<< I think anyone investing in APM at these levels will be very happy in a few years.>>
I generally agree with you, so long as they generate business from the MR transition and get moving on GMR in a serius way. The question is how much more short term loss there will be before it makes the turnaround. Because of this, many people may wait to see a reversal confirmed rather than try to guess the bottom, which may still have 30-40% exposure. I also agree that a reoragnization would be welcome news: but, this company hasn't generally released welcome news when it is needed most.
<< this is one manipulated stock.. But that will only last just so long.>>
I also generally agree. However irrational it is for there to be a
40%+ short interest, it is, nonetheless, reality. If they make the MR/GMR transition sucessfully, you could see one heck of a short squeeze. Even if most of the short interest is against the box, it makes more sense in my opinion to hold puts or sell calls at this level than remain short...selling calls makes particular sense if you think that it will languish around its present level for 6+ months...
With IBM already out with GMR, however, I am not so sure that pricing pressures are going to subside anytime in the next year. Even if it make the transition, margin pressure still remains to be addressed.
BTW, I don't think you were hyping anything. Sometimes, the best long term buys are when things look the worst -- and APM definately looks pretty bad -- and the contrarian voice turns out to be the true voice of reason....
Troy |
