Ultra Clean Stock Is Up 525% as It Powers the Semiconductor Rally Higher

• Ultra Clean Holdings (UCTT) has surged 525% over the past year, reaching an all-time high of $142.43
• UCTT maintains strong technical momentum with a 100% “Buy” technical opinion from Barchart.
• Fundamentals show robust growth with nearly 124% earnings growth projected this year.
• I recommend holding UCTT with a tight stop loss due to valuation concerns and mixed analyst sentiment. Avoid new entries at current levels.

Today’s Featured Stock

Valued at $5.32 billion, Ultra Clean (UCTT) is a developer and supplier of critical subsystems for semiconductor capital equipment, flat panels, and the solar and medical device industries. Ultra Clean offers its customers an integrated outsourced solution for gas delivery systems and other subassemblies, improved design-to-delivery cycle times, component neutral design, and manufacturing and component testing capabilities. Ultra Clean’s customers are primarily original equipment manufacturers. 

What I’m Watching

I found today’s Chart of the Day by using Barchart’s powerful screening functions to sort for stocks with the highest technical buy signals; superior current momentum in both strength and direction, a Weighted Alpha above 50+, and a 60-month beta above 1.5. I then used Barchart’s Flipcharts feature to review the charts for consistent price appreciation. UCTT checks those boxes. The Trend Seeker issued a new “Buy” signal on May 26. Since then, the stock has gained 62.17%.

Barchart’s Technical Indicators for Ultra Clean

Editor’s Note: The technical indicators below are updated live during the session every 20 minutes and can therefore change each day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart.com website when you read this report. These technical indicators form the Barchart Opinion on a particular stock.

Ultra Clean scored an all-time high of $142.43 on June 30.

• Ultra Clean has a Weighted Alpha of +450.61.
• UCTT has a 100% “Buy” opinion from Barchart.
• The stock has gained 525.51% over the past 52 weeks.
• Ultra Clean has its Trend Seeker “Buy” signal intact.
• The stock recently traded at $139.61 with a 50-day moving average of $91.94.
• UCTT has made 14 new highs and gained 64.91% over the past month.
• 60-month beta of 1.94.
• Relative Strength Index (RSI) is at 72.59.
• There’s a technical support level around $119.86.

Don’t Forget the Fundamentals

• $5.32 billion market capitalization.
• 165.03x trailing price-earnings ratio.
• Analysts project revenue to grow 24.16% this year and another 19.65% next year.
• Earnings are estimated to increase 123.57% this year and an additional 67.73% next year.

Analyst and Investor Sentiment on Ultra Clean

• The Wall Street analysts followed by Barchart give the stock 5 “Strong Buy” and 1 “Moderate Buy” opinion with price targets between $92 and $130.
• Value Line rates the stock “Average” with price targets between $40 and $176.
• CFRA’s MarketScope rates the stock a “Sell.”
• Morningstar thinks the stock is 34% overvalued with a fair value of $88.36.
• 12,240 investors are following the stock on Seeking Alpha, which rates it a “Strong Buy” and rates the stock its top Semiconductor Equipment and Materials stock
• Short interest is 7.81% of the float with 2.68 days to cover the float.

The Bottom Line on Ultra Clean

The stock has had terrific run-up but might still have a little more room to run. Since most of the financial sites have expressed some caution regarding its valuation, my advice is to hold it if you own it with a tight stop loss but don’t enter a “Buy” trade at this point.

Additional disclosure: The Barchart Chart of the Day highlights stocks that are experiencing exceptional current price appreciation. They are not intended to be buy recommendations as these stocks are extremely volatile and speculative. Should you decide to add one of these stocks to your investment portfolio it is highly suggested you follow a predetermined diversification and moving stop loss discipline that is consistent with your personal investment risk tolerance.