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.
First, recall that I used the phrasing of "perhaps some involvement in the HPU or Holographic Processing Unit".
I recall reading some time back about how HIMX was working with MSFT on this as MSFT wanted the Hololens to standalone (not tethered to a PC). And, as HIMX provides the LCOS display and probably the display drivers, it would stand to reason that they needed to be somewhat involved in the HPU development.
I can't recall where I read this......but it was some time back. I wil have to reflect and search for the source. One thought is that it might be in the bill of materials from the Google Glass breakdown some time back which showed an HPU perhaps being from HIMX.
Let me think and search.......but I do think HIMX probably helped. Whether this means they get any revenue from this is further out as helping doesn't mean they have a financial stake in this as their involvement may have been associated it's helping to sell LCOS displays.
But, HIMX knew that MSFT and others were going to use the LCOS displays for AR and that means holograms.......so they have to have some knowledge of the HPU to develop their LCOS......or intimate LCOS knowledge was needed to develop the HPU.
I completely agree with jarhead.......as does history.
It takes a lot of shares to push a stock down......unless it is coming off a peak or high. And, letting the shares get to a high allows the big short to:
+ Short from a much higher level meaning their breakeven price is higher and easier to achieve
+ Shorting from a big peak also gets lots of traders who jump on this so the big short gets help pushing it down......after the have loaded up with shorts at the higher price
So, if the shorts breakeven point is around $9, getting HIMX up higher and then shorting it from there means that the big short now has a higher breakeven point of perhaps $10 or more.
The most recent example is when HIMX hit $12 on 29-March 2016. It only took a week or so for it to go from the low $10s to $12.......and then only 3 weeks to get back to the low $10's where it continued to drift lower. The only problem for the shorts here is that they did not cover (although some shorts probably did while other shorts took over their position as the total short count has not decreased until this last reporting period for last half of August 2016).
Note the bit about self contained (vs. room set) sensors. And, the Hololens in available for ordering so sales are coming. Note that HIMX should be associated with the LCOS displays, the WLO sensors and perhaps some involvement in the HPU or Holographic Processing Unit.
Bank of Japan and now USA Fed shows their cards.......and we have moderate volume in HIMX. And, it only takes moderate buying interest in HIMX to move the shares higher.
I suspect some of this buying is the big short covering. I also suspect we don't get much news until the Conference Call in the second week of November........and I support no pre-announcement PR unless needed so as to keep the shorts/manipulator so off-balance.
Analysts are currently conservative on HIMX as the average shown now for 3Q 2016 is $0.10 ($0.07 to $0.12 so some out of date or low balling) whereas HIMX Mgmt guided $0.10 to $0.12......and admitted to being somewhat conservative on the revenue side with 5% to 10% sequential growth over 2Q 2016. This 5% to 10% revenue growth is around the average revenue estimated at $217.7 million for 3Q 2016 and that is ~31.5% above 3Q 2015. So, HIMX will be showing really good sequential and year over year growth when they announce in early Nov 2016.
One other observation is that the revenue estimates for 3Q 2016 is $211.2 to $224.5 million. That means the low estimate is still around Mgmt guidance........but it is interesting that the low EPS estimate Nearly 40% below Mgmt guidance. Is this the influence of the big short.......and the big short being a HIMX analyst(s) as jarhead implies??????
I think it is more accurate to say that Chipbond is a fabricator who is involved in one of the finishing steps in HIMX IC fabrication. Gold bumping is finishing the termination/connection points of the various components/chips.
With the trading volume lower on HIMX yesterday, the shorts were able to take HIMX down at the end of the day....possibly hitting some sell stops along the way. But, even that ~$0.10 drop they took HMX down helps the shorts cover at a slightly lower price today. These things can happen when there is a lack of buying interest......which is what we have now.
The question is whether this lack of buying interest is real......or just a pause waiting to see what comes out of the Bank of Japan and USA Fed Meeting later this afternoon. But, as long as these are smaller moves, they mean more to the shorts who have lots of shares to cover and day traders. For longer term investors, this is a chance to position and then just wait for meaningful news and the upcoming Conference Call in early November as The very positive story with HIMX has not changed.
Note that the trailing P/E is still higher on HIMX which may concern some potential buyers who are learning about HIMX via Motley Fool and other sources. But, HIMX Mgmt guided for $0.10 to $0.12 EPS for 3Q 2016 which will compare to $0.01 in 3Q 2015 and 4Q 2015 was only $0.04 and if HIMX does another $0.10 to $0.12, the trailing P/E will drop significantly. That is why one should never look at the trailing P/E without also looking at the forward P/E and PEG.
I show 6637 contracts (663,700 shares) of the Sept 16 $5 options expiring today. That does not seem like a lot of volume for GNW.
If GNW closes below $5, the shares associated with these calls will not change hands.
It would seem you are inferring that if these do change hands, it will be because someone wants out????
See my post on the MXL MB for the link and quick comment.
MXL Mgmt did a great job of explaining the phasing out of their legacy analog and SOC business.......and then all the great things coming with ~25%/year revenue growth with some gross and net margin improvement. MXL could easily support a P/E expansion to 20 or more soon and then even higher later (see the P/E of 40+ in the high speed optical data interconnect companies). Come 2020, MXL could easily be a $40 to $50 stock.
It may be hard to find MXL in the $17's after their presentation at the Deutsche Bank conference today.
They did a good job explanation given the phasing out of their legacy analog and SOC business.......and then all the great things coming with the net being around 25%/year revenue growth with some gross and net margin improvement. MXL could easily support a P/E expansion to 20 or more soon and then even higher later (see the P/E of 40+ in the high speed optical data interconnect companies). Come 2020, MXL could easily be a $40 to $50 stock.
Hey jarhead and others,
There is good annualized returns, with decent downside protection, by buying HIMX here at $10.60 and selling covered calls for Jan 2017. In some cases, you can make over 15% by doing this.......which is over 40% annualized return.
Good move today........but I wouldn't expect much until they announce earnings and guidance in early November. The rapid phaseout in their analog channel stacking line is a near term headwind......and the purchase of assets from MIcrosemi and Broadcomm will take a bit to bear fruit.
But, for those of us who bought in the $9 range can be more patient.......and just make a bit by selling covered calls (which I have done in the past but have no current sold calls).
Watching the bond prices is a great way to access the market's view of GNW's cash flow and ability to pay its debt.....and the market says to concerns on GNW debt.
The bad news is that GNW will not be able to buy these up below par to save money. Sure would have been great if they could have bought these out some time back when they were selling at a discount.
Okay, we finally have some short covering.......after nearly 6 months of increasing short volume. There were around 1.5 million shorts covered which is around 7.5% of the total shorts.
And, if you plot the price next to the short volume........many of these shorts are losers. Note that we closed at $10.70 today.
Date: Short Vol Share Price
8/31/2016 18,421,782 $10.62
8/15/2016 19,924,150 $ 9.92
7/29/2016 19,885,631 $ 8.95
7/15/2016 19,037,417 $ 8.97
6/30/2016 16,663,722 $ 8.26
6/15/2016 15,321,398 $ 9.57
5/31/2016 14,152,914 $ 9.79
5/13/2016 12,422,571 $ 9.20
4/29/2016 10,471,121 $10.39
4/15/2016 8,216,198 $10.37
3/31/2016 5,421,896. $11.24
3/15/2016 3,900,424. $10.50
HIMX took out a lot of larger blocks of shares at the ask to finish at the daily high on stronger than typical volume. To me, it looked like the MM's were trying to hold HIMX back with blocks of 10,000, 15,000 and even 30,000 shares at the ask.......and they were all gobbled up.
HIMX presents this week at the Small and Mid Cap Investor's Conference in New York.
Short Update for last half of August 2016 should be out tonight or tomorrow after close. I'll go look for it.
Are the MM's going to let the nearly 8,000 $10 call options coming due this Friday finish in the money? If so, and these 800,000 shares get called away, could we see some of those whose shares get called, buy back into HIMX?
HIMX does have an investor's conference this week which could be helpful.......but at this point, what analyst is not aware of HIMX? The one on one meetings have to be helpful but it would seem the HIMX story is known.
Last Friday was hard to call. HIMX bottomed out early in the day whereas the overall market kept dropping throughout the day and close near the lows of the day.