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Hutchinson Technology Inc. Message Board

  • longtimefollower longtimefollower Jul 27, 2011 1:09 AM Flag

    The Street is starting to see the story.

    It's exciting. You could tell, as the questions progressed, that the tone of bullishness increased. By the time we got towards the end of the call, you could tell that some of the analysts were almost flabbergasted at how much things were improving. The sequential savings of $5, from cost reductions, in the current quarter, compared to the 6/30/11 quarter, seemed like "something new" to the one analyst. Obviously, if you factor in an adjusted $7.2 M loss in the quarter just ended, factor in $5 M in additional savings, and 5-10% (and probably closer to 10%) in additional unit shipments in the 9/30/11 quarter, it's pretty easy to see how HTCH has a decent chance of being close to a GAAP breakeven in the current quarter (probabably no worse than a couple million away).

    I was initially concerned that management "only" gave a unit shipment growth projection of 5-10% for the 9/30/11 quarter...but when they used the term "very safe" in being able to achieve that range, I would imagine that, unless the bottom falls out, we are going to see much closer to 10%, than 5%.

    I have no idea what the stock will do short term, but I can CLEARLY SENSE that the analysts are now seeing HTCH as a company in TURNAROUND mode, with increasing sales continued to be expected, significant cost reductions further expected...and a balance sheet that has just been significantly strengthened.

    With that in mind, we should NOT be selling for $3.40. We should be selling for no less than $4-5...and while it may not make the $4.00-4.75 target by end of July that I had previously set, I'm pretty convinced that we'll see $4-5 within the next several weeks, in any case.

    And there's always the possibility, if this stock comes into favor as a "turnaround play," that it could climb to the mid to upper single digits in a fairly short period of time.

    I love holding this stock at these prices. Why? The notion, with the "suddenly changed" fundamentals, that it is just going to break back below $3, and stay below $3, is pretty much absurd. Look at a long term chart.

    It's time for the "pall" to be lifted off this stock, and for people to start becoming EXCITED about what HTCH is up to. If that happens, the potential is ENORMOUS here.

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