I have received a number of PM on my move into AETH (despite my general bearish stance).
So here is a copy of one response that could make my rationale clearer to all interested:
I bought AETH based on Value. I have played it a number of times in the last few months and have explained
on the thread my rationale (simply do in the "this subject only" category a search under zeev aeth and you
can find all my musing on AETH). I just did it and here is a summary:
From February on I had an OB of $3.81 (#reply-17217981, #reply-17094001) so my buying here is just being
consistent with a long range plan.
After making some outsized profits on AETH earlier last year, I went back into it a number of times, the most
recent, buying at $7.18 (#reply-16522675) on 10/18 selling at 8.06 (#reply-16620444) on 11/7. Buying again at
$6.8 and running away at 7.05 (#reply-16948422, #reply-16997077) few days later, and then even taking a
small loss by buying at $5.91 on 2/5 (#reply-17015312) and selling a month later at $5.22 (#reply-17172713).
Buying at $3.81 here after selling at $5.22 seems like a bargain (g).
Their net tangible book (after taking out goodwill) is $8.95/share, their net cash (after taking off both long term
and short term debt and "other liabilities" off that cash, a very conservative approach) is $6/share. Their burn
rate is going down fast, but is still around $1.25/share per quarter, but they have 10 quarters of cash on hand
to get through the current recession, I think they have a good chance to survive, and a strong market rally
should get them to the $5 to $6 range IMTO.
Of course, in the next few weeks, they could go even lower than that OB I had in since early February.
Zeev |
