...I hate going into earnings with an overbought condition. There was complete overreaction to the downside as soon as the market opened. The good news is that as a result of the drop this morning, the overbought condition has been quickly reversed. Sales were higher than expected. The earnings were impacted by the temporary lower sales at EBTEC, the ramping up of the Trent 900 program and moving costs associated with going to the larger facility. All of those earnings hits are temporary.
We only have to wait until the end of April for Q1 results. Q1 ends March 30th so the quarter is almost complete anyway.
The 2 main drivers for an instant price spike will be the Pratt announcement which Pagano is still waiting on, and new info regarding a "new overseas client engine producer that we're pursuing." Q2 should also be getting close to the Trent 900 program achieving full-scale rampup which will improve margins and the possible sale of the Plainview facility.
One phenomenon as the market continues going higher is investors will start flocking to undervalued small caps. I have seen this repeatedly during bull markets. It won't take much momo to make EDAC spike really high. We started to see it in the past couple of weeks but imo, you ain't seen nothing yet. As long as the market continues going higher, eventually the P/E here should rise to 20 which will take us to the $20 range. There is still plenty of good news to come and the real sales growth hasn't even started yet.
It is only oberbought when the gunslingers drive the price up for 2 days expecting something on the CC and don't get exactly what they want and run for the exit driving the price back down to virtually the same price of 4 days ago. $15.50 today and $15.48 4 days ago. Much ado about nothing. Its like going out and getting drunk and then having a big hangover to sleep off after. Buying at this level now is probably a safer time than 4 days ago because the news that was perceived to be negative has been sold off to the $15.50 current level and that is where the stock was before the news, so it might be a support level now.
I can agree that this stock is worth $20+. But trading history shows the opposite. Next earnings will be in 2 months. Before that, this stock may slip to less than 13. Dont fight against the market.The market is smarter than all of us.