Republican Women Helped Chip Away Democratic House Majority

(Bloomberg) — Democrats retook the House majority in 2018 in part by running a record number of female candidates. This year, Republicans took a page from that playbook to win back some seats.



a close up of a girl in a blue shirt: Representative Elise Stefanik, a Republican from New York, speaks during the Republican National Convention seen on a laptop computer in Tiskilwa, Illinois, U.S., on Wednesday, Aug. 26, 2020. Vice President Pence will make the case for a second term for himself and President Trump today capping a night at the convention designed to emphasize the military, law enforcement and public displays of patriotism.


© Bloomberg
Representative Elise Stefanik, a Republican from New York, speaks during the Republican National Convention seen on a laptop computer in Tiskilwa, Illinois, U.S., on Wednesday, Aug. 26, 2020. Vice President Pence will make the case for a second term for himself and President Trump today capping a night at the convention designed to emphasize the military, law enforcement and public displays of patriotism.

The GOP sliced into the Democrats’ advantage in the House in the Nov. 3 election, powered by their own 2020 class of recruits that will add at least 15 women to their ranks when the next Congress is seated in January.

Loading...

Load Error

“Every single seat that we flipped was either won by a woman, a minority or a veteran,” New York Republican Elise Stefanik, who led an effort to recruit female candidates, said in an interview.

This was another record year for female congressional candidates for both parties. More than 300 women ran for Congress in this year’s general election, 44 more than the previous record set in 2018. Although they are not yet close to parity with men, at least 141 women will be serving in the 117th Congress, according to the Center for American Women and Politics. Several House seats are still undetermined.

There will be at least 28 Republican women in the House next year, up from 15 currently. Democrats will have at least 89 women, compared to 88 now.

Elevate Women

Stefanik had a direct hand in recruiting some of the incoming Republican women through E-PAC, the political action committee she started after the 2018 election, to help mentor and raise money for Republican women candidates.

“They earned the districts themselves, but it was important to provide financial support and mentoring to them,” she said.

One of the beneficiaries was Ashley Hinson, a Republican elected to represent Iowa’s first congressional district.

“There were a couple of key women’s groups,” Hinson said in an interview. “When I look at the work that they did to try to help elevate women candidates for many of these very competitive seats, it was invaluable.”

Independent analysts had projected Democrats to expand their House majority in the 2020 election, but instead will see in shrink. With six races yet to be called, Democrats now have 222 seats to 207 for Republicans. That’s down from the 232 seats they held going into the election, despite Democrat Joe Biden winning the presidential election.

In a press conference last week, House Speaker Nancy Pelosi said she is optimistic about the record number of Republican women, and she congratulated them. Still, the California Democrat cautioned that they will still have their differences.

Video: Record-breaking number of GOP women elected to Congress (TODAY)

Record-breaking number of GOP women elected to Congress

UP NEXT

UP NEXT

“Doesn’t

Read more

Ultra Clean Holdings: Why This Chip Stock Is Not On Our Shopping List (NASDAQ:UCTT)

Thesis Summary

Ultra Clean Holdings, Inc. (UCTT) is a chipmaker with a track record of solid growth. Investors have a positive outlook on the future given the growth of the “Memory” market. However, the company is reliant on a few clients and has subpar profitability. Furthermore, there are risks associated with the foreign side of the business due to regulation. Despite a decent 8% return, we don’t feel the reward outweighs the risk and we remain “Neutral”.

Company Overview

Ultra Clean Holdings produces parts for the semiconductor industry. For those that know the market, the company could be defined as a “foundry” or OEM. These companies operate in contrast to “fabless” chip companies that design semiconductors but don’t produce them in-house. UCTT produces wafers, delivery systems and also provides services to other companies. Below, we can see a breakdown of the distribution of revenues to get a better idea:

(Source: Investor Presentation)

The two main segments, in terms of products, can be broken down into “Memory” and “Logic”. (WFE stands for Wafer Fab Equipment.) UCTT operates in the U.S. and also has a significant presence in South East Asia and China. In fact, revenues have historically been split evenly between domestic and international, although the latter represented 57% in the last quarter. Lastly, let’s look at revenue growth and operating margin:

(Source: Investor Presentation)

The company saw strong revenue during the 2015-2018 period, but that shrank in 2019. Operating margin has been in line with industry standards, around 6-9%. These companies are capital-intensive and operate on thin margins. Lastly, it’s worth mentioning that the balance sheet is remarkably strong, with almost 2x assets over liabilities and a D/E of 0.76

The “issues” with Ultra Clean Holdings

Looking at Ultra Clean Holdings’ operations, there are certainly a few identifiable red flags. Firstly, it is a concerning issue that over ⅔ of revenues come from two customers alone.

(Source: Investor Presentation)

As we can see most of the company’s revenues come from two sources: Lam Research Corporation (LRCX) and Applied Materials (AMAT). This raises concerns over two things, Firstly, revenue growth will be reliant on continued business from these two customers. Secondly, and most importantly, this raises some issues over UCTT’s market power in terms of pricing. UCTT already operates on thin margins, and it is hard to see how the company can raise its profitability in a competitive environment and with such little pricing power.

Another significant cause for concern is the regulatory environment. In recent news, the U.S. government imposed restrictions on China’s largest chip manufacturing company: Semiconductor Manufacturing International Corporation (OTCQX:SMICY). This is bad news for companies like UCTT, which, as seen in the changing distribution of revenue, relies on income from overseas, including China. Certainly, this stock, and the semiconductor industry as a whole, could see significant moves once the result of the election is clear.

Lastly, even if you are looking into investing in this sector of the chip market, Ultra Clean Holdings does not seem like

Read more