jbkelle,
Although I certainly cannot give you advice on how to play CATT, I certainly share your sentiment on price movement going forward. While I personally do believe that your price targets may be a bit conservative (I do believe that the company will earn close to a buck next year, and that will help get us quite a bit higher), I would not be surprised to see us take out the old highs soon after the next earnings release. Based on the last CC, business is stronger than it has ever been. Furthermore, the company wanted analysts to keep estimates the same due to a pending software release (which according to Chase H&Q has occurred). That leads me to believe that earnings this quarter should beat the estimates easily. Furthermore, this is by far the toughest of the quarters for CATT, as guidance is usually quite low coming into the quarter (due to August being a month of a lot of vacations for most people around the world). I do expect to see a release on the software release in the next few weeks, but I am not sure if they will pre-release at the same time. I hope that they do, and then report a penny or two above guidance at that time. We will see.
As far as my shares, I am fully loaded in CATT right now, with shares in both my Roth account and my taxable accounts. I do not plan on selling any shares for the near-term, but may in my roth account if the opportunity presents itself at a higher price (nothing below $35). I do believe that we will struggle to get into the upper 20's as selling pressure should be pretty strong, but if we can get some institutional support, it will be a lot easier.
One final comment - In a prior conference call, management was talking about the stock buyback, and stated that they had not done any. They stated that one of the reasons that they did not want to buy shares back was that they wanted to increase the float, rather than reduce it. That leads me to believe that if we can get into the $40 range or higher, we may get a split announcement. That would also allow more institutions to get in due to the increased liquidity.
Just my thoughts.
Keith |
