Shares of ON Semiconductor Corp (NASDAQ: ON) have added
about 12% over the last three months.
Onsemi is reinvesting a huge portion of its
profits at a high rate of return, which has caused the company to see
substantial growth in its earnings.
ON Semiconductor, commonly known as Onsemi, is working toward a future
focused on automotive and industrial end markets. Management expects these two
segments will combine to contribute 75% of revenues in 2025 compared to 60% in
As well, it's positioned in high-growth markets within those industry
verticals. It is a known factor that automotive companies are investing heavily
in electric vehicles (EVs), advanced driver assistance systems (ADAS), and
autonomous driving technology. Meanwhile, the automation of the industrial
sector is another hot secular growth trend to invest in.
And, Onsemi has exposure to all these end markets.
Why the ON Weekly
Options Trade was Executed?
ON Semiconductor Corp (NASDAQ: ON) has again proven
that its refocus on automotive and industrial use cases was the right move at
the right move. The Q1 results echo the news that onsemi shines. The company’s
automotive-oriented revenue grew by 38% in Q1 and equaled 50% of revenue. The
shift drives that strength to EVs and self-driving vehicles, which will drive
demand for years.
The takeaways for
investors include onsemi’s position within the market and its ability to
produce growth where others cannot. This means that onsemi will lead the group
and outperform the SOXX index in 2023.
“We continued our
momentum with first quarter results exceeding expectations despite
macroeconomic uncertainties … As secular tailwinds propel our business, we are
prudently managing our operations to deliver consistent and predictable results
in the current market environment,” said Hassane El-Khoury, President and CEO
The ON Weekly Options Trade Explained.....
** OPTION TRADE: Buy ON JUN
09 2023 90.000 CALLS - price at last close was $1.75 - adjust accordingly.
Obviously the results will vary from trader to trader
depending on entry cost and exit price that was undertaken.
Entered the ON Weekly Options (CALL) Trade on Tuesday, May 30, 2023, at 10:38, for $1.04.
Sold half the ON weekly options contracts on Thursday, June 01,
2023 for $1.60; a potential profit of 54%.
Total Dollar Profit is $160 - $1.04 (cost of contract)
Sold the remaining ON weekly options contracts on Thursday, June 07,
2023 for $2.68; a potential profit of 158%.
Total Dollar Profit is $268 - $1.04 (cost of contract)
TOTAL PROFITS = $56 + $164 = $220
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Semiconductor Company Profile.....
Semiconductor Corporation is a global leader in the semiconductor industry,
providing a comprehensive range of semiconductor solutions, including power and
signal management, logic, discrete and custom devices, and sensor technologies.
Headquartered in Phoenix, Arizona, the company operates in a highly competitive
industry, serving customers across various industries, including automotive,
industrial, communication, computing, consumer, and medical. In 2021 ON
Semiconductor was ranked on the Fortune 500 list of the top 500
Semiconductor has a diverse and experienced executive team composed of leaders
with extensive finance, operations, and engineering backgrounds. Together, they
bring a wealth of experience to the table, enabling the company to stay ahead
of the curve and provide innovative solutions to its customers. The company's
management team is led by Chief Executive Officer Hassane El-Khoury, who was
appointed to the position of President and CEO in December 2020. Before joining
the team at ON Semiconductor El-Khoury was the CEO of Cypress Semiconductor,
which was sold to Infineon in Q1 of 2020. Other notable team members include
Thad Trent, the Chief Financial Officer, and Felicity Carson, the Chief
years, ON Semiconductor has shown consistently positive financial performance.
The company has reported steady revenue growth over the past three years, with
annual revenue and net profit rising yearly. Furthermore, ON Semiconductor has
maintained a conservative balance sheet, with total debt significantly lower
than total assets. This financial stability has enabled the company to invest
in research and development, expand its operations, and pursue strategic
acquisitions. ON Semiconductor trades at a price-to-earnings ratio that aligns
with its industry peers. The company's stock has performed well in recent
years, with a five-year return of 85% and a ten-year return of 144%. Recently
the stock has seen significant growth, driven by the company's strong financial
performance and the acquisition of GT Advanced Technologies.
In 2022, ON
Semiconductor completed the acquisition of GT Advanced Technologies, a leader
in silicon carbide materials and technology. This acquisition positions the
company to capitalize on the growing demand for silicon carbide materials in
high-power, high-efficiency applications.
semiconductor industry is highly competitive, and ON Semiconductor faces
intense competition from established players and new entrants. The industry is
also subject to technological advancements and regulatory changes that can
significantly impact the company's operations. Additionally, the company's end
markets are subject to economic and political factors that can affect product
these challenges, ON Semiconductor has several growth opportunities in the
coming years. The company is investing in new products and technologies, such as
wireless charging and advanced imaging sensors, with significant growth
potential. Furthermore, the company is expanding in emerging markets,
particularly in Asia, where it has seen strong product demand.
Further Aspects Relating To Onsemi …..
Onsemi’s intelligent power technology helps lower the weight, extends the range
of EVs, and enables fast charging. Meanwhile, its intelligent sensing solutions
enable industrial automation, ADAS, and autonomous driving.
There’s also a strong secular shift in investment toward EVs from
internal combustion engines (ICEs), and there's no sign of a slowdown in
spending on industrial automation.
Meanwhile, Onsemi's content per vehicle is far higher on EVs than on ICE
vehicles, and the explosion of investment in digitalization in manufacturing,
and the productivity improvements that it brings, ensure spending on sensing
technology will remain strong. As such, the company looks set for long-term
growth following a lull in 2023.
For further Information Read.....
“ON Semiconductor Shares Are Gaining Ground!”
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