Entegris (ENTG): Under-appreciated compounder

Entegris is a chemicals and filtration company that just happens to sell into the semiconductor market. We want to be owners of ENTG as it is high-quality, defensive, and an EPS compounder that will out-grow semi volume growth due to trends of increasing purity and material intensity in semis.

• We think the benefits from the CMC acquisition could surprise on the upside and is not fully appreciated by the market.

• Financials are poised to improve: EPS growth will accelerate meaningfully in late 2023 driven by revenue growth, high incremental margins, cost saves, and continue into 2025 as debt is paid down.

Potential Upside: $114 (+31%) Sensible Downside: $70 (-20%)

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