I give credit where credit is due. What Mungee published helped raise awareness of and catalyze growth chasing in GTAT. I am very confident that if the revenue is between $600 - $800 million, as forecast, we are going on a significant run.
This is a strange experience for me. I've never been on a growth chaser before. It sort of feels like coed college, after having spent 4 years at an all boy Catholic high school!
Your post is short of the most salient facts and analysis. I feel you are too parochial in characterizing the US economy in a global world. Especially from the perspective of jobs and what this means to our economy.
I've recently realized that growing global aggregate demand can make up for sluggish domestic US aggregate demand. Our companies will continue to do extremely well as middles classes rise in other societies. Mobile devices and work stations will continue to sell. Ironically, in spite of this prosperity, 14% of Americans in low wage jobs are in danger of being socioeconomically locked...as there won't be the traditional negative impact of sluggish domestic demand compelling action here.
Additionally, emerging North American domestic energy & 3D printing is reinvigorating a US industrial base that already produces 22% of global manufacturing GDP. Our corporations dominate every supply chain on the planet. We're more than ready to ride the next waves of macroeconomic industrial development.
And there are such waves. Social, mobile, 3D printing, big data, alternate energy, cloud computing, nanotechnology, blue gold water development, and even statistical optimization science are powering economies. Last but not least, we've been in a secular bear since 1999, only recently pulling above those highs. We're on the cusp of a secular bull.
Mind you, given high debt to GDP ratios, we're also in an era of low interest rates. Growth may be tempered, but expect higher PEs. Nevertheless, we will grow and, as always, there will be alpha to be found.
Speaking of alpha, connect the dots with GTAT in the context of what I just stated. All the best.
DJ, basically your scenario might be put to the test if sapphire demand fails, which can only realistically happen if sapphire as a technology fails. And even then, you assume that other GTAT product lines couldn't extend runway. You also assume that private equity, ibanks, and investment angels couldn't help raise a round or two of funding.
I find it hard to believe Apple would risk even $587 million on a technology that won't succeed. Suffice it to say, if the technology works, it will generate demand and, hence, revenue. I think you know the implications of growth and cash flow...and the leverage this creates in servicing debt, no pun intended.
I own both. I am doing nicely with GTAT & GLW. I don't see a zero sum game here.
I have a $25k basis in GLW. I predict with very high confidence market beating returns in the years to come. GLW is the epitome of a value investment.
GTAT is a growth chaser. I now have a $20k basis here. As the GTAT story unfolds, it's getting more positive. If indeed Apple adopts sapphire significantly, GTAT will be a serious multi-bagger. My 1st GTAT $5k position has returned 175% in 18 months. I recently added the other $15k, so I am now averaged in at $7.78.
Yes, I can lose it all if sapphire fails. But I think the odds are that sapphire will be a decent market. It will give GTAT more runway with which to await solar markets rising again. Meanwhile, I'll keep making money in GLW.
I'm long GLW & GTAT.
Sounds good to me. Based on our earlier conversations, I'm thinking of doing the same. I can't see going wrong having $17 shares put on a $10.20 price. In fact, you can use the premium from selling the put if the price dips below $10.20.
Given that I am overall bullish, this seems like the perfect hedge. I've been too tied up at work to actually put this together, no pun intended. My brokerage doesn't actually allow options trading except through the phone, so it's a logistics issue.
The main thing is to be disciplined with the premium. Otherwise I think your strategy is correct here. The outlier is if GTAT really tanks...which I just don't see happening...or at least it's worth the risk.
Can an analogy be drawn here to companies like SalesForce, WorkDay, or ServiceNow? These companies make no profit, yet ignited long growth chasing cycles on revenue growth and connect-the-dots hype. Furthermore, none of these companies actually innovated, but rather came up with a new software as a service sales model...still facing HUGE competition from Oracle, IBM, SAP, & Microsoft.
I understand GTAT is in different markets. But GTAT seems to have a deeper comparative moat and less competition. In screens, it's GTAT & GLW. In solar, it's AMAT and who else? GTAT seems well placed at the start of the supply chain in sapphire & solar.
Again, if revenue grows significantly, it could ignite a growth chaser and, sure, the associated hype. This dynamic has been in vogue for some time. I conceded defeat with the aforementioned companies and Amazon here. I see GTAT as an opportunity to ride the same dynamic...with a chance that unlike the said SAAS companies, GTAT will probably be profitable & stand the test of time if solar & sapphire markets materialize.
Most of my portfolio is in value investments. But GTAT is worth a chase. I have a $20k basis averaged at $7.8, so I'm long & strong. I also have a $25k basis in GLW, for what it's worth. I have plenty of dry powder for both...although right now I admit I am prepared to weight more in GTAT, something I wasn't ready to do several months ago.
The chase is on. Fingers crossed.
Other board members here can attest to my skepticism all along. You can check my early debate with Nania and his/her alter egos on MF. I've maintained from the start that GTAT is a function of deduction based on core assumptions.
Up to now, all my speculative investments of this kind have failed. This is why I started with a $5k basis. When the Apple deal materialized, as luck would have it, the simple deduction I made on solar markets suddenly applied to the sapphire markets. And as the story evolves, it's a stronger and stronger story, validating the subsequent theses on GTAT by posters here...which is why I upped my basis by another $15k.
If we get the projected $600 - $800 million in revenue at the end of the month...then we will have a more traditional inductive based rationale for projecting growth. Cash flow is cash flow, especially in a context of growth for an emerging company in multiple emerging markets.
Once again, consider software as a service companies like SalesForce, WorkDay, and ServiceNow. No profits. Hardly a business moat amidst monster competitors. In contrast, GTAT is deep in a supply chain of commodity production, with not a lot of competition.
It's about revenue growth now. If this is shown, GTAT should fly high.
I readily admit to the luck factor with GTAT. I actually invested in them as a deep in the supply chain solar play. My thesis was that if solar markets did materialize, GTAT would benefit.
Luck worked out with the sapphire production acquisition and the ensuing Apple deal. Somebody had a vision here and was correct. Every now and then, it's worth pursuing such a stock. Fingers crossed for us longs.
Dude, let him emote. Actually, he deserves it for a big bet gone right & offering it to others. I've made money from his advice. Besides, you don't know what he is like in real life.
And like I said, you keep stoking the war of words. Let's just get on with a serious discussion. You've offered some solid posts, so keep it up. I like hearing the range of commentary, which can only help us make better decisions and $$$.
With that, if sapphire does make it significantly onto Apple products...you just might regret not getting in right now. I'm at a $7.8 average share price on a $20k basis. I think the bet before us is worth the gamble.
I disagree. There is a strong culture of pumping stocks, especially in chasing growth without real earnings, whereupon an inevitable correction fleeces retail bag holders. This absolutely is in line with the collusion dynamic I described.
And in the case of companies like SalesForce, WorkDay, and even Amazon, it can go on for a long time. I have more than enough data corroborating this. It's also my experience, having worked in silicon valley and wall street ecosystems for 20+ years now.
It leaves a bad taste. Bill Gates and Larry Ellison did not pull money until their companies where a combination of balanced growth & profit. Okay, I'm also off to my day job. Morning coffee is over.
Yes you are crazy. Why? Because you probably are from the Balkans!
Just kidding. I'm also long GTAT. And I share your hopes for the outcome you stated. Fingers crossed.
SA is the total package. I've gotten so much value out of SA on a range of stocks. Yahoo Finance is my preferred portfolio tracking tool, complemented by Fast Graphs. But this is one of the rare Yahoo chat boards of value.
By the way, the articles catalyzed by Matt on SA condense everything discussed here very nicely. You all ultimately moved the market through SA, not Yahoo Finance. Again, I'm extolling this discussion overall, but on sheer feature basis alone, you can't post as effectively as on SA...with its charts, graphs, and specific articles.
This is apt for important brain storming. But when pushing a thesis, it resonates better when backed by a comprehensive and concise SA article. And frankly, it invites a wider and more varied community of critics.
Any good scientist wants their thesis held against the strongest criticism.
This speaks loudest. I believe Vanguard also took a significant position. Heck, the fact that an otherwise conservative value investor like me also is in GTAT resonates.
Just kidding. My only negative in the whole picture so far is insider compensation & selling. It doesn't obviate the positives. Heck, the CEO of SalesForce hasn't hurt his company's growth by cashing in $500 million so far. But given that SalesForce makes no profit and is on course for a severe correction one day, well, I hope you see my point.
I prefer that leaders lead by example in having faith in their company by holding and even buying. I don't want to get too far off topic, but it's a problem with many companies in the US.
Zacks by the way is typical of the combination of market manipulation, ignorance, and legal but unethical theft that involves a collusion of analysts, actively managed funds, ibanks, hedge funds, private equity, and venture capital. Nuff said. As is obvious, do your own research, analysis, and decision making...using the cynicism of institutional interests to your advantage.
Clark, I have little respect for MF now, withstanding that they actually turned me onto GTAT as a "hidden gem". I even post there occasionally, but I no longer pay for membership. My observation is that MF has become too much of a marketing gimmick, where they commentary spans the spectrum of opinion.
The worst is when they advertise an up and coming industry or stock, like cloud computing. You have to listen to cult or personality praise for the founders for an hour, before they get to the point. And with a flourish worthy of late night advertising, they promote MF subscriptions.
SA is for me by far the best financial site. It's not perfect, but it is very self policing. By and large, the comments on any topic soft, produce, and approximate the truth.
Can't we all get along.
I'll say it again: even some of the stalwarts on this board in danger of compromising themselves. If you sling mud, it will stick. Even on a chat board. Especially when you're not anonymous.
Everything you do virtually lives forever. Your phone conversations. All you online activity. Trust me, I did wrote so called "recipient-donor" algorithms that correlate phone to online to tv activity. You would be shocked how you can be tracked, categorized, and ultimately judged...especially potential employers.
I appreciate this board. It's made me money. Like I said, it's very rare for a Yahoo Finance board to produce even 1 piece of useful data, never mind a working thesis that has made me good money. But I respectfully suggest some fellow travelers temper themselves...for their own sake.
All the best friends. Thanks for all the thoughts, tips, and debate. Let's keep it coming.
There are no fundamentals, at least not in the classic value investing sense. GTAT is an emergent company, subject to the kind of deductive analysis inherent in these discussions. Even non-GAAP creativity can't gloss this over.
That's why I pin my hopes on GTAT materials scientists having created a sapphire laminate that is compelling Apple to significantly use it in i-products. It's given GTAT a $500 million extension. Apple is investing significantly to develop an on demand sapphire supply chain. Many institutions have recently accumulated. These are compelling enough signals for me to take a chance.
Again, it's not about fundamentals, not when there isn't even yet a proven product. Fine. To come full circle, we're left with speculative deduction...which is something little or no consequence &
I doubt there are so many young and impressionable folks here. Besides, a 7% swing after a serious run up is hardly Enron or one of those penny stock pump and dumps. Things are still swirling around GTAT, to say the least. Sorry, it's not the conclusive mess you make it out to be.
Look, I get that some posters are playing with fire in committing most of their money and hopes here. I'm a "believer", but with appropriate weighting relative to my overall portfolio. I'll definitely live to fight another day if GTAT tanks...but yet reap serious money in the equally probable event that sapphire & solar markets materialize for this company.
There's still a debate here. You can add to by refraining from the gratuitous taunting. All the best.
Under the pretext of illuminating an alleged pump and dump, you're simply gratuitously taunting people. You're not fooling nobody in this regard. Give it a rest already.
If you want to debate like a gentleman, do so. Given the lack of quality that characterizes most Yahoo chat boards, take advantage of one where the debate is relatively more civil and informed. All the best.