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Technology Stocks : Aeroflex (ARX)
ARX 12.62+0.6%Nov 12 3:59 PM EST
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To: MulhollandDrive who wrote (236)9/18/1997 8:14:00 PM
From: Kerry Lee   of 586
 
I agree with your assessment. I would argue that the "easy money" has NOT been made because buying this at $4-6 was a much riskier play, given the historical trading pattern. A $4-6 stock always runs the risk of becoming unmarginable and traders bail out at the first sign of weakness. I am frankly surprised that the stock did not trade back down to $7 after quick move from $5 to $9 last month. This tells me that there is strong support in $7-9 range ( I am NOT a TA expert so anyone feel free to correct me ). Also, I agree that Institutional money is often not allowed to go near sub $5 stocks and more importantly, stocks that have a low market capitalization, ie below $100-200 million. I would not be surpised to see momentum pick up even more if/when we clear $200 million market capitalization. Lastly, I think the risk of this stock short term is minimized by the $50+ million backlog reported at the end of fiscal 1997. The backlog was REAL orders supported by PO numbers and specific ship dates. This tells me there is a better than 50/50 chance of an upside surprise in the coming quarter or two. The calling of the bonds is also a good sign of positive cash flow..IMHO, this Story is getting better and better. All we need is another Tier One brokerage to start coverage!
It seems to me that Oppenheimer is one of the most conservative houses when they continue to pay Michael Metz for being a flaming bear for the past 2 years .
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