Iqe Share Discussion Threads

[bocase] 03/9/2018 14:46

B & B:

"I think a lot of punters are long via spread bets, which is a poor tool for long term holding."

Couldn't agree more. Buying on leverage is a mug's game in my opinion. The market is too unpredictable and this leads to extreme stress. I have the tee shirt. Buy what you can afford to tuck away and the daily moves don't matter too much.

Adejuk: I am not too far behind you.

[belt n braces] 03/9/2018 14:22

+ I think a lot of punters are long via spread bets, which is a poor tool for long term holding.

[doc1975] 03/9/2018 14:21

bocase - Spot on. A load of these PR types are not the ones we want to run a company like IQE. I remember there was a CEO talking all the time about a company called COMS and it turned out he was full of it. Be careful what we wish for when complaining about the board. I would be nervous if the board kept updating us as I want their focus on the day job notbon a spin machine. The type of people running IQE are the right ones for this sector.

[belt n braces] 03/9/2018 14:19

Hi Bocase

I do not think Buffet would invest in a company that is heavily shorted or subject to reports such as Muddy Waters? The first sniff of that kind of stuff and Buffet is out?

Otherwise agreed re Buffet and long-term investing.

[adejuk] 03/9/2018 14:18

bo
i agree
but long term for you may be different for me :-)
mid 70's approaching
oh dear, how did that happen when i wasn't looking?
not concerned for me. i am more than comfortable.
i would like to assure my kids and g/k future - if anybody has one :-(

[bocase] 03/9/2018 14:13

Knackers:

"manufactured materials will be increasingly required for 2019 product. That's where investor focus should now be."

Indeed and the market is forward looking so I doubt we will be waiting as long as 2019 before we see a strong recovery in the share price.

I am sure many contributors here will have read Warren Buffett's books. If you have not, you should and you would be less concerned about the daily or months swings in market mood. Take a long term view in a company in which you have long term faith and let the power of compounding work it's magic.

[knackers] 03/9/2018 14:04

Indeed bocase and let's not forget, that was a punchy Exec Interim statement. As an 'orders-based' business, 2018 revenues will now be very solid and manufactured materials will be increasingly required for 2019 product. That's where investor focus should now be.

[bocase] 03/9/2018 13:55

Aphro:

Spot on, I would agree with all your points but whilst there are those who can be scared out it just means more cheap shares for those looking to enter a long or close a short.

I have always been ultra sceptical about analysts' buy/sell stances and in particular their price targets. How can one have, for example 300p and another 120p on a stock. One or both must be totally wrong which means most views are not worth the paper they are written on. EPS and EPS growth is what counts.

In spite of the NDAs I do think the board could have done more to inform the market between formal announcements and yes directors' buys would send a strong signal. The fact that they obviously don't feel the need to constantly re-assure, is in itself a re-assurance as they are prepared to let the future figures do the talking.

[knackers] 03/9/2018 13:50

Indeed if IQE are "way overvalued" then short exposure is nigh on suicidal. Those that live by the sword etc...

[rivaldo] 03/9/2018 13:43

Seconded Aphrodites. Such a misleading article, looking backwards with no reference to the future - just one example being the imminent spread of VCSELs to Android - or the rapid fall in the P/E in the coming year, which is not far away now.

He should be paying more attention to the valuations of companies like WAND (note today's results and fall), PRSM etc which are still far away from any meaningful profitability.

[knackers] 03/9/2018 13:41

I smell a rat...


Shorts are way over-exposed and need to regain something of the narrative lost post Interims ("oh look, IQE is still way overvalued!!") But on a PEG of 0.8 or less, I think not! Longs should expect some nefarious and one-sided tactics being played out and it will likely intensify. Otherwise there will be one almighty squeeze as we head into 4Q, FY results and 2019 forecasts.

- 2018 orders and revenues nailed on (with upside)

- 1H19 orders will now be coming in with completion of ongoing 2018 Tier 1 OEM qualifications

- Cash balances (very) strong

- Diversified and deepening product offering

Edit: If shorts protest too much, they risk undermining their credibility entirely. And without the 'reverse swing' they seek could find themselves in deep water. Time and tide.

[aphrodites] 03/9/2018 13:25

As I posted on 26 August and I was quite surprised no one picked up and commented at the time on the point I was attempting to make about analysts’ reports, I said:

For what it is worth my Hedge Fund contact, who believes IQE will be taken over, has been short Intel and long AMD in a big way. And this last week the trade delivered massive profits as he closed the position!

As a matter of interest, one of the big US banks has recently been pushing Intel as a major buy to its clients. My contact told me he had visited them a couple of weeks ago and questioned their logic and explained why he suggested Intel should be a sell.

After explaining the rationale to the analyst, he was told, you are far more familiar and expert than us with the technical science involving these businesses!!!!!!!!

A week later they changed their Intel buy recommendation to a SELL!!

I think this highlights the point I was attempting to make. Many of these so-called expert analysts who write up company “BUYS” & “SELLS” and attempt to put a value on the shares, really haven’t got the foggiest idea about real sciences involved in the businesses they cover.

IQE has the potential to be another AMD and the share price can well outmatch VRS. But I question, will it be around long enough for us all to cash in?

As Kazoom points out in his post 20363 today, one can pick a lot of holes in the article published by Dan McCrum in the F.T. He is nothing more than a jumped-up little has-been journalist who has no idea whatsoever about the detail of what the technology behind IQE involves. If the IT analysts in some of the big US banks can admit to their lack of knowledge of the science involved in these hi-tech shares you can put your money on McCrum being well behind the pack. If he had any experience he wouldn’t be employed and paid as a lowly journalist. The article stinks of him being briefed by someone on the outside who has an axe to grind in IQE shares.

The article stinks and once again the Board, if it was in its right mind, should take up with the F.T. the inaccuracies of McCrum’s article and seek an apology. The alternative of course is for the directors to enter the market and buy large slugs of shares to prove their point. But I guess we are unlikely to see any action on either front.

[richardc77] 03/9/2018 13:24

Bocase - Nail on the head

“Today's negative journalists will no doubt be raving about the stock in a year's time. They do like to be right, even if it is after the event.”

[bocase] 03/9/2018 13:21

It does remind me of when I sold ARM for 70p as I was fed up with no action and promises taking too long to come to fruition.

I am not saying this will reach £23.50 or whatever like Arm was taken out for but the parallels are there. Patience is needed for the company to achieve it's undoubted promise. Today's negative journalists will no doubt be raving about the stock in a year's time. They do like to be right, even if it is after the event.

[doc1975] 03/9/2018 13:20

thecrunk - cheer up. CEO’s want to drive away shorters but did he actually say he will drive them away? He probably hoped the forward looking statements would be enough to reduce the positions against IQE. I suspect the Ocado CEO had similar frustrations but it was a long waiting game. You either believe the EPS will grow rapidly over the next 5 years (which means the CEO must be OK) or you think that Drew is pretty rubbish. I don’t have many shares in my portfolio up this amount in 5 years so I quite like him. Perspective is the only difference due to price paid.

[podgyted] 03/9/2018 13:13

You will only drive the shorters away with results.

The first half results were not good enough to do that - as many here predicted if for no other reason than the 40:60 split.

Now a waiting game again. If IQE's growth and profitability is as good as forecast the win is in the bag.

[doc1975] 03/9/2018 13:09

thecrunk - the only way to drive away shorters is sustained EPS growth. That could take a while as the cost to ramp up capacity will impact until the volume increases start to gear up profits. I think I said late last year 80p-£1.20 is about right until we see the EPS start to shift. I fear you bought after the huge share price increase which means you should blame yourself more than Drew. He has stood over a huge share price increase over 5 years so he has the benefit of the doubt for now.

[thecrunk] 03/9/2018 13:04

I blame everything on the arrogance of the existing board and CEO.

To say you will teach shorters a lesson.

But with no CFO for 9 months.

For whatever reason Drew Nelson has failed. His stated intnetion was to drive off the shorters and that has certainly not occured.

[poombear] 03/9/2018 13:01

Seems to be basing the mad valuation by looking back, when we have been told many times by the company that H2 will deliver 60% of this year's revenue, and 2019 will see a more sustained ramp in VCSEL production. We are now approaching £700m. And nobody seems interested in GAN on Si in base stations as a new revenue stream.

[lord loads of lolly] 03/9/2018 12:56

Time will tell. P/E ratios tend to be forward-looking. So with 40%-60% annual growth forecast in Photonics for the next 3-4 years and around 10% in IQE's other divisions, the current P/E ratio is meaningless. In any case, the PEG ratio is widely considered a more accurate predictor. And that looks far from stretched at current values.

[barnetpeter] 03/9/2018 12:49

"Even with some enthusiasm fading, the shares are still worth almost £800m, around thirty times what a handful of analysts expect the group to generate in earnings this year. In light of half-year results last week, that valuation looks mad".


I agree so am short!

[picobird] 03/9/2018 12:49

Dan McCrum the author of the FT article has a somewhat blinkered approach to companies. He is running a series in the FT along those lines & has been running with the shorter crowd for a while now. He has written articles on Globo & Quindell, but having worked in the IC offices it’s not really surprising.
Shame he didn’t mention the jobs being created in Wales as a result of IQE building their business from their elite product offerings.
Anyway he is smallfry, young & will be forgotten soon enough.

[barnetpeter] 03/9/2018 12:47

I am not going to win this debate whatever I say so lets just see. The article already posted above sets out the bear view quite well.

[panic investor] 03/9/2018 12:31

Shorters on Advfn make no difference to the price - their funds don't make any impact - like Forex it's the bigger players and they don't waste time posting on bb's

[adejuk] 03/9/2018 12:26

btw barnet
i expect you'll post a screenshot when you close ?
lol
and if it's for less than £1k a point, don't bother.