As a long-term investor, finding the right balance between growth and stability is always the goal. Recently, I've been adding more Axcelis Technologies (ACLS) shares to my portfolio using a Dollar Cost Averaging (DCA) strategy. Even though the stock has been trading below its moving averages and facing short-term volatility, I’m confident in the long-term outlook of this company.
Why I’m Acquiring ACLS
1. Stable Business in a Challenging Market ACLS is a key player in the semiconductor equipment industry, and while the broader sector has faced headwinds recently, Axcelis stands out due to its strong financial health. The company consistently posts solid profit margins, with operating margins above 23%, and continues to demonstrate strong revenue performance, despite the recent lack of systems revenues from the memory market (BOVNews).
Even though the stock has dropped nearly 50% from its 52-week high and is currently trading well below its 20-, 50-, and 200-day moving averages, this presents a great opportunity to acquire shares at lower prices (BOVNews).
My DCA approach allows me to steadily build my position in Axcelis without trying to time the market.
2. Resilience in a Volatile Market Axcelis has shown some short-term volatility, as its stock price fluctuated by almost -10% in the last 20 days (BOVNews).
While this may scare off some investors, I see this as a natural part of the market’s ebbs and flows, particularly for a company operating in the technology sector. Its long-term potential in the semiconductor industry outweighs these temporary challenges.
By purchasing shares regularly, I can take advantage of these dips in price, knowing that I’m buying into a company with a solid track record of profitability and innovation.
The Missing Piece: Dividends
As much as I enjoy accumulating ACLS shares, there is one aspect of the company that I wish would change—its lack of dividends. Dividends provide a steady stream of income for investors, and for a company with such strong profitability, it would be nice if Axcelis rewarded shareholders with regular payouts.
However, I view the lack of a dividend as part of Axcelis’ growth strategy. Instead of distributing profits to shareholders, the company likely reinvests in R&D and expansion efforts to capitalize on the future demand for semiconductor equipment. This aligns with my long-term perspective as I believe Axcelis is positioning itself for sustained growth, even though it means I won't receive any cash flow from my investment in the short term.
My DCA Strategy
Dollar Cost Averaging is perfect for stocks like ACLS, where volatility can cause dramatic shifts in price. By purchasing a fixed dollar amount of shares regularly, I avoid the risks of trying to time the market. Over time, this strategy averages out the cost of my purchases, ensuring that I benefit from dips in price while remaining committed to the stock long term.
With ACLS trading well below its historical highs, it feels like a great time to keep adding to my position at discounted prices. The technology sector may face challenges in the short term, but I’m confident that companies like Axcelis will thrive as the demand for semiconductors grows in the coming years.
Conclusion
Axcelis Technologies may not be offering dividends, but its solid profitability and position in a critical industry make it a stock I’m happy to keep acquiring. While short-term volatility and trading below moving averages can seem concerning, it’s a great opportunity for investors like me to buy into a stable, well-run company through Dollar Cost Averaging. I’m confident that in the long run, my investment in ACLS will pay off, even if it’s not through dividends—yet.
If Axcelis ever decides to initiate a dividend program, it would certainly make an already attractive stock even more appealing. Until then, I’ll keep accumulating shares and enjoy the steady growth of this promising technology company.
Please note that this post is not financial or investment advice. Investing in stocks involves risks, including the potential loss of principal, and past performance is not indicative of future results. Always do your own research or consult with a professional financial advisor before making any investment decisions. For more information on Axcelis Technologies, visit their Investor Relations page.