I agree with you entirely. Its just that some positive analysis of the company helps to increase its profile and remind us that as a value investment this is a reasonably good operation. The resultant tick up in the sp seems in this nervous market to bring out sellers and we're back to where we started. Iqe is not a market favourite and its difficult to change this, particularly when many tech stocks have taken a tumble catching even the hedge funds out I was reading in todays FT. All the company can do is literally to increase sales, revenues and profits steadily and let the share price take care of itself. It's up to Mr market to realise this company is at least 30% undervalued compared to some of its peers and will remain so until he sees fit to re-rate the share. As for the company appointing a new broker, well its bound to have the same effect as the IC when promoting Iqe. I'm underwater here because I bought too high, But I'm at least satisfied that as far as operations go this company appears to be growing steadily with no nasty surprises in sight. I shall just have to wait or bail out at a loss. for the moment I'm prepared to wait.
We need a bit more than a tip from IC to get going. For me it appears the company is run by technical people not entrepreneurs, by that I mean the top brass don't appear to sell the company profile well. Some months ago they changed brokers and nothing
...........of an up trending line now at about 21p and a downward trending line now at about 24p. It has to break out and can do one of three ways 1) UP 2) DOWN 3) STRAIGHT AHEAD ON THE LEVEL What ever the eventual move expect the MMs to make a feint in the opposite direction.........so if it lurches down to 18, 19, or 20p expect eventual boomerang up to follow. Poor guys godda make a living. AIMHO of course just my peculiar take on investments on AIM
Thanks for the post. The only question is.....will any rise in sp be sustained...?? So far its been given back to the market after a day or two. The printed edition of IC is out tomorrow and if Simon thompson's article is repeated maybe there's a chance of further to go. Tough market out there.
A bit more on IC
Taking all the above factors into consideration, analysts Dan Ridsdale and Tom Grady at Edison Investment Research still expect IQE to drive up adjusted pre-tax profits from £13m to £14.9m this year and to increase adjusted EPS by 10 per cent to 2.2p. On this basis, the shares trade on little over 10 times current year forward earnings, a massive discounts to its nearest rival Visual Photonics Epitaxy (18 times) and wireless customers including Skyworks (14 times) and RF Micro Devices (18 times). Furthermore, if IQE hits Edison's EPS estimate of 2.5p for 2015, based on pre-tax profits rising to £17m, then the shares are trading on little over half the rating of peers. That still looks an anomalous rating to me. So although the shares are little changed on when I last updated the investment case ('Wafer maker sell-off overdone', 4 February 2014), I still feel that a target price of 35p is not unreasonable. My target is inline with that of analyst Bob Liao at brokerage Canaccord Genuity, but well below the 43p fair value target of Alexander Jarvis at broking house Peel Hunt. Technology analyst Pia Tapley at N+1 Singer has a lower target of 28p, but notes that "our revenue growth expectations are conservative, with constant currency revenue growth of circa four per cent in 2014. However, the planned cost saving mean our forecast earnings growth is substantial, equal to a compound annual growth rate of 17 per cent between 2013 to 2016. This improvement should be completely within IQE’s control, with the potential for further cost savings to be identified. The valuation in this context looks attractive." I could not agree more. And it's not as if the technical set up is not starting to look favourable once again. The 14-day RSI is around 50 so is not overbought, the share price has regained the 20-day moving average and also appears to be coiling up for an upwards move to take out the 200-day moving average at 25p. Beyond that the next resistance is the March highs around 27.5p. Trading on a bid offer spread of 23p to 23.25p, I continue to rate IQE shares a value buy.
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