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GirlsUnder30 (45.01)

The awesome opportunity with GTAT

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February 28, 2013 – Comments (7) | RELATED TICKERS: GTAT , NFLX

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. 

7 Comments – Post Your Own

#1) On March 08, 2013 at 1:52 PM, DrGoldin (98.82) wrote:

Are you sure about Piper Jaffray?  From what I see, their current call is Neutral.  TrackPiperJaff is actually showing a red-button call on the CAPS page for GTAT, but I think that's wrong.  Goes to show that CAPS scores for these tracked Street calls aren't always accurate though.

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#2) On March 17, 2013 at 1:04 PM, RallyCry (< 20) wrote:

Whats the outlook for AMAT? still bullish?

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#3) On March 19, 2013 at 11:37 AM, GirlsUnder30 (45.01) wrote:

DrGoldin, they may have changed their outlook but I do remember reading the overweight from either P-J or their investment affiliated Canaccord at the time prior to the rise in the stock around Valentines Day. The stock is a very strong short squeeze candidate

RallyCry, the stock is way cheap under $13 in my opinion. I'm overweightedand and expect the stock to be $17 by this year and $24 by next year.

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#4) On April 09, 2013 at 10:31 AM, GirlsUnder30 (45.01) wrote:

This blog got awful quiet. I really suspected this would be my most popular blog post given the enormous short position and the very strong upside potential of this company. If anyone reading had heeded my advice they would be about 25% richer in GTAT stock today.

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#5) On April 13, 2013 at 4:35 PM, 007mercucio (< 20) wrote:

I was heeding without reading.  LOL.  Going long with this one.  I think GTAT has alot of potential.

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#6) On May 08, 2013 at 1:48 PM, GirlsUnder30 (45.01) wrote:

A month later and now going to 50% 8^)

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#7) On May 17, 2013 at 3:51 PM, GirlsUnder30 (45.01) wrote:

Okay, it's time to take some off the board and here is the how and why:

1. reduce your long exposure to GTAT at the current prices. If you'll net over a $1.50 (%50) on the stock take the gain because we will see a retraction coming soon that will last over a year. I was heavily overweighted in it and plan to reduce my position 80% by June.

2. The reason for the retraction will be indigestion of its current acquisition and liquidity problems.

3. Selling the $5 calls through December is a good way to make holding this stock less painful.

I'm so surprised this thread hasn't hit at least 5 recommendations yet.

 

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