jduffy, I wasn't using any criteria. That's my point, without good research into whether or not the surprise negative was just a blip or a more fundamental problem, one can be very disappointed in the "recovery ability" of small tech stocks that have gotten whacked. The biggest issue is usually the fact that most stocks in these categories are carry high P/E's and once they've broken down the psychology of "ever higher" sales, earnings, etc., its a loooong road back.
I'm not saying that's the case with SMCI, just noting that earnings disappointments can have two sides or more. Especially, in this market I'm careful, like you are, to make sure that I don't invest in company's that will continue to disappoint. There has to be a strong case that they can rapidly turn things around.
The other criteria that I have used quite a bit is the cash/share. Stocks that have gotten hit hard, but, are still profitable, have lots of cash and a reasonable story to regain momentum have limited downside(thanks to the cash) and therefore, are generally good investments, IMO.
FYI, be careful with EFII. They should show some good bounce in earnings, but, they are under big time pricing pressure and the market for their color products is not growing at the rate that everyone thought it would. |
