Is Coherent a Buy?
While a lot has changed this year for Coherent (NASDAQ: COHR) stock, the overall outlook for business remains the same: uncertain, at least in the short term.
The laser systems and components maker has rallied on better-than-feared results as well as rising activity in the OLED screen manufacturing industry. Some signs have emerged that investments in manufacturing facilities might be gearing up for a rebound, and a resolution to geopolitical unrest and trade disputes (between the U.S. and China, as well as one between Japan and South Korea) would also be a welcome event. But after the 50% climb in stock price already this year, at least some of that optimism is now priced in.
Coherent makes industrial lasers and components used in the manufacture of everything from semiconductors and flat panel displays to materials processing, as well as in biotechnology and medical imaging equipment. As a manufacturer and supplier, Coherent's business is thus cyclical and dependent on the capital investing activities of its end customers. Put simply, business spending on equipment ebbs and flows, and thus Coherent's fortunes do as well.
Source Fool.com
