SGTL - trade update -
Added today at prices ranging from $13.40 down to $12.98 for the following reasons:
- tax loss selling (if you have a loss on this, I can't think of a great reason to hold this into January unless you are expecting a rebound)
- related mutual fund selling to get it off their books?
- huge short interest that went from 1,000,000 shares at beginning of year to roughly 3,600,000 shares today. In other words, there are about 2.5 million new short shares at more $20/sh that need to be closed to be profitable. They gotta cover - how much more downside can they expect w/o being stupid?
- close to $3.00 per share in cash
- CES coming up next week
- despite the hiccups, company is still growing
- Insiders stopped selling in October
- bad news (loss of new shuffle design?) already baked in current price
- printer co. acquisition should be accretive in '06
All of this says to me that a rebound to the $16 area could be fast 'n furious. Having said that, the chart is mugly. Indeed, it closed at close to a 52 week low today...not really what you wanna see. By not later than February, we will know if this was a big mistake or, if this trade goes well, something to use as search criteria for next December.
FROM PRIOR POST at 12/28/2005 5:40:58 PM
Short interest increased again in December. It is now up to 3,643,762 shares. Total outstanding is 37.39M shares, which means almost 10%. Hmmmm...the 2006 Consumer Electronics Show (CES), is January 5-8, at the Las Vegas Convention Center...this one has to be a poster-child for tax loss selling and, if I am short, how pretty am I sitting [if I could just get to January for tax purposes - as of ~January 15, 2005 SGTL had 1,531,389 shares short (and this was a 52% increase since Dec. '04)].
Feb: 1,657,209
Mar: 2,503,208
Apr: 2,266,817
May: 3,613,843
June: 4,599,295
3,184,629
3,869,368
4,025,208
Oct 4,082,155
finance.messages.yahoo.com.
FROM PRIOR POST at 12/27/2005 8:40:02 AM
forbes.com.
SigmaTel (nasdaq: SGTL - news - people ) designs analog and mixed-signal integrated circuits for a variety of consumer electronics, including the iPod Shuffle from Apple Computer (nasdaq: AAPL - news - people ). SigmaTel started 2005 well, guiding analysts’ estimates higher, but by midyear a reversal of fortunes led to weaker-than-expected results and downgrades. Further guidance reductions followed in October, pushing the stock below $13, 71% off its 2005 high. The company has no debt, plenty of cash and good cash flow.
FROM PRIOR POST OF 10/10/2005
They warned after the bell. Hmmm, I don't like this one bit. If this wasn't such a value play, I would cut her loose right here. But, the conf call was about as positive as it could be under the circumstances. And ML has said that mgt is great and I do like the acquisition moves. Thus, I will likely stick around until at least the conf call on the 25th (two weeks) and listen to 4th Q guidance. But, if there is no tangible to, I will cut bait. They warned on Q2 and now on Q3, which is now two red flags. One more and .... of course, with such high short interest, and with what they have coming down the pike in '06, this appears to be the golden oppty for shorts to cover. Of course, I have been wrong on this one for sure. And it sure w/n hurt if (1) they also announced a stock repurchase plan; and (2) officers stopped selliing albeit from a 10b5.
forbes.com. |
