Often on Wall Street, last year’s laggards can make a complete turnaround and head substantially higher the next year. That is exactly what happened to the semiconductor capital equipment companies, many of which took a beating in 2018, especially in the fourth quarter. The question now, after a big-time run, is whether any upside is left, especially given the cyclical nature of the semiconductor industry itself.

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In a new report, Deutsche Bank analysts do note the big rise in the industry since the start of the year, but they also believe that some top companies could still have upside potential. The report said this about the current 2019 run:

Semicap equipment stocks have rallied 25-30% since the beginning of the year, as investors seem to have looked past the near term estimate cuts for calendar year 2019 and are instead focused on the recovery in 2020. We believe investors are generally finding comfort that companies are guiding conservatively for this year and that further estimate downside is limited given estimates have already been cut by ~30%. That said, our recent conversations suggest investors are wondering whether all the good news is already priced in.

Here we specifically focus on two stocks the Deutsche Bank team has coverage on that have the largest upside potential to the firm’s price targets. Both are rated Buy, and they make good sense for aggressive accounts.

Entegris

This small-cap play has seen some very solid insider buying over the past year. Entegris Inc. (NASDAQ: ENTG) is a global developer, manufacturer and supplier of micro-contamination control products, specialty chemicals and materials handling solutions for manufacturing processes in the semiconductor and other high-technology industries.

The company operates in three business segments: Specialty Chemicals and Engineered Materials, Advanced Materials Handling and Microcontamination Control.

The analysts remain very positive on the stock and see it as a more defensive play for investors looking to buy the sector but wary of the equipment companies’ big run.

Deutsche Bank has a $40 price target, which is in line with the Wall Street consensus price target of $40.75 The shares closed trading on Monday at $37.05 apiece.

MKS Instruments

This company that skews somewhat under the radar but its stock offers solid upside. MKS Instruments Inc. (NASDAQ: MKSI) provides instruments, subsystems and process control solutions that measure, control, power, monitor and analyze critical parameters of manufacturing processes in the United States and internationally.

MKS offers pressure measurement and control products used for various pressure ranges and accuracies; materials delivery products, including gas flow measurement products and vacuum valves; automation and control products, such as automation platforms, programmable automation controllers, temperature controllers and software solutions for use in automation, I/O and distributed programmable I/O, gateways and connectivity products; and vacuum products comprising vacuum containment components, effluent management subsystems and custom stainless steel chambers, vessels and pharmaceutical process equipment hardware and housings.

Many on Wall Street have felt for some time that the increase in the Applied Materials display equipment business will have continued positive implications for MKS as it supplies many key subsystems for Applied Materials display tools. In 2017, MKS acquired Newport and added the company’s iconic Spectra-Physics laser brand to its product lineup.

Shareholders receive a 0.93% dividend. The $100 Deutsche Bank price target is less than the $105.13 consensus target. Shares closed most recently at $85.84.

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These two outstanding stocks to buy are still way down from their 52-week highs. The recent sector strength is a legitimate concern, so it may make sense to scale-buy shares rather than go all-in. With that in mind, it is very possible that by this time next year, some serious money can be made.

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