Makes me rethink my target price a little
Slob - Don't go soft on me now !
For me, ADPT still has the following "problems" -
1) They missed targets last quarter,
2) The industry is currently experiencing a slow-down,
3) Asian effects haven't yet fully filtered through,
4) Nearly all PC stocks are likely to miss this quarter's targets,
5) Brokers are revising ADPT earnings downwards,
6) ADPT are down-sizing staffing levels, but ahead of a second (?)
rationalisation due with Symbios,
7) Further cash demands likely due to "surprises" with Symbios,
8) Their credit rating is mediocre,
9) Stock buy-back which was holding the price up is likely reduced
or cancelled,
10) Will they need to issue more shares to improve liquidity ?
11) Still trading at a PSR of 2.2,
12) Trading on a forward PER of 17 for the most recent earnings estimates,
13) From the insider selling it appears that management have (had ?)
doubts about the future,
14) Shareholder suits may have some substance ?,
15) Their main market is tied to the HDD sector which is under major
pricing and margin pressure,
16) The stock price trend is currently strongly downwards,
17) Stock prices in general are significantly over-priced and probably
due a correction,
Errrrr, did I miss anything ?
Now don't get me wrong about the long term prospects here. The
management of this company have had a GREAT run, which did not happen
by accident. The problem is that I can't see much bottom line
improvements for 9 months or more. So, given that general stock
prices are unrealistically high, and that ADPT still has a lot of
scope to move downwards, why wouldn't your estimate of $15 still be
realistic (or possibly even optimistic) ?
And in case anyone still has doubts about my perspective
I am simply looking for value opportunities in an over-priced market
and don't yet find any in ADPT. (I am not short ADPT !)
Mark |
