ACLS is a prime competitor of VSEA valued at a 95% discount to VSEA with similar exposure to a recovery in the end markets.I believe ACLS is significantly undervalued & think it could go up meaningfully soon because it has not yet participated in the recent rally of many of the other comparable stocks (VSEA, MTSN, NVLA,TXN...). I think ACLS has not moved up to the same extent as other names because it has fallen below the radar of many investors due to its stock price (below $1) and the fact that the company's management team is not vocal.

In terms of valuation I think ACLS is is worth at least what I calculate to be liquidation value of $2 per share (vs the current share price of $0.45 for a total return potential of 344%), which is a 20% discount vs book value. The company has over $0.70 per share in net cash today although I expect this to go down some on 2Q. In a recovery scenario I estimated the stock could move up to $5+ and post $0.50+ in EPS. I know the company is burning cash at present but I believe this is a temporary phenomenon which will last only another 1-2 quarters. The reason why the company is burning cash is because we are at the bottom of the semiconductor capital equipment cycle, which is passing as we have heard from so many companies during their EPS announcements. ACLS has also been loosing market share over the past few years because they missed a product cycle, but I also think this has passed with the companies new products which are gaining traction. As the semi market recovers I think ACLS will capture significant share back. Finally, the stock is still trading like a liquidity concern but with the recent sale of one of their division for $130 mil + the company is flush with cash for now. I think ACLS's current price is a classic example of an imperfection in the market. This stock is the largest position I have ever held because the risk/reward is the most compelling I have seen. Good luck to all longs.