The awesome opportunity with GTAT
I have been following this stock for some time. I took a nibble at $4 and am ready to go in with both fists. Here is why:
To my surprise, the 25% hump we saw over Valentines Day in this stock was NOT short covering so there are some ballsy players in this stock who I hope don't get neutured. All but 13 million shares of this stock are held by institutional investors and there are at least 30 MILLION SHARES SHORT!!! This creates a situation just like NFLX where the scarcity will put incredible upward pressure on the stock which can only be relieved by a sympathetic or forced seller. I just finished my first pass reading over the financials and they don't look that bad. Of the reported loss, $1.36 is attributable to non-cash items. They resolved their upcoming covenants with BA and increased liquidity if they need it. They pared their deferred revenues and have only about $0.15 of inventory risk if their customers don't survive. Forward guidance suggests a 7-12x P/E for 2013 WITHOUT including any talk of their upcoming FD-SOI business which I believe could surprise everyone with its success. Piper Jaffray has an overweight recommendation @$3.42 and trackPiperJaffrey has a near 90 fool CAPS score. This one looks like an awesome winner to me.