Date
27 July 2017
Teradyne acquired Universal Robots two years ago to expand into industrial robotics. Photo: Teradyne
Teradyne acquired Universal Robots two years ago to expand into industrial robotics. Photo: Teradyne

US tech plays: Looking beyond the big names

After breaking the 6,000-points mark on April 25, the Nasdaq Composite Index continued to maintain strong momentum in May.

On Monday, the benchmark closed at 6,149, notching a year to date gain of 14 percent.

Leading tech plays have all done well. For instance, Microsoft shares have gained about 40 percent over the past one year.

Helped by strong cloud services and server software business, the firm reported strong operating cash inflow of US$10.7 billion for the first quarter.

Over the past one year, Microsoft spent US$25 billion on share repurchase and dividend payment, offering shareholders a cash return yield of about 5 percent.

Apart from leading tech plays, Teradyne could be an interesting investment target.

The chip-testing equipment maker is a supplier to mobile phone makers including Apple.

The company acquired Universal Robots two years ago to expand into industrial robotics. A jump in the revenue last year showed the purchase has paid off.

In the past three months, Teradyne shares gained 23 percent, but the valuation is still only 8 times 2018 expected EBITDA.

Linked to two compelling concepts — iPhone and Robotics — and with a decent anticipated cash return yield of around 3.6 percent, Teradyne is definitely worth following.

The full article appeared in the Hong Kong Economic Journal in Chinese on May 8

Translation by Raymond Tsoi

[Chinese version 中文版]

– Contact us at [email protected]

RC

Columnist at the Hong Kong Economic Journal

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