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Mentor Graphics Corp. Message Board

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  • stockmeister103 stockmeister103 Jun 16, 2011 6:55 AM Flag

    Time for a 5-7 percent gain

    Couple of things. I didnt buy MENT because Icahn got in. I bought way before him.

    Next, as I mentioned it a number of times Q2 is ALWAYS a slow qtr. Always! That's how their biz works. Q3 and Q4 will be very very strong. I expect them to beat the lowered Q2 estimates AND also raise guidance for the full year.

    Next, MENT will be buying back shares from the open market. Although not much, it should be sufficient enough to stop further slide. Share buyback will also improve the EPS. Which is another reason why they will raise the full year guidance.

    Next, new board will start cutting costs, if they haven't already. Icahn won all three nominations and he will make them work for his money. That's plan B. Plan A is still to try and sell the company. My guess is the new board will start evaluating each business unit within MENT and start cutting unnecessary costs to make them more attractive to a potential buyer. They will pursue Plan A very aggressively.

    And finally. No, I don't think Icahn will be selling his shares at these ridiculous prices. No reason to. If he does his position on the board will become weak and when it goes to voting on either plan he wouldn't have enough votes. Icahn and Cassablanca own 20% of MENT. That's not only a strong position for them but also a nightmare for the management. Unlike the past 15 years of slacking they will be watched upon by the new board. The new board will make them accountable for the sake of their own credibility.

    All-in-all, I am happy how MENT held up while the rest of the markets are correcting. On the technical analysis, MACD is reversing. Yesterday's volume spike suggests a reversal day. It is trading near 200 DMA, which should provide ample support.

    This is a $20+ stock. And dont forget the new convertible debt they issued recently warrants the pps conversion price at $20.43. Being patient with it will reward you.

    Good Luck!!!

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