Top 5 Stocks to Buy According to Charles Montanaro’s Hedge Fund

3. Entegris, Inc. (NASDAQ:ENTG)

Montanaro Asset Management’s Stake Value: $28.5 million

Percentage of Montanaro Asset Management’s 13F Portfolio: 3.43%

Number of Hedge Fund Holders: 26

Charles Montanaro’s hedge fund’s strategy of lifting its stake in Entegris, Inc. (NASDAQ:ENTG) by 7851% during the September quarter appears to be working because shares of the company surged 35% in the last six months alone. Entegris is engaged in providing micro contamination control products, specialty chemicals, and advanced materials handling solutions to the semiconductor and other high-technology industries. 

In the third quarter investor letter, Artisan Partners, a high-value-added investment management firm, said that Entegris is a smart long-term buy. Here is what Artisan Partners stated: 

“Entegris is one of the largest suppliers of advanced materials (high purity gases/chemicals) and filtration systems used in semiconductor manufacturing. The industry’s incredibly complex production environment is getting increasingly onerous—more process steps, greater purity requirements—which is driving higher demand for Entegris’ products and systems. Furthermore, rising chip content across a broad swath of industries (industrial, auto, communications, consumer) to enable new technological advances (5G, AI/ML, cloud, EVs, autonomous vehicles) has driven semiconductor wafer production growth to ~6% annually. The company’s recently reported results were thesis affirming, and we believe the demand drivers for its products are firmly in place. 70% of the company’s revenues are tied to semiconductor factory utilization, and the broader industry shortages do not appear to be abating anytime soon. The other 30% of revenue is tied to capex which we expect to be flat to slightly up over the next couple of years. Given our building confidence around the near-to-medium term demand environment, we added to our position, bringing it to the top of the GardenSM.”