(1) I expect the stock to double from here; at one time PEG the stock can go four fold. Here is why: 70 percent projected growth in earnings from .90 cents to 1.54. Assuming a conservative half the growth multiple, the stock should comfortably garner a 35 next year multiple or $56. Of course, it is likely that the market will award at least one time growth rate for next year, thus putting PPS north of $ 100;
(2) This forthcoming quarter both sales and earnings will be exceptionally strong, even transcending AAOI business seasonality. Here is what the CEO said about booking/backlog and the general very positive trend for the year in the latest quarterly numbers' press release:
"We are entering the first quarter with record bookings driven by the adoption of our new data center and fiber-to-the-home products. As a result, we believe we will achieve record revenue in the first quarter that will mitigate historical seasonality in the CATV market," concluded Dr. Lin.
The stock is mildly down today on very low volume; as the volume dries and new position in anticipation of strong Q1 are opened, expect another huge leg up in PPS.
I think the reason why the stock is up only 6 percent, but not 15 - 20 percent, is largely due to the soft quarter coming. There is also the uncertainty of Obamacare the company references.
As the next quarter nears, with no guidance for the next quarter, the market will discount this uncertainty and PPS will revert to pre-earning or lower.
From the Conference Call Transcripts; p. 3
“Pharmaceutical sales industry-wide in Q1 and our product sales in Q1 may be impacted by adverse winter weather in the U.S. particularly in the Sunbelt, and changes in the health care landscape like changes resulting from the Affordable Care Act.”
This is the main reason why market response to earning will disappoint big time..
It is not PLUG's woes; rather the fact that in the final analysis they issued as bogus news: no new revenue, zero, zilch, nada. Read the Release again, the management didn't even hint at revenue because lawyers would be all over CDTI. Unfortunately, retail traders do not take NO REVENUE for an answer. They will learn the hard way as CDTI revert to the mean below $3.
Stocks can go from 1000 to zero, as would PLUG, but on its way down there will be spikes, sometimes huge, depending on BETA. If you are an investor, this company will go bankrupt in the future. Consider a few facts: ROE: -172.58%; Operating Margin (ttm): -123.53%
Return on Assets (ttm): -44.18%
Return on Equity (ttm): -305.04%
ZNothing has really changed
But, if you are day trader, none of it matters. Buy two days from now for a quick short term spike of 10 percent; sell when it reverts to the mean in two months (think 3D printing) and wait for the next sizzle, or price hike of 30 -70 percent, again with no beef.but what does it matter. The problem of most newbie traders , boyaa crowd investors is that they confuse the two.
As long as there are unsophisticated (read dumb) retail newbie traders and boyaa testeron driven young inexperiencced dumb momentum players, it just does not matter. Those who sell did the right thing, although if the social science research is any indication they will chock it to mastery not luck, and they too will lose big time the next round. The rest who hold on, the boyaa crowd included, will lose big. The stock will revert to the mean below 3 dollars. When? I do not know; two to three weeks is a good bit as the volume dies.
This is an utterly complete total fake news far there is no, zero, zilch, nada, revenue expected.
1.90 - 2.00: years of turmoil and uncertainty and pain in the stock; thus huge share overhang. Even if it closed above 2 ( 2 - 2.25), profit taking tomorrow will take it below 2. If a correction of 5 percent hits the market, this thing will be right where it was yesterday.
In terms of momentum trading, obviously you are wrong. However, SKUL as investment you are absolutely correct. The stock is selling at nearly triple digit multiple, is looking down the barrel of .17 cents loss for the next quarter beginning today and in 2015 the earnings are projected to be flat for a company valued at triple digits multiple. Maybe SKUL is an example of the froth and mini bubble in parts of the market. When it ends in these crazy names, it ends excruciatingly badly.
You said, it: In terms of fundamentals and crazy valuation SKUL looks awful. Next quarter analysts average projected loss had been .17 cents for some time. Yet management guidance didn't revise. This says a lot about underlying weak fundamentals. For it says, this was a one quarter earning blip for SKUL.
Don't own it but was hoping for a scalping trade. But is too dangerous at this elevated levels.
The company is looking at a projected huge EPS loss for next quarter; Worst, in 2015 its earnings will be roughly flat and yet it is selling at an astonishing 120 times this year earnings, including yesterday's good news. In the face of this reality, these pre-market buyers are paying 20 - 25 percent premium with utter disregard for valuation.
For smart money it is a 'sell on the news' event. Don't pay more than 10 percent premium to yesterday closing price,, if that, and only for a quick trade. Long term with its violent EPS gyrations, negative return on equity and horrible valuation metrics, it is not an investment.
When was the lat time they audited? Until I see audited number for the trailing quarter, I do not trust past performance or future hype.
Given deteriorating margins and declining sales, I'll not buy. Given all the hype, I'll not short. If you are trader, great; if you are investor, stay away until numbers are audited by a reputable accountant. Good luck with getting reputable honest audited numbers: see the company history.
(1) Chinese companies have won the Nobel Prize in lack of transparency and outright accounting fraud' ,especially true of reverse mergers. How can one tell MOBU unaudited numbers are true and honest; the problem compounded by questionable accountant.
(2) In the latest quarter sales actually declined.
(3) This Chinese guy who wrote the 'seeking alpha' this morning does not present actual numbers on the company's performance: he does not say a thing about TTM and projected revenue, earnings and earnings growth, ROE, operating cash flow per share, etc. Reason: because it is dismal. Instead, pieces like this Seeking Alpha touch on the usual suspects: how utterly gigantic the market is, why this company would be the next big wow if only it can garner a small share of the smart phone, etc. etc.
Usually people who have big positions hire these 'Seekinh Alpha' PR guys to generate short term uptick in volume to sell into or, better yet, make an extra few perecentages profit at the expense of the Joe 6 Pack Shame on them.
I had expressed concern about the company not offering guidance. Will, it does offer the proper metrics for projecting guidance such as a '2014 redo' which translates into 30 percent growth. Most important for this line of business in particular is cash flow from operating activities, the one foundational metric that never lies because it reconciles balance sheet and income statement. By this metric the performance of ERII was actually spectacular:
"For the full year of 2013, the Company generated cash flow from operating activities of $2.1 million compared to a use of $(4.4) million in 2012, demonstrating a year-over-year improvement of $6.5 million."
No specific guidance, no numbers; therefore, the above comment actually raises more questions: why does the company refuse to guidance for at least the next quarter? I'll tell you why; because the management admits that the first half of the year sales will be soft and will ramp up only during the second half. The problem is, why bid up stock if you have to wait six months to see if the management was right? In the interim anything can happen. Why not wait and see if the numbers actually pan out. After all, this company from its inception has been plagued with erratic sales and earnings. I would not chase it here at all. The headline numbers are somewhat misleading.
Am not short, don't own it; I just stated the key points from the press release. All I am saying is that one should thoroughly read today's press release and examine the gyrating EPS history; if you still think it is OK to pay 20 percent premium whein fact the company says that sales in the first half will be sub par, I say go for it and buy now. Otherwise, pause and do not chase.
Short is not the problem or solution: Less than 4 percent short; far far less than typical ratios for this sector at this very late stage of the bull market.
Company says it is not prepared to offer guidance, plus says that revenue will back up toward the second half; so far away.
Worst, it says the year will be as good as 2013. Well, only the quarter just reported was good, thus a modest negative.
Headline numbers can be misleading. Be careful, do not chase it.