Stocks Down Under 10 July 2020: Insurance Australia Group, Musgrave Minerals, Pivotal Systems

Pivotal Systems: Riding the semiconductor equipment rebound

Pivotal Systems, based in Fremont California, USA, manufactures key components for semiconductor production equipment. The company listed on the ASX mid-2018, about four months before the last semiconductor upcycle peaked. You see, this industry is highly cyclical, and timing your entry and exit moments is crucial if you want to make money as an investor. The industry was ready to rebound early in 2020 when disaster struck in the form of COVID-19. A lot of Capex plans were put on ice by the global semiconductor manufacturers, which meant very uncertain times for all equipment providers and their suppliers, including Pivotal. As the world is working towards some sort of post-COVID reality, we expect demand for semiconductors to gradually go back to normal levels, with the distinct possibility for catch-up demand from end-users. We believe Pivotal is in a good position to benefit from this.

Also in this edition, Insurance Australia Group (ASX:IAG) and Musgrave Minerals (ASX:MGV).

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