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Hutchinson Technology Inc. Message Board

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  • longtimefollower longtimefollower Jul 27, 2011 1:49 AM Flag

    Slightly exceeded my expectations.

    I agree with everything you say, and think you put it very well. Except I am a little less certain of the price targets you espouse...although i can certainly "taste" them...and JUSTIFY them, in my mind.

    I've been doing value investing for a long time, and I KNOW how the Street tends to value stocks, relative to fundamentals, and perceptions of risk, and the expected effect on a stock price from a SUDDEN CHANGE in those measures.

    It is therefore AGAIN worth repeating that with the DRAMATIC REDUCTION IN RISK here, the last several weeks (company is now guiding for roughly cash flow neutral in the CURRENT QUARTER...and positive in the next!), the current stock price is still, in every reasonable sense, "artifically depressed" (a lingering effect of the huge sell off of the last couple years).

    One has to ask, therefore, with the balance sheet we have now, and the expected return to profitability, what the RISK is....and why we are trading at such a dramatic discount to historical trading ranges (apart from needing to factor in the lower convert price of $8.60 vs. $36 on the "new" converts).

    This stock needs to start being priced on its POTENTIAL....since its risk should be MUCH MUCH less of a concern, than it was, say, a mere 2 1/2 to 3 months ago. (This is an IMPORTANT point on why HTCH is still very very undervalued.)

    The pricing in of doomsday was absurd. But for those who thought that sales would just keep declining, it was hard to rationalize wanting to take a position here. Lucky them. The risk has been largely taken out, and the stock is STILL dirt cheap.

    There's a whole "crop" of potential investors for this company now. And it will expand all the more markedly, when we go above $5, which will "justify" institutions piling in.

    Sit, and wait, and be rewarded. Imho.

3.37-0.02(-0.59%)Jul 1 4:00 PMEDT