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Rubicon Technology, Inc. Message Board

  • bot_feeder bot_feeder Oct 10, 2011 9:43 AM Flag

    I'm in

    I had hesitated investing in RBCN before because I focus a lot on enterprise value to gross margin ratio and by the numbers on Yahoo summary for these guys it is only like 3 or 4 whereas I consider a great buy to be when that ratio gets down to around 1 to 2.

    However, if you look at their quarterly balance sheets and add up the gross margins from the last 4 quarters it is far more than the 41 million that Yahoo shows on the summary.

    In fact based on that they have a very attractive EV/GM ratio.


    So let's look at the plusses for RBCN:

    1). attractive EV/GM ratio
    2). attractive PE ratio.
    3). attractive projected PE ratio
    4). world leader in large sapphire wafers, the leading edge substrate product for producing LED's. LED market is expected to grow a lot in the next 4 years
    5). I looked through one of their reports, I think it was their last 10K, and they indicate no legal issues that they feel present any sort of material threat to their financial condition


    Now it appears there may be a nasty downdip in the LED market temporarily. Well, these guys have a pretty solid net cash position so I would think they can ride out a downturn without a lot of difficulty. Could the stock drop a bunch more during such a downturn, youbetcha. If it does I will buy more RBCN stock.

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    • what's the deal with the big jump in diluted shares? close to like 10% increase. big time stock options awards?

    • I agree with you . It is far more likely that this stock will recover than to go down a couple of dollars. Look for it to double within 6 months

    • Good rational analysis. Great to see on a Board.

      Any other deep value plays you hold or are buying? I am convinced the market always has some value bargains, and these days it probably has more than usual.

      • 1 Reply to tk77mann
      • Seems like there are a lot of deep value stocks out there.

        My favorite tech is STM. Enterprise value to gross margin ratio of about 1 for one of the world's great semiconductor companies.

        Got a bunch of other techs, mostly semi eqt stocks, I expect there could be more rough waters but most have so much cash on hand they should be able to ride out any storm and when the sun comes out we should see these things skyrocket.

        I only got into techs the last couple months after noticing how they had crashed since midyear. Previously I was only in commodity stocks.

        In commodities my favorite is Sabina Gold and Silver (Canadian listed, in US you have to buy the pink sheet version). They were my biggest gainer that got me back close to even since the crash of 2008. Commodities have had a big drop lately though and that opens up some good buying opportunities.

        The other commodity area I am in is oil. Those seemed like good values but then they dropped a bunch so they should be even better values. My favorites are DVN and CHK. DVN is a large solid oil & gas producer predominately in North America with a superb balance sheet. CHK carries a fair amount of debt but they have an absolutely phenomenal portfolio of oil and gas properties in US, so they have huge potential upside.

        As another contrarian play, I own UEX, a Uranium stock. (also Canadian, need to buy the pink sheet) Has something like 80-90 million pounds of good grade Uranium in the ground in Athabasca, but the stock has been massacred due to the Fukushima slump, so the stock buys you Uranium in the ground for about 1.50 per pound. When Uranium was booming a couple years ago $10 per pound was more the norm for high grade deposits.

    • Sweet LOL

 
RBCN
0.6701+0.0201(+3.09%)10:04 AMEDT