Stock Bull,
Okay, here's what I meant. Let me preface this by saying that I don't follow ONTK nor LRCX. Apparently, ONTK has a proprietary "CMP" process used in mfr'g chips. They have 7.74 million shares outstanding, and are projected to do $ 0.36 this year and $ 0.73 next year in EPS--nice EPS growth. So lets say that ONTK meets expectations and does 73 cents next year. That amounts to $5.7 million in earnings. Now, LRCX, from what I have gathered, is a more integrated chip making equipment mfr. They have 30 million shares out. Projected to do $1.05 next year in EPS. That's roughly $31 million in profits. Integrate ONTK into LRCX. ONTK now accounts for $ 5.7 million of LRCX's $37 million in profits--that is 15%. Not exactly a pure play. 85% of LRCX's profits are coming from products that BB didn't like as much as the ONTK story. That's why its not a pure play anymore--it only accounts for 15% of LRCX's projected earnings. Given the leverage of only 7.74 million shares (which ONTK has) I can see how BB saw this as a pure play with a lot of earnings leverage. Sure, LRCX will benefit, but only to a degree, as opposed to had ONTK remained separate.
I can only guess as to what BB Sr. was thinking, but it is common practice to discontinue coverage of a special situation stock when the special situation disappears. I also doubt that BB himself will respond on this bb.
What makes me think you guys are bitching? Because your crying foul over a trade that apparently made you money. Take your profits and be happy--it beats the hell out of the alternative. Sure its free speech, but it affirms my notion that some people will never be happy unless they buy in at the absolute low and sell at the absolute top. Believe me, you will drive yourself crazy if you think you need to hit the absolute high for a stock to satisfy yourself--it just isn't gonna happen. Bitch about your losers, not your winners.
Gary |
