Buy TRID
TRID will be releasing earnings shortly.
There will be bad news - probably some margin or sales weakness.
But I remain focused on fundamentals: LCD TV market continues to soar and TRID continues to dominate. The competitors are unable to compete on quality, just price.
Some things I'll be watching:
1. Cash position - They should have ~$4 in cash per share by this quarter.
2. Options expensing - There will be no expenses for this last quarter or going forward for quite some time. That's margin positive
3. Reduction in expenses tied to SEC investigation - Even a $2M reduction in legal fees adds $0.03 EPS
4. Margins - TRID is trying to integrate multiple chips. This reduces unit sales while maintaining price/margins. We'll see. They did warn about falling sales for Q4.
I think the new CEO will own this quarter. She lowered expectations for Q4 and will raise them going forward.
I would like to deviate from the model this one time:
100 contracts, TRID Jan 09 Calls $7.50 exercise price. Cost $5500
(10,000 shares under contract at $0.55 each)
There will be bad news - probably some margin or sales weakness.
But I remain focused on fundamentals: LCD TV market continues to soar and TRID continues to dominate. The competitors are unable to compete on quality, just price.
Some things I'll be watching:
1. Cash position - They should have ~$4 in cash per share by this quarter.
2. Options expensing - There will be no expenses for this last quarter or going forward for quite some time. That's margin positive
3. Reduction in expenses tied to SEC investigation - Even a $2M reduction in legal fees adds $0.03 EPS
4. Margins - TRID is trying to integrate multiple chips. This reduces unit sales while maintaining price/margins. We'll see. They did warn about falling sales for Q4.
I think the new CEO will own this quarter. She lowered expectations for Q4 and will raise them going forward.
I would like to deviate from the model this one time:
100 contracts, TRID Jan 09 Calls $7.50 exercise price. Cost $5500
(10,000 shares under contract at $0.55 each)
posted by Andrew at
12:13 PM
2 Comments:
Do you still feel like buying ?
- Revenue down
- Gross Margin will settle at 40%
- CEO doesn't have much clue on what is going on
Any positives ?
Besides the basic fact that they are making money and undervalued?
How about a shift in the short game? With no reason to drop any further, the shorts have to unwind their position.
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