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Hutchinson Technology Inc. Message Board

  • longtimefollower longtimefollower Mar 7, 2012 3:04 PM Flag

    Press release is good news.

    Decent participation in the offering. With guidance of free cash flow positive for the year, and my expectations for a debt (net of cash) to equity ratio of somewhere around 50% at the end of this fiscal year, and expectations that current assets to current liabilities will be somewhere around 3 to 1 at the end of this fiscal year, and the fact that there will be no significant debt maturities until 2015, it really puzzles me why we are still selling for like 30% of future adjusted book value (factoring in a reasonable imputed issuance of the warrants)

    The fact of the matter is, with the MATERIAL additional breathing room this buys the company, the stock is worth a hell of a lot more than $2, imho. But I guess if you want to believe that SSD's are going to cause immediate and continuing ongoing revenue declines (NOT what industry analysts are calling for), then, like the bookstore sellers and buggywhip makers, no price is low enough for you.

    Personally, I fully expect to make a killing here, over the next 6-18 months, even if my average cost is 50% higher than current prices.

    Frankly, I consider the stock a "better buy" at $2.10, versus the $1.50 we were trading at, a few months back, simply because there was dramatically more uncertainty from Thailand, and refinance risk to boot, which, in both cases, I expect to be fully resolved.

    I consider the stock a "super strong" buy. And my confidence level is exceedingly high, for those buying at these levels.

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    • I agree with you, dude. Although they had to extend the open period due to the lack of registration statement effectiveness, we know that the participation was quite good. Becasue there's no liquidity event anywhere on the horizon for at least several years, I would suspect that the MMs would come to the realization that the "easy money" is to the upside, at least for the time being.

      Good luck.

    • The rare and coveted "super strong buy" rating from LT. Let me ask you this: at these prices, and given the relative opportunity costs, do you buy HTCH or TA? Assuming you've only got cash for a new position in one of them. Also, assuming a buyer already has positions in both at prices mostly higher than current. Or maybe the recent breakdown in COBR is an even better opportunity than either of those?

      • 1 Reply to tgagrippa
      • I certainly wouldn't be choosing COBR over HTCH or TA, unless COBR dropped to $3.00-3.25, perhaps. (Unlikely.)

        As for HTCH vs. TA, longer term, I find the value in HTCH more attractive. Shorter term, I'm guessing TA may outperform, but that is really based simply upon my assumption that the Street will "revalue" TA, after the impending earnings report comes out. But that's not a game that is easy to play, and I could easily be wrong in these kind of short term prognostications.

        If you believe in the 3-5 year "staying power" of the HDD, Hutch is an absolute spectacular buy, at this point (assuming they get the refi off as expected).

 
HTCH
3.49-0.01(-0.29%)Jan 30 4:00 PMEST

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