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Silicom Ltd. Message Board

  • jdberwanger jdberwanger Apr 24, 2014 8:24 PM Flag


    Just like a blowoff top, this feels like a blowout bottom. I kind of wonder how much of todays volume was "fake" volume, trading back and forth by the market maker/hedgies. It's been my observation watching the tape for years that more recently stocks with reasonable valuations that gap down in big volume end up making a bottom very quickly if not even that same day. This has started happening over the last 12 to 18 months in particular. Two stocks recently off the top of my head that did this same thing are MHR and SFY. Also note for you guys trying to buy or get out of a particular stock on a volatile day, when the market makers/hedge funds are manipulating a stock and have a strangle hold they will go to lunch at 12:30 eastern time and you'll notice the pressure on the stock will go away almost always for an hour or so. Look at the price action today, it was pressed down until that time and then rallied for the next hour up $2.

    To think that the growth rate has gone from 50% down to 10 to 15% is not the case in my opinion. Think of what the company has going for it: Setac, Time Stamp, partnership with Intel, Smart Silc, cloud computing trends, internet traffic trends to just name a few. (CEO said time stamp product could very well be $10s of millions of revenue per year down the road. Look at the corporate presentation and they expect the same out of SETAC.

    Were Q4 sales possibly sped up? Maybe Silicom gave better pricing to move revenue into the 4th quarter given their tax rate was 10% roughly versus 15% in the first quarter? A couple of million dollars in orders on January 2nd versus December 31 would mean a 60 to 70% growth rate in Q4 and maybe a 40% growth rate in Q1.

    Short interest cut off date is tomorrow for month end April. Expect the stock to be up tomorrow as market makers/hedge funds cover some of their shorts or if they decide not to tomorrow look for short interest number of between 100k and 150k when end of April #s come out.

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    • Short numbers are out. 3/31 - 41k, 4/15 - 79k, 4/30 - 167k. I thought it might be 100 t0 150k on the number but Mr. Hedgie has been hard at work. Looks like his yelling "fire" in a crowded building did the job. This is a prime example of a low volume stock getting manipulated. Shaike has to get out there and do corporate presentations to attract some analysts and institutions. If we had more institutional support the yelling fire wouldn't have created a panic. Watch the short numbers, you will see the stock recover with the short interest numbers coming down. I know it won't happen but a power play right now by management would be a $ 5million stock buy back. If they have to discontinue the dividend so be it as we have no institutions to support the stock. A corporate buy back would be the next best thing. Long and strong for the next couple of years!

      • 2 Replies to jdberwanger
      • Your observations are right on. I believe that this thinly traded stock has been manipulated big time and still is. I wish they had split the stock in the 50's, 60's and 70's but they didn't. Although a split could have not prevented the manipulation but not having it has made the stock less liquid. The long term prospect of the company is potentially huge, I hope that they don't get bought out before it's time. (IMHO, long SILS, do your own DD).

      • I mostly agree jd. Even this dopey sounding poster who I have on ignore may have some association with them. However, there was another poster before earnings who I called out as having a new ID within a day or two who I almost certainly think was part of the game with the big boys. He disappeared as soon as I called him out, since, most likely, he knew that I was on to his bullying game and was calling a spade a spade.

        It may get worse before it gets better. The Russell is already in a correction, the Nasdaq never fully corrected but is still off it's highs and the S&P and Dow are still near all time highs.

        Sooner or later those almost have to correct at minimum and I don't know that the smaller stocks rise up as those are falling.

        I just hope the Russell isn't signaling the end of the bull market or the start of a stealth bear.

        The worldwide QE gest has gone on way too long and I don't see great evidence that things in the real economy are that much better. Don't get me wrong, they are much better than 2008-2009 but how much has the market been pumped up with easy money around the globe? Answer, a #$%$ load.

        Hopefully we are just looking at a much needed correction phase and the Q1 GDP is an inflection point but I do have my doubts. This weather excuse is lame, quite lame.

        Good luck. I remain quite long here but am long/short in my portfolio as I have been for some time.

    • Well said. We know that much manipulation goes on in the market. At one point today the spread was about One Dollar. Your observations seem to be valid and thoughtful. My guess is that we may go test today's low and then a recovery and base building phase will start. Not much has changed about the company except the stock price. Of course some technical "repair" will be necessary to the chart but the future should still be very bright.

    • I'm disappointed and amazed where the stock is but am extremely comfortable holding at these levels. We have a market multiple stock growing at much better than the market.

      • 2 Replies to jdberwanger
      • jdberwanger, I concur with you that SILC is a growth stock that trades like a value stock after the recent stock price haircut. At $46 with $7.50 cash + marketable securities per share on its debt-free balance sheet, SILC trades at a market multiple, even though sales and earnings are growing smartly. Silicom has multiple growth engines, and continues to occupy a "sweet spot" in the networking biz. CEO Orbach says all Silicom's product lines are performing as planned, and the long-term business plan is on track. So, I continue to hold my shares in spite of stock market volatility and investor fickleness, as Silicom executes its business plan.

      • From the Fool:
        Silicom historically doesn't provide specific forward guidance, but today's drop still makes little sense considering it performed marginally better than Wall Street had hoped. However, note that Silicom absolutely crushed expectations with its fourth-quarter report three months ago, so the market might have been anticipating yet another huge beat this time. Still, with shares now priced at a reasonable 15 times next year's expected earnings, I think the pullback could represent a perfect buying opportunity for patient long-term investors.

27.50-0.12(-0.43%)Nov 27 1:00 PMEST