What are the chances the BG and/or MM's are just selling shares back and forth to increase volume and influence the share weighted technicals? How can so many shares get traded........as who are the sellers? I can understand the buyers as they know HIMX is doing well. But, who are these sellers at this point........unless the buyer and seller are the same.......just using different accounts to 'manage' the share weighted technicals?
Out at the driving range working on my swing and I thought of two additional items Wu could consider to minimize the games being played with HIMX share price:
1) pre-announce 2017 dividend......as a percentage of 2016 earnings. Basically say the 2017 dividend will be 75% of 2016 earnings......and since HIMX should have 3 quarters reported and guided for the 4th quarter, this would basically set the dividend at around $0.30/share or a bit over 3% of current $9 share price. But, to be safe, Wu should only give the percentage.
2) State that HIMX is considering paying the 2017 dividend with shares (percentage of shares would be paid in cash) and that HIMX would acquire these shares (again around 3% of the total 175 million shares outstanding or just over 5 million shares) on the open market on weakness.
= If done right and purchased on weakness, they could actually pay out a higher dividend depending as they could get shares cheaper........and use cash on the balance sheet to do this knowing this cash would otherwise be paid as a dividend.
= Anyone wanting cash could simple sell the shares when they wanted......but the shorts would have to pony up shares or cash to buy shares
But, Wu should certainly state that they are referring suspect trading patterns and even analyst news which doesn't seem correct to the SEC to be checked out. The innocent have nothing to fear.
Really, the only thing I would want is:
+ Public acknowledgement that there may be some 'trading irregularities'.......and that HIMX has asked the SEC to investigate
+ Public disclosure that there is no falloff in WLO/LCOS sales from quarter to quarter......and none expected. They don't have to mention any names......only sales volume.
= Bonus if they mention that the news on Hololens doesn't seem valid as MSFT has widened sales of these to various additional countries as per the recent MSFT PR on Hololens
+ Some disclosure of current LCOS/WLO capacity, changes in capacity planned, etc. along with update on the new Fab plant to go along with past/current/planned future sales levels.......again to show that these sales are still increasing and it is more than just MSFT Hololens
= Bonus for more disclosure on VR sales and associated products (display drivers, timing controllers, etc.)
Actually, the NFL is behind college football as the Standord QB (was Hogan in 2015) was using these last year and his completion percentage and TD to Int ratio improved with the use of VR. Several other college and pro QB's were supposedly using these all due to a Stanford kicker and QB who took a class on Artificial Intelligence at Stanford and then partnered with the Stanford professor to develop a company which offers this product/service (use GoPro cameras to film the scout team running the oppositions defense).
The company is named STIRVR (stands for Sports Training in VR) and you can Google that to learn more. You can also Google Stanford Football VR to get various articles about this. The Mercury News article is pretty good.
Lastly, Fox Sports has broadcast several football games this season in VR. I watched the OU and Texas game two weekends ago and you had your choice to sit in the press box, the 50 years line, either end zone or move along the line of scrimmage...and you could change vantage points when you wanted When you looked down, you saw a table of stats.
So, VR is doing well and these other than gaming uses need to continue to create a larger than gaming only user market. I also use my Samsung Gear VR headset ($79 item which uses your Samsung phone (Galaxy 6 in my case) with Google's Streetview to view the Eiffel Tower, Roman Colisium, etc. as Google has mapped nearly all streets in the world and various other items of interest (beaches, iconic hikes, etc.) and you can view them with VR.
ST is Stock Twits which is a free app on either iOS or Android.......and which works a lot like Twitter.
Your posts are limited in length, but you can post links and photos (chart screen shots are common) which do not count against your text characters.
Stock Twits are worth monitoring for the links to articles.......but the shorter length of posts limit your ability to post longer or more than one thought.
Has anyone been using other message boards? I should go to Investor's Village to see if the board there is active.
Yahoo has really ruined this board and their stock charts which now only work for 1 and 5 day durations. I wonder if this was intentional and an effort to drive away eyeballs due to the sale of Yahoo to Verizon. Heck, I wonder if Verizon is aware of how many eyeballs Yahoo has lost with their Finance sector.
If you read the full article (I found it on Seeking Alpha), there are many customer use cases including:
+ Lowe's Home Improvement
+ a University
+ European elevator company
That was my take on today's action also. It was interesting that the short did not try to take HIMX down as that may have caused them to get even more short.......and I think they want to mostly be covered (at least through options) before the HIMX 3Q 2016 CC.
Wu should simply comment in the next earnings call:
+ We know there is some shorts who are adding volatility to the share price and we are asking the SEC to investigate to ensure there is no illegal manipulation.
+ He should preface his answer to specific analysts with "I don't think you really understand HIMX properly so I am reluctant to answer your question for fear you might not understand it properly"
In both of these, he gets a jab in......but makes no real accusations but does put them on notice.
What do you make of today's trading? After the decline right at the open due to the Northland note, the stock traded over 5 million shares and mostly flat price wise. That would indicate to me that the shorts covered today.......as their time to cover before earnings grows shorter each day.
What is you take on today's trading action?
We should not forget the value of the dividend in calculating a true value for HIMX. If HIMX continues to pay ~70% of prior year's earnings as a dividend, shareholders can expect:
+ $0.28 to $0.30/share in July 2017 for FY2016 EPS of $0.42/share
+ $0.38 to $0.40/share in July 2018 for FY2017 EPS of $0.55/share
+ $0.49 to $0.50/share in July 2019 for FY2018 EPS of $0.70/share
$$1.15 to $1.20/share over 3 years which is ~13.5% total return on shares bought at today's $8.64 share price
Anyone read about Microsoft's 26-Oct 2016 NYC event is all about? From Seeking Alpha:
Officially: "To see what's next for Windows 10.
"While speculation on what Microsoft (MSFT) could be planning for the event ranges from developments involving HoloLens, Xbox, Project Scorpio, Windows PCs and Surface to purely OEM hardware and software announcements, it wouldn't be surprising if a splashy disclosure or two were made given what observers have come to expect from major technology company events.
FY 2017 consensus is $0.55 with estimates ranging from $0.39 to $0.75 and is 31% increase over the $0.42 expected for FY2016. So, a FY2018 EPS of $0.70 would require growth of 27%......which seems reasonable considering they will have their LCOS/WLO Fab plant in full operation for the entire 2018 vs. limited output only in 4Q 2017. And, AR/VR should be maturing and the public buying the better products.
Revenue estimates for FY2017 averages $956.2 million with individual estimates ranging from $803.5 to $1,060 million which is an 16.6% increase over the $819.7 million estimated for FY2016. Assuming that the new Fab plant adds $100 million in FY2018 revenue at a reasonable 40% net margin, that would add $0.22/share in EPS. If revenue and/or margins are higher, EPS really explodes.
With EPS growth of 27+%, the P/E should be at least 25 to 30 and thus end FY2018 at $17.50 to $21 or higher (depending upon 2019 estimates and acceptance of AR/VR/MR products and HIMX margins on their products).
The real key is that HIMX needs to keep the rest of the business steady with some innovations and their already close connections to China, Korean and Taiwanese manufacturers.
By the way, the call option buyers generally look to double their investment so most are thinking GNW will be $6.50 to $8.00 in March 2017..........which is after their:
+ 3Q 2016 report in Nov 2016
+ 4Q and FY2016 report in Feb 2017
All the analyst recommendations are not worth the price of toilet paper. Where were these analysts when GNW was $7 and on its way to $2? They didn't have a clue then and don't have a clue now.
Well, maybe they do have a clue and am trying to scare everyone out of GNW so they can buy.
What a smart shareholder should do is look at the price of $5.50, $6 and $7 call options are. Who is selling today at $5.16 when they could get:
+ $0.68 for the Mar 2017 $5.50 calls netting you $6.18 in March 2017 (20% gain) while providing 13% of downside protection
+ $0.52 for the Mar 2017 $6 calls netting you $6.52 in March 2017 (26% gain) while providing 10% of downside protection
+ $0.29 for the Mar 2017 $7 calls netting you $7.29 in March 2017 (41% gain) while providing 5.6% of downside protection
MXL has also stopped pre-announcing as they did not last quarter and do not appear to be this quarter.
Best read on MXL is their Investor's Conference transcript on Seeking Alpha. The date corresponded to a turnaround in share price direction as they laid out their plans for the future. Backhaul is going to be a huge driver for them outside of their digital set top boxes, etc.
See also bullish article on HIMX by Motely Fool on the Yahoo HIMX page.
Slowly but surely word is getting out. When HIMX reports 5% to 10% quarter over quarter and 30% year over year revenue gains and $0.10 to $0.12 in EPS as compared to $0.01 in 3Q 2015, more people will jump on board.
Good software sells hardware.
Case Western Reserve University said on Thursday the HoloAnatomy app for Microsoft’s HoloLens augmented reality (AR) headset landed first place for the immersive virtual reality and augmented reality category during the 2016 Jackson Hole Wildlife Film Festival Science Media Awards competition.
The HoloAnatomy app enables viewers to examine the organs of a body at their own pace and from any perspective. This is a step up from dissecting dead tissue and viewing 2D illustrations in medical books, transforming medical education using a $3,000 AR-based headset. Microsoft’s device projects holographic objects into the user’s field of view, mixing virtual with physical and essentially enhancing our learning of the human body.
For instance, using the HoloAnatomy app, viewers can walk around a holographic human body standing in the middle of the room with its arms spread out. The body does not have skin, allowing viewers to see the muscles, arteries, and veins. Step in a little closer and viewers can see the bones and organs underneath, depending on how close they move to the body. Thus, wearers can examine the heart, the lungs, the spine, and so on using footsteps.
“The HoloLens is absolutely the most amazing piece of technology,” said Mark Griswold, faculty director for Case Western Reserve’s Interactive Commons. “Within five seconds, they realize that the world had changed. It was immediate realization that this is something exciting and we have to be a part of this.
Some great option values on GNW. If you buy GNW now at $4.94, you can sell covered calls for Nov 2018 and get over $0.50 for the $5's (net $5.50 with 10% downside protection) and around $0.31 for the $5.50's.
I suspect the option premiums are higher as this would be after GNW reports their 3Q 2016 earnings.
I may have to buy some more shares and do this as I don't really want to lose the shares I have now.
Very strange price action indeed. Yesterday was a big up day for the market after the Fed decided not to raise the Fed Funds rate and HIMX trades down most of the day and only closes up a penny on lighter volume (1.215 million shares).
Today, while the market is down modestly, HIMX is up and climbing having done over a million shares already.
I do see different MM's leading the action today.......and recently. Usually it is NSDQ leading on the bid and ask. Today, I see batx so something sure could be up.
I'll have to look to see what the option action is........and I wonder how the big short fits into this. I think we should get the first half of Sept shoft volume early next week (perhaps Monday after close??).
Good upstream thinking but.........the data transfer and switch companies have already been run up quite a bit. The new thing is 100 GB switches within the server farms and there are a lot of companies in this game......but most are trading near their 52 week highs.
The other, somewhat overlooked, area is the backhaul which is from the cell towers back to where there is fiber. This is associated with the huge growth in wireless data such as data on phones and wireless devices. And, if you notice, the cell phone service companies (not the cell phone manufacturers) are offering higher data limits......or removing the monthly limits altogether. So, there is a huge growth in data going from the cell phone towers back/into the optical fibers and sometimes referred to as 'backhaul'.
A lot also depends upon the other product lines the various companies are involved in as some are quite broad (also offer data switching on backhaul and such as MXL) and some are more 'pure' plays with just data switches like OCLR. Others might be MLNX, MSCC (who have quite broad product line) and MTSI (if I recall the various symbols correctly).
Of all of these, the only one I would recommend at its current price is MXL which has a very reasonable P/E and great growth ahead of it.
But, these sectors have been Wall Street darlings this year and many are up nicely as compared to the indexes.
Thanks glhsken.......and think about the extreme shrinkage in the % of shares when the shorts cover.
I do wonder as institutions do sometimes lend out shares for income so some of those shares may be shorted. But, the additional 18.5 million shares now short does greatly expand the float.......and covering these will not be easy as it will shrink the float substantially (especially as a percentage of short related float).
So, I do think the big short has to convince others to short so they can cover without a big squeeze.