AXTI is like the biggest buzzkill ever. Even though I sold, I like to check up on it every now and then. This stock is just stuck in the mud. Goes between 2.75-2.95 all the time. It may have excellent numbers, but it's like watching paint dry and the market is totally disinterested. Maybe next year it will finally make it to 2.97!!!! YAY!!
It is closely tied to the GaAs market. While I can't say it moves in tandem, it does have a high correlation. As you may know, GaAs is a by product of the Aluminum manufacturing process. It is not terribly difficult to produced raw GaAs in terms of garnering the capital/equipment to do so. So when GaAs prices take off, many unstable producers enter the market and flood supply. As prices drop, they leave the market. It is a cycle the repeats itself many times over the years. AXTI has, wisely, positioned itself as a low cost producer with certain supply (via its JV's), so over time, it will survive these cycles while many others will not.
As GaAs, both semi-insulating (chips) and simi-conducting (LEDS) is in greater demand, one would naturally think the increasing demand, if volatile in shorter time periods, would bode well for AXTI. If you have long term money, a few shares of AXTI will pay off over time. They've announced a share buyback (OK, it is small and they can't buy until May) but it is a buy back nonetheless, so we should see the denominator in the PPS drop or at least stabalize (offset by management awards).
But, in the final analysis, I think one must conclude that AXTI is in a commodity business and as the commodity in question goes, so goes AXTI.
Now, there are a number of exceptions to this theme. It could be that AXTI is ripe to be acquired so we could wake up one morning and see a $7 p/s bid in the news. Also, the whole world of solar has great potential.