Founder, BWS Financial Inc

Hamed Khorsand

Founder

Independent Stock Specific Research

BWS Financial Inc

BWS provides independent stock specific research focused on companies with distinct value that are going through a special situation where there is a tangible catalyst not priced in. The catalyst can be anything from new product, restructuring, M&A, management change, change in business strategy, etc. BWS’s focus is to understand the change and evaluate the potential return for investors.

BWS utilizes a self formed proprietary approach in discovering stocks by putting great emphasis on deep research. BWS does generate short recommendations following a similar criteria.

Equity Bottom-Up

<ul>
<li>AXTI continued to see a continuation of demand from a wider base of customers in the fourth quarter. AXTI updated its fourth quarter revenue guidance</li>
<li>With the updated revenue projection, AXTI disclosed indium phosphide (InP) has become the slight majority of revenue over gallium arsenide (GaAs) in 2021</li>
<li>We have slightly increased our 2022 estimates with revenue of $163.7 million and EPS of $0.40 from $160.4 million and $0.38, respectively</li>
</ul>


AXTI continued to see a continuation of demand from a wider base of customers in the fourth quarter. AXTI updated its fourth quarter revenue guidance
With the updated revenue projection, AXTI disclosed indium phosphide (InP) has become the slight majority of revenue over gallium arsenide (GaAs) in 2021
We have slightly increased our 2022 estimates with revenue of $163.7 million and EPS of $0.40 from $160.4 million and $0.38, respectively


<ul type="disc"><li>
AXT Inc. (AXTI) had an underwhelming third quarter with revenue towards the lower end of the guidance range even though demand for indium phosphide (InP) substrates grows.</li></ul> <ul type="disc"><li>AXTI has experienced revenue growth of over 40 percent from its ability to ramp production for returning customers. Revenue grew sequentially with expectation of an atypical revenue increase in the fourth quarter.</li></ul> <ul type="disc"><li>AXTI is executing on the substrate side of the business while dealing with expiring raw material contracts that are under market rates. The disparity in the raw material contracts resulted in AXTI reporting a lower-than-expected gross margin, which should rectify itself by the first quarter of 2022. The raw material segment was noise in a quarter that showcases AXTI’s broad customer base could result in steady growth in 2022.</li></ul> <ul type="disc"><li>The change in gross margin composition and timing of improvement puts gross margin in the spotlight the next couple of quarters and leads to us reducing our 2022 EPS to $0.38 from $0.47.</li></ul>


AXT Inc. (AXTI) had an underwhelming third quarter with revenue towards the lower end of the guidance range even though demand for indium phosphide (InP) substrates grows. AXTI has experienced revenue growth of over 40 percent from its ability to ramp production for returning customers. Revenue grew sequentially with expectation of an atypical revenue increase in the fourth quarter. AXTI is executing on the substrate side of the business while dealing with expiring raw material contracts that are under market rates. The disparity in the raw material contracts resulted in AXTI reporting a lower-than-expected gross margin, which should rectify itself by the first quarter of 2022. The raw material segment was noise in a quarter that showcases AXTI’s broad customer base could result in steady growth in 2022. The change in gross margin composition and timing of improvement puts gross margin in the spotlight the next couple of quarters and leads to us reducing our 2022 EPS to $0.38 from $0.47.

<ul type="disc"><li>
AXT Inc. (AXTI) shares suffered from an aggressive seller that led to many investors concerned there was a company-specific event pushing the shares lower. There have been no news alerts in China related to AXTI’s operations and the Company remains on schedule to file its Shanghai listing documents in the next couple of months.</li></ul> <ul type="disc"><li>The current state of the end markets AXTI serves should result in AXTI experiencing revenue growth over the next couple of quarters. There have been no signs of slowing in data center connectivity and LED lighting and sensing.</li></ul> <ul type="disc"><li>The Company’s recent wins with new tier-one customers should result in fourth quarter revenue being higher than consensus estimates.</li></ul> <ul type="disc"><li>The selling pressure looks to have been initiated by a forced seller spiraling into other investors fearing for the worst even though the stock is now selling at a lower valuation than the last time the stock was at current prices.</li></ul>


AXT Inc. (AXTI) shares suffered from an aggressive seller that led to many investors concerned there was a company-specific event pushing the shares lower. There have been no news alerts in China related to AXTI’s operations and the Company remains on schedule to file its Shanghai listing documents in the next couple of months. The current state of the end markets AXTI serves should result in AXTI experiencing revenue growth over the next couple of quarters. There have been no signs of slowing in data center connectivity and LED lighting and sensing. The Company’s recent wins with new tier-one customers should result in fourth quarter revenue being higher than consensus estimates. The selling pressure looks to have been initiated by a forced seller spiraling into other investors fearing for the worst even though the stock is now selling at a lower valuation than the last time the stock was at current prices.

• AXT Inc. (AXTI) secured a new tier-one customer qualification for the second straight quarter creating a demand line up for the second half of the year that could help further grow revenue. AXTI reported second quarter results that were ahead of estimates and guidance, but it was the second customer win that is likely to gain most of the attention as the Company begins to enter production phase.• The broader customer base has reduced AXTI’s dependence on specific customers. The expanded use cases for gallium arsenide (GaAs) and indium phosphide (InP) should provide AXTI with greater longevity to growing revenue. • AXTI reported second quarter revenue of $33.7 million which was $2.2 million higher than the top end of the guidance range AXTI had provided. • AXTI is now on pace to earn approximately $0.38 per share in 2021 compared to our original estimate of $0.29 per share. The increase in revenue over the course of the year should leverage the fixed cost nature of AXTI’s business. We believe the broader foundation of tier-one customers could provide sustainable revenue base to maintain revenue at or above $30 million per quarter.

• AXT Inc. (AXTI) secured a new tier-one customer qualification for the second straight quarter creating a demand line up for the second half of the year that could help further grow revenue. AXTI reported second quarter results that were ahead of estimates and guidance, but it was the second customer win that is likely to gain most of the attention as the Company begins to enter production phase.• The broader customer base has reduced AXTI’s dependence on specific customers. The expanded use cases for gallium arsenide (GaAs) and indium phosphide (InP) should provide AXTI with greater longevity to growing revenue. • AXTI reported second quarter revenue of $33.7 million which was $2.2 million higher than the top end of the guidance range AXTI had provided. • AXTI is now on pace to earn approximately $0.38 per share in 2021 compared to our original estimate of $0.29 per share. The increase in revenue over the course of the year should leverage the fixed cost nature of AXTI’s business. We believe the broader foundation of tier-one customers could provide sustainable revenue base to maintain revenue at or above $30 million per quarter. 

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

In our November Strategy book we summarize the basis for our bullish outlook, discuss the deservedly hot topic of value vs. growth. and highlight actionable opportunities within our Manufacturing, Transportation, Materials, Technology, &amp; Consumer Discretionary Sectors.

In our November Strategy book we summarize the basis for our bullish outlook, discuss the deservedly hot topic of value vs. growth. and highlight actionable opportunities within our Manufacturing, Transportation, Materials, Technology, &amp; Consumer Discretionary Sectors.

United States

AXT, Inc. uses a proprietary crystal growth technique to produce semiconductor substrates for a variety of electronic and optoelectronic applications.  The Company's products are used in wireless and fiber optic telecommunications, lasers, LEDs, satellite solar cells, and consumer electronics.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

AXT Inc (AXTI US)

AXTI: Demand Lifting Revenue

AXTI signed multiple tier-one customers that began to place orders in the second half of the year along with continued demand from AXTI's growing...

BWS Financial Inc

AXTI: Revenue Rising, But…

Even though we continue to see AXTI growing revenue over the next year there could be a hold up on earnings expansion by a quarter or two.

BWS Financial Inc

AXTI: Buying in Selling Pressure

The shares saw severe selling pressure. We do not believe it had anything to do with AXTI directly as the business is continuing to trend...

BWS Financial Inc

AXTI: More Customer Wins

Two straight quarters of tier-one customer qualifications broadens and grows AXTI's revenue base, and introduces a baseline never had before.

BWS Financial Inc

U.S. Equity Strategy: Remain Bullish

In our November Strategy book we summarize the basis for our bullish outlook, discuss the deservedly hot topic of value vs. growth. and highlight...

Vermilion Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)