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eMagin Corp. Message Board

  • stockresearch555 stockresearch555 Apr 24, 2013 10:02 AM Flag

    EMAN - Low risk, High Potential Return -- Part 1

    A couple of weeks ago, I posted my first note on this board entitled “It’s Time” and described how I thought the first quarter will not only be at least as good as what the company forecast, but that it could be the first in a string of strong quarterly results.

    Now I am telling everyone that I believe the stock’s downside risk is roughly 5%-10% and the upside potential over the next 6-12 months could easily be more than 100%. First, lets talk about the downside: I think the stock’s downside is about $2.90-3.00 because 1) that is roughly the level it fell to over the past several quarters as the company reported bad news (missed estimates due to machine problems), and 2) that is the level I think the company will resume the buyback program. So, even if a negative issue surfaces on the 1Q EPS call (like more machine problems early in 2Q), I doubt there will be much investor disappointment because the current stock price tells you hardly anyone believes management has corrected the problem anyway. At roughly $3.20, the stock tells me there are very few, if any, expectations for this company. If there is some bad news, most investors will simply say/think “I told you so”, but I doubt the stock will have a bad sell off.

    Now the upside: Just think how high the stock can go if 1) they make or exceed 1Q projections (remember, they gave guidance with only 3 weeks left in the quarter), 2) they say the machine continues to work fine/fast early in 2Q, 3) they say the new machine should be optimized in the next 3-6 months, 4) they announce an EVF order or at least continue to say it “could ship as early as August,” 4) they provide 2Q revenue guidance (they usually do NOT provide quarterly guidance) of $9.5mm or more, or 5) make any other positive announcements. Any one of the above could move the stock materially higher, and a couple of them could move it to $6-$7 in a heartbeat. ... continued on next post

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    • Yeah,
      agreed! We just need some coin to hit the stock now, Management needs to begin speaking to shareholders
      between Q's This type of courtship was ideal during the 1950's but not many suitors would continue to hang
      if eman is not taking care of business on date night/or at home.

    • Good Posts StockResearch 555,
      they have summed up the State of EMAN very well.
      You Write very good. I am going to try and Combine Your Posts in this Reply for ease of Reading . ???
      It's Time

      OK people, listen up.

      I think the time is right to establish or increase positions in EMAN. Anyone reading this note likely knows the two key issues with EMAN’s stock, namely 1) the start-stop-start-stop production issues of the relatively new machine and the resulting inconsistent quarterly reports and deterioration of management’s credibility, and 2) not having yet signed an EVF contract, which could provide significant financial upside.

      Nevertheless, I believe EMAN is much, much closer to resolving both of these issues. Of course, comments on the next two calls will give us much more information. With regard to 1Q projections, remember that the CFO provided the $8.5mm in revenue guidance on March 11 – with only a few weeks left in the quarter. So, he pretty much knows what the quarterly number is likely to be, and hopefully, given the misses in the past two quarters, he was conservative. I feel very comfortable with 1Q estimates.

      In any event, I believe the current depressed stock price reflects these two concerns, and consequently, has minimal downside and significant upside. And, when we get good news on an EVF contract, or news the new machine continues to ramp to optimization, or something else, the stock could be at $5 in a couple of days – just look back over the past two years and look at the spikes and how quick they were. If you wait till the good news gets here, you could miss 50%. Just take a look at the last quarter – about 7 or 8 trading days before the quarterly report, the stock rose from about $3.20 to about $4.10 – in anticipation of a good quarter. Even though it was a bad quarter, I have confidence in 1Q’s numbers, and the stock could m

      • 1 Reply to twelfth_rock
      • I gave it a shot............. last part from IT's Time 2nd Post.. on 4/10/13
        Obviously, These Shared Opinions are Not contributing to Me getting my Nickles filled. lol
        ..... I have confidence in 1Q’s numbers, and the stock could move up again in anticipation.

        Bottom line, in my opinion, I think 1Q will finally be the first of many quarters of solid/strong/on track numbers.

        Probably NOT due to poor technology -- I think the samples provided to mfgr met their specs. Might be becasue EMAN is a very small company and the likely huge camera company is a little nervous EMAN would not be able to supply a substantial quantity, particularly given the production glitches EMAN has had over past two quarters (they may have been listeneing to the calls). Nevertheless, I think the company will in fact get an order sometime in the next few months -- hopefully soon. Regarding the stock, I am amazed anyone is selling so close to what should be a solid/on track quarter -- why not wait a month!. maybe, they just do not like the stock market at new highs every day.

2.48-0.03(-1.00%)Aug 26 4:00 PMEDT