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VMware, Inc. Message Board

mahgver 16 posts  |  Last Activity: Sep 18, 2014 11:44 AM Member since: Feb 12, 2005
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  • To the surprise of many bears, GTAT may not lower its non-GAAP forecast of $1.50 per share for 2016. Revenue from all initiatives will be more meaningful in 2015. It is possible that the company will lower 2014 revenue estimates, but unlikely. Still, this would happen if a delay from producing sapphire at high enough yields was one of the reasons Apple delayed the release of its Apple Watch.

    Investors should expect product delivery in Q3 and Q4 to materialize. This means that while Q3 may meet forecasts, Q4 will be even stronger.

    http://seekingalpha.com/article/2503295-what-might-gt-advanced-technologies-announce-on-september-29-2014

  • mahgver mahgver Aug 28, 2014 10:36 AM Flag

    Their downgrade was based on "rich valuation". The stock trades at about 10 times forward earnings with a 40% long term growth rate. That makes GTAT one of the cheapest stocks on the market. Not only that, but 40% per year might be a bit on the conservative side, considering the massive opportunity the company has with Merlin in the solar space... "rich valuation" - too stupid to even think about...

  • Reply to

    Time magazine on iphone and sapphire

    by wantstoretireearly Sep 18, 2014 10:59 AM
    mahgver mahgver Sep 18, 2014 11:44 AM Flag

    If what he says is true, that the iphone 6 was never planned to have sapphire, then current guidance will be maintained- this is very bullish for the stock, which trades at only 8 times forward earnings.

    In terms of sapphire being more brittle than strengthened glass, this can be a bit misleading. Strengthened glass may be tougher than sapphire (deforms more before breaking) but its higher hardness and strength makes up for its lower toughness. Also, to survive better in drop tests, design of the cover is very important as, edge of the case can be designed to absorb a lot of the shock from a fall.

  • GTAT is likely to snap back to $15+ pretty fast as soon as they reiterate guidance. (+25%)
    $30 by next summer.... (150%)

  • 2016 $1.50 per share. Fair value $30.

    Sick opportunity here.

  • mahgver mahgver Jul 28, 2014 11:43 AM Flag

    thanks izn! We need more people like you!

    Sentiment: Strong Buy

  • risk: $3-$5
    reward: $50 - $65

    that's my kind of spot!

  • Reply to

    NOTHING has changed

    by mahgver Sep 10, 2014 2:21 PM
    mahgver mahgver Sep 10, 2014 2:25 PM Flag

    They already gave guidance last Q. "at least 1.50 per share in 2016" They've known apples plans from the beginning, but cannot comment.

  • Analysts LOVE splunk, a great growth company in the data analytics space. With a growth rate of around 40 to 50% it has a similar growth profile to GTAT, so let's see how these 2 companies compare. Both companies have MASSIVE potential to grow their businesses in truly enormous markets- Splunk, in the big data arena and GTAT in the sapphire, solar, and SiC markets. Analysts seem very negative on GTAT lately with a slew of downgrades based on "valution" or the near term catalysts being "priced in" So let's see how the valuations on these two companies compare.

    Splunk has no earnings, but is growing its revenues like crazy. The company is not expected to show any profits for some time and trades at 12X revenues.

    GTAT on the other hand trades at only 4X revenues, and is expected to be profitable in 2015 and earn "at least $1.50" in 2016. That puts GTAT at only 11.6X forward earnings. If GTAT traded at a similar valuation to splunk, at 12X revenues, it would be trading at $52.50 today.

    Why analysts are so negative about GTAT and so positive about SPLK is a bit of a mystery as both companies have similar growth metrics, although you could argue that GTAT's are better as the company will be showing actual EARNINGS next year, while SPLK will remain around breakeven. Going forward GTAT will have to show that it can deliver on earnings and revenue, and prove that the demand for it's merlin and hyperion equipment is as strong as they appear. If GTAT can successfully beat the estimates, the analysts will be forced to change their mind and upgrade the stock, at much higher levels.

  • The company (which has known about apple's plans all along, but was unable to comment) guided to "at least $1.50 per share" in 2016. That should give all longs confidence that this "news" doesn't change anything. After all, analysts have been saying for a long time that there won't be a sapphire screen on the iphones, so the fact that there isn't any should be mostly priced in at the $17 price range. Now we're left with a company that has a 40% long term growth rate trading at $13, which gives it a forward PE of only 8.6. A forward PE of 20 gives you a $30 price target. This has not changed. The next catalyst will be Merlin sales starting in early 2015. GTAT's potential in the solar space is simply massive.... yet no one seems to notice... yet. $13 seems like a great entry point for any long term (6 to 12 month) investors.

    Sentiment: Strong Buy

  • Suppose the stock stayed at $17 yesterday and today... how many of you would have sold?

    I suspect most people are selling only because the stock is down... not because they've thought logically about the fundamentals, valuation, and future opportunity.

  • Reply to

    longer term risk/ reward in this name is insane!

    by mahgver Aug 29, 2014 9:55 AM
    mahgver mahgver Aug 29, 2014 10:33 AM Flag

    With the company guiding to "at least $1.50 per share" in 2016, you could argue that the stock could trade down to $15, in the short term, which would put it at 10X forward earnings. Of course that would make GTAT one of the cheapest growth stocks of all time. Realistically though, there are not really any foreseeable risks that can justify a stock price below $20 per share. If we were trading at $30 per share right now, the risk reward would be more evenly balanced, as you could say the downside is $20. But since we're below that now, the risk is really extremely low, especially if you're willing to hold for a year or more....

  • Reply to

    Just sold long position, shorted at 13.7

    by happy_henry Sep 11, 2014 12:07 PM
    mahgver mahgver Sep 12, 2014 10:30 AM Flag

    what's your stop price?

  • mahgver mahgver Aug 28, 2014 10:43 AM Flag

    wow, nice find there. Thanks for the link!

  • Reply to

    NOTHING has changed

    by mahgver Sep 10, 2014 2:21 PM
    mahgver mahgver Sep 10, 2014 3:00 PM Flag

    No, but they did cut rev guidance already for 2014 when they reported last Q. Their guidance wouldn't include an iphone screen if they know they're not building any.

    GT Advanced narrows FY14 EPS view to 12c-18c from 2c-18c, consensus 3c
    Narrows FY14 revenue view to $600M-$700M from prior view $600M-$800M, consensus $666.8M

    Sentiment: Strong Buy

  • Reply to

    NOTHING has changed

    by mahgver Sep 10, 2014 2:21 PM
    mahgver mahgver Sep 10, 2014 3:04 PM Flag

    We'll be back in the $17 range fairly soon. Don't worry

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