Should You Hold Entegris (ENTG)?

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The London Company, an investment management company, released “The London Company Mid Cap Strategy” third quarter 2024 investor letter. A copy of the letter can be downloaded here. U.S. equities experienced an upward trend in the third quarter, with most major indices recording mid-single-digit gains. Notable market changes characterized this period. Despite these challenges, the stock market concluded the quarter on a positive note. The portfolio returned 7.9% (7.8% net) during the quarter compared to a 9.2% increase for the Russell Midcap Index. Both stock selection and sector exposure were modest headwinds to relative performance. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.

The London Company Mid Cap Strategy highlighted stocks like Entegris, Inc. (NASDAQ:ENTG) in the third quarter 2024 investor letter. Headquartered in Billerica, Massachusetts, Entegris, Inc. (NASDAQ:ENTG) is a micro contamination control products manufacturing company. The one-month return of Entegris, Inc. (NASDAQ:ENTG) was -6.18%, and its shares gained 12.11% of their value over the last 52 weeks. On November 5, 2024, Entegris, Inc. (NASDAQ:ENTG) stock closed at $103.12 per share with a market capitalization of $15.571 billion.

The London Company Mid Cap Strategy stated the following regarding Entegris, Inc. (NASDAQ:ENTG) in its Q3 2024 investor letter:

"Entegris, Inc. (NASDAQ:ENTG) - ENTG lagged the broader market during 3Q due to a more gradual recovery for trailing edge nodes, slower wafer starts, and delayed manufacturing capex spending. The near-term market conditions and different recovery rates throughout the industry have led to a more cautious outlook for the remainder of the year. That said, its solutions for advanced technology and incremental wafer content gains should propel a faster recovery next year. ENTG is one of the most diversified players in the semi-materials industry with its size and scale. We remain attracted to the industry's high barriers to entry, limited competitors, and high switching costs."

A technician in a specialized cleanroom suit, preparing a microcontamination control pipeline.

Entegris, Inc. (NASDAQ:ENTG) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 37 hedge fund portfolios held Entegris, Inc. (NASDAQ:ENTG) at the end of the second quarter which was 42 in the previous quarter. Entegris, Inc.'s (NASDAQ:ENTG) third quarter sales were $808 million, down 9% year-over-year and 1% sequentially. While we acknowledge the potential of Entegris, Inc. (NASDAQ:ENTG) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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