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Jim (cont'd):  

Last night, On Semi said some earth shattering things when it reported its first quarter, where it crushed the estimates… a monster beat, a thing of beauty… and it did even more issuing better than expected guidance it was picture perfect… On confirmed a lot of what we had been saying about the semiconductor business and tech in general… they were cautiously optimistic that they had passed the bottom, with orders improving since January… the company is also staring to have some real visibility, Wall Street speak for the ability to predict what your business will be like in the far future… but On Semiconductor now has orders coming for two quarters ahead… that is real visibility… and On has been gaining share in notebook power management going from the low teens to around 20% by the end of the year.

So what did it do… what did this stock do on this unbelievable news… well the company had the misfortune of reporting on one of the absolute worst days in tech in ages… just a terrible coincidence that makes me want to sing hallelujah from the rooftops… you would never have gotten this stock down today, let alone down .39 cents, a 6.4% decline on a typical day… uh oh… see, you, you are the winner here… do you know that when I saw what earnings it reported, I was not going to recommend it… I would not even have recommended this stock today, as I would have thought that it would have been up too much… nope… the sell off gives you the perfect entry point to start buying this much improved semiconductor company… no one paid any attention, they were too busy selling today.

But if it starts moving higher in after hours… don’t you chase it… we heard callers today, why do people chase… because they are wrong… we are also seeing the same signs that we have picked up from other companies in this semiconductor complex, like Taiwan Semi, the original and very successful tech spec… and Xilinx (XLNX), inventory has slimmed down and stabilized…not only that, but there have been signs of many rush orders… so even though On Semi does not have a consistent order flow yet, there are definite signs that demand are coming back… the $40b Chinese wireless stimulus is starting to kick in… and some analysts are pointing to healthier order activity, because inventories are too low… and the gadget makers are launching new products.

As for On’s operations, ONNN, it is doing what a good tech should do… it is paying down its $1.1b of debt, past quarter On repaid $79m… that is what we want them to do with their cash, get that balance sheet better… the company has made it clear that this is a main focus.

Here is the bottom line…

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The Bottom Line!:     I think that ON Semiconductor Corp. (ONNN) is right on… it is about as good as you get for $5 and change… the company is paying down debt, increased visibility, talking about a real bottom… this is a great little tech spec… brought down by Cisco (CSCO*) and the Nasdaq today… frankly I can’t believe this one was down at all… it was a major mistake by the market, which means that it was a major opportunity for you.