OK, mattie, here's another one:
AETH (9.20)closed above September high on 4X average volume...
Aether Systems (AETH) 8.59 +0.87: Following a 97.5% collapse in price from last year's high of $345, AETH shares may finally warrant a look. Most intriguing about this former momentum favorite is its valuation. After once sporting one of the most egregious price/sales ratios in the history of U.S. equity markets, AETH now trades at an extremely respectable 3.1x trailing sales. The ridiculous multiple once awarded the provider of wireless data products and services was based on many of the same things that fueled Internet stocks during the go-go years: 1) boundless growth prospects, 2) a small float, and the 3) interest of momentum players. Unlike most publicly traded Internet companies, Aether continues to show robust revenue growth. But it is coming at a cost: sizeable quarterly losses. In the most recent quarter the company grew its top-line 54%, in the process ballooning its quarterly loss to $45 mln or $1.10 a share. Cash burn for the quarter was $59 mln, down from the $78 mln spent in the prior year period. The good news is that Aether capitalized itself well when the markets were hot. Currently, company is sitting on almost $600 mln in cash. The key to the AETH stock story is the path to profitability. At this point investors are sitting on the sidelines until there is more visibility on the climb out of the red. Traders, on the other hand, appear to be returning to the stock. Possibly attracting them is that there are a lot of shares still betting that AETH never makes it to profitability. Roughly 4.15 mln shares, or 16.8%, of the company's 24.8 mln share float have been sold short. In a market where stock is temporarily in short supply (in this case due mainly to institutional accumulation), short is the wrong side of the trade to be on. Following AETH's 14% advance since the beginning of the week, traders will be watching near-term resistance levels at $8.82 and $9.35 for breakouts. Think extent of the move will depend on how long we can maintain the bullish market tone. So long as it is intact, AETH should be an outperformer in the tech sector. --Damon Southward, Briefing.com |
