Weekly Pick: PLAB
Semiconductor infrastructure in post-earnings accumulation
Photronics scores high Tier 1 in the small-cap cohort (cusp of mid-cap). It broke out of a long base on the 12/10 ER and has spent the weeks since holding gains, tightening up, and staying bid. That signals accumulation.
Weekly Pick: Photronics, Inc ($PLAB)
Photronics makes photomasks, which are precision templates used to manufacture semiconductors and advanced displays.
Every chip begins with a photomask. It acts like a master stencil that defines where circuits are etched onto a silicon wafer. If the mask is off by even a fraction, the chip fails and there’s no workaround making photomasking critical chip infrastructure.
Photomasks are complex, expensive, and custom-built for each design. As chips become more advanced, the number of masks required per chip increases. That ties Photronics directly to manufacturing volume and complexity, not just headline chip demand.
This is a picks-and-shovels business embedded deep in the production process. When utilization improves, revenue and margins move quickly.
Fundamentals and Ownership
Market capitalization $1.97B.
Current p/e 14.59 | Forward p/e 14.46.
Sales up every year since 2019.
Institutions have 91% of the float with margins improving.
7.5% Short float
Technicals
On the Daily, PRLB has been consolidating in a post-earnings bull flag.
Above the EMA stack in full bull structure on the Weekly and Monthly.
All time frames show room for continuation and no apparent signs of excess.
Daily
Weekly
Monthly
Risks
If PLAB loses the Daily 21 EMA and fails to reclaim quickly, the setup degrades and I’ll sell.
A broad market risk-off move would pressure anything that’s been working.
How I’m Trading It
Primarily shares. Risk is defined below the Daily 21 EMA. As long as price holds structure, I give it room.
Options:
Looking at the March $30 / $35 call spread for some added juice to my shares position. The spread gives me protection in the event the stock chops sideways for a longer period of time vs. naked calls, and I’m willing to forego the tail profit.
I trade what I post.
Weekly Picks and mid-week Trade Notes for subscribers.
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