compared to £6.14 million for the half-year ended 30 September 2020. Its profit before tax for the period rose to £1.0 million from the previous year’s loss of £0.3 million.

CML Microsystems announced a half-year dividend of 4.0 pence per share payable on 17 December 2021 to shareholders, this was up from last year’s 2.0 pence per share.

The shares of CML Microsystems closed at GBX 420.00 on Monday, 29 November 2021. The market cap of the company stands at £69.71 million, and in the last one year, the shares of CML Microsystems returned 81.10% to shareholders.

Nanoco Group Plc (LON: NANO)

Nanoco Group is engaged in the research and development, licensing and production of heavy-nanomaterials and Cadmium-free quantum dots, also known as CFQD® quantum dots, that are used in varied commercial applications. Recently, Nanoco Group inked a technology agreement with a Europe-based electronics company.

Nanoco Group’s revenue stood at £2.1 million for the year ended 31 July 2021 compared to £3.9 million in 2020. The decline in revenue can be attributed to the completion of its contract with a US customer in 2020. Despite the fall in revenue, the company’s adjusted operating loss stood at £4.6 million compared to £4.8 million in 2020.

The shares of Nanoco Group closed at GBX 22.75, down by 1.73% on Monday, 29 November 2021. The market cap of the company stands at £70.77 million, and in the last one year, the shares of Nanoco Group returned 120.87% to shareholders.

Electrocomponents Plc (LON: ECM)

Electrocomponents is an FTSE 250 listed distributor of electronics and industrial products. The revenue of the company for H1 2021 stood at £1,208.9 million compared to £908.9 million in H1 2020, representing an increase of 33% year-on-year. The company’s profit before tax rose by 145% to £136.1 million in H1 2021 compared to the previous year’s £55.6 million.

For H1 ended 30 September 2021, Electrocomponents declared an interim dividend of 6.4 pence per share to shareholders, which is a 5% increase from 6.1 pence per share in H1 2020.

The shares of Electrocomponents closed at GBX 1,213.00, up by 1.68% on Monday, 29 November 2021. The market cap of the company stands at £5,618.06 million, and in the last one year, the shares of Electrocomponents returned 51.91% to shareholders.

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