Tech, here are some thoughts and ramblings about GTW.
GTW is in a very harsh downtrend. The trend is our friend. I would not buy into it, or buy upstrike calls until we break it.
If you have the capital to pull it off (I do not), selling calls would be a way to make some $$$.
I don't anticipate them breaking the trend for a while. The boxmakers are pretty strong right now because if the DELL report. GTW has been weaker than I would have hoped. Because of a failure to break out this week, I don't think we will for some time.
Another thing I would look for is weakness going into the earnings warning season. I can assure you there will be some wild swings as rumors are spread.
It will not be until after GTW posts solid earnings (whether it be this quarter or a eyar from now) that we can begin to rise.
And that brings me to another point. I have held GTW so long that I never really thought much about it. But I was just looking at some fundamentals. GTW looks, despite its lofty p/e, very attractive. we are trading at .78 p/s! That is compared to DELL's 3. GTW has a price/book of 5.3; DELL has 24.64.
But this is meaningless if GTW can't turn things around. It's all about profit, and GTW aint got it!
But this seems like the quarter for GTW to do it. Last quarter, they took a large writeoff for inventory. I'm sure they also threw a few other things in there, too! They should be starting clean this quarter, if they played things right. Like DELL, they will also benfit from lower component prices. Prices have obviously declined too, but hopefully GTW will be able to pull a DELL and still profit from this.
So GTW, despite a couple aweful quarters, is still dirt cheap. Maybe we are too focused on p/e ratios. I got burned on APM because it looked so cheap! But check this out. If GTW can handle new estimates of $2.00 for next year, than they are trading at a forward p/e of only 15. All the other numbers look great.
Brian |
