The Company designs, develops, manufactures and markets custom memory solutions based on Flash memory and Dynamic Random Access Memory technologies.
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Solid state disk drives, first to market. While other companies, (STX) may come along and do it better and cheaper eventually, those first to market will hold a share and should be able to grow it if they keep R&D focused and supplied.
I see some down thumbs appearing due to the high P/E. A high P/E is justified if the growth supports it. Stec continues to be the leader. The qualification process of a disk drive in the enterprise world creates a nice moat for the first players. This stock will double in the next 12-18 months. I'm not sure how Oracle buying Sun will change the game as STEC had lead roll in some of SUN's new products, but besides that hiccup things are full steam ahead. Good luck. (Unless you're down thumbing MY STOCK! :)
Stec picked up IBM and Hitachi as customers last quarter. Fujitsu last week. Getting certified as an "enterprise" product in top end servers is a 6-12 month (plus) process. The moat widens. $20 plus by end of 2009. I'm hoping NO buyouts!
STEC Score: 362.99
Well played sir. I missed out on this one, but I'll keep an eye on your picks from now on.
I wouldn't call this one a miss yet, but it is much more expensive. I'm not prone to pump or make dollar predictions, but this one has a lot more upside the next 7 months. I'm expecting a minimum of 30%. I have some December $17.50 calls that I hope will be "in the money" soon.
I'm learning. Thanks for the comments!
they are in the money now.
Yep! :) ($39.90 today).
As with my direct shares of STEC, I wish I had more, but that's the nature of investing.....diversify and live, or bet Solaris farm and risk getting kicked outta the game! I'd invest in Solaris farm as well, his blog updates on the crops are always when I'm betwen snacks! :)
The great thing about options is that at some point, they sell themselves. I don't have to worrry about holding them! But it's time to buy more! :)
The stock fell almost %40 percent today TSIF, would you purchase this at this price again? Or do you see a gloomy future ahead?
XKing, I expected some churn and I thought about closing it yesterday and banking the point, but my thoughts on earnings were that they would be better than expected, but not meet the markets inflated expectations. The theory that there is competition for STEC's products is definitely wrong and weighing down the stock. There is competition in laptops and desktops, but not in the enterprise world. Their customers had a good quarter, so I felt they would as well. The problem I did not calculate was that one of their customers is 90% of their revenue. I know of the 6 companies that had approved their products that one was larger, but not that much larger. Had I known that, however, I doubt it would have negatively influenced me this quarter as that customer also had a blow-out quarter. The issue was in forecasting product, current and forward. Since there was bad forecasting there is over supply for next quarter, meaning the forward looking factor is negative for STEC, which you can't have on a company fueled by growth.
What I would like to see is the major customer use up the excess product and a bigger adoption rate in the other customers. STEC is such a young company in this field that they don't know how to balance customer's expectations for instant upside with unrealistic forecasting. From an adoption standpoint, the end user of SSD drives does not see the performace and reliability benefits of SSD outweigh the added cost by enough margin. I think they will, and I think STEC will have a monopoly on the SSD drives in enterprise customers for at least a year. Currently the P/E that was 100 at the peak of the ramp in share price with everyone looking so far ahead is now about 8, which is low for a technology company.
My long winded answer is yes, I see value here over the next year or two. I would buy at these levels IF I had a one year outlook. The next 3-6 months could go either way, but I think there is more chance it will go up, than down, therefore I think this is a good entry price. Investing is a marathon. Trading is a sprint. Some people say you can't invest in today's climate. I think you can, but it's harder. Harder to find good companies, and harder to be patient. Good luck.
STEC1119C23 2.12 up 0.43 open int. 121 long march option strike 23 feb 3rd 2010