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Strategies & Market Trends : Picks of the quarter -- Ignore unavailable to you. Want to Upgrade?

To: Casaubon who wrote (2664)	2/13/2007 10:21:19 AM
From: Elroy	Read Replies (1) \| Respond to of 20435

Well, during that period of time OVTI managed a 200% appreciation. It didn't do that because of GM compression. Are you talking about the move from ~$11 in Aug '05 to $35 in April '06? If so, it was driven by gross margin expansion. GMs were 33% in July '05, 36% in Oct '05 and 40% in Jan '06. The shares moved almost in lock step with the reporting of those gross margins. You see, if gross margins go up, then the bear story completely falls apart. No one doubts the unit growth for sensors. If price pressure is not a problem then there is no reason to short the stock. That's why I say its the key metric to follow with them.