Iqe Share Discussion Threads

[lpavlou] 05/10/2018 00:20

The Schroeder's holding has to be positive news. I half expected to share price to breach 85p today and whilst it's difficult to predict the bottom 80p seems to be holding, although I recall saying that when the SO was 90p. Hard to buy at the bottom so best to dip in little and often.

[regasclockwork] 04/10/2018 18:02

Apologies if already posted. I've deleted the paragraphs relating to GHH. Nothing we don't already know of course, but could have helped the share price 'zoom' to 85p today [before falling back]. From Motley Fool;

Why IQE’s share price could be set for a rebound
Peter Stephens | Thursday, 4th October, 2018 | More on: GHH IQE

Image source: Getty Images.
The last year has been disappointing for investors in wafer product manufacturer IQE (LSE: IQE). Its share price has fallen by 37% during the period, with investor sentiment coming under pressure after slightly disappointing financial results.

But this could present a buying opportunity. The company’s long-term investment prospects seem to be sound, with a relatively low valuation suggesting that it may offer a wide margin of safety. As such, it could offer upside potential at a time when a number of shares appear to be overvalued.

Improving outlook
As mentioned, the financial performance of IQE has been somewhat disappointing in recent months. The company has reported lower profitability as it seeks to invest for long-term growth. As a result, its bottom line is expected to fall by around 1% this year. This puts it on a forward price-to-earnings (P/E) ratio of around 28 for the current financial year.

However, next year the performance of the business is due to improve significantly. It is expected to post a rise in earnings of 43%, which puts it on a price-to-earnings growth (PEG) ratio of 0.7. This suggests that it offers a wide margin of safety that could mean there is recovery potential over the coming years.

IQE’s recent update may have shown a fall in profitability, but the company was hit by negative currency adjustments. It continues to invest in its production facilities, while demand within its operating segments remains high. As such, from a long-term investment perspective, it seems to have significant appeal. Certainly, volatility could continue to be high, and there may be further disappointment ahead in the near term. But in the long run, a turnaround could be on the cards. -End-

[yankeekraut] 04/10/2018 17:04

FWIW, I doubt whether the new CFO, assuming he / she starts in 2018, will beat the numbers. I would expect him/her to want to learn the accounts & balance sheet and of course the sales forecast for 2019 and "achieve" what the company has said it will do, and "push" any "excess" sales into 2019 (already confirmed that they have high expectations for 2019). 2018 will be 60/40, as already communicated. The only jam could be additional customer wins, IMO.

[toppix] 04/10/2018 17:03

In addition to your synopsis Hawkwind, I can see a similar 'shape' to the Long term share price movements of IQE between October '16 to '18 and Apple Inc between Oct '14 and '16.... then.... the future does look promising.

Just a casual observation - not to be taken seriously, but I do agree that business momentum is gathering pace and more production will fuel growth.

[jamesrowe] 04/10/2018 15:38

Conversely if H2 is not quite as strong as many hope then the short positions could drag on for some time yet.... IQE seems to have been late in getting its new reactors into full production so how confident are we of beating expectations for 2018?

[hawkind] 04/10/2018 15:31

My thoughts exactly Boboty. The hedge funds will begin to close in anticipation of the share price exploding due to compounding events over the coming months IMO, TRP recalling loaned shares, shorts closing, CFO appointment being confirmed and will want to realise their profits before that happens. No one can know for sure when the time is, but I see the signs of events beginning to align and would be confident the share price will not touch any lower gaps below the gap closed at 81p if there are any below it. Challenge away Kazoom, it's always good to have different views and opinions, in any even time will tell but I don't think time of year and market sentiment can be discounted which makes it a little different proposition from the false breakouts in August 18.

[boboty] 04/10/2018 14:52

With this Schroeder update Institutional shareholding must be over 50% now and well over if you include the directors/ officers of Iqe. If shorters are short of 10.6% disclosed and may be as much again not disclosed then there aren’t many shares out there to be easily bought back. I’m assuming institutional shareholders are going to hold on and not sell. There are quite a few private investor shareholders who will not sell - I’m one of them and hold just under a Million shares and I know of a few others with far more. When the shorters want to buy back it might be difficult to find the shares to buy unless the share price increased significantly. By my reconning there may be less shares in private willing hands to sell than the shorters require. Lots of speculation here but the run up to a trading statement in December (or sooner if Material sales over 60/40 split mentioned in half year results are being had) . Exciting times ahead - shorters beware!

[kazoom] 04/10/2018 14:01

Some good points there hawkwind, but I would challenge some of those that suggest "the time is now".

"Short funds looking to close to ensure year end figures look good"
- No, surely they value any open positions at "mark to market" so they don't need to close them in order to show the profits

TW [TRP I think you mean?] also will request loaned shares back for their year end accounts
- Covered before here, IQE is such a small part of their portfolio it wouldn't make a material difference to their results.

- Gap at low 80’s filled - Cup and Saucer formed
There are apparently lower 'gaps' and the mini-rally of the last few days doesn't look materially different to the one we saw at the begging of August for example (when the price was > 100p!) So I think we could still see breakouts in either direction.

Personally I am tempted by the idea that we are near the bottom here, but I really don't know.

I sold out part of my position at about 114p earlier in the year and I have recently started dripping back in, with weekly instalments that would see me back to my original holding by the end of the year. I the event of any conclusive breakout in either direction, my foot will go on either the break or the accelerator!

[thereptile] 04/10/2018 14:00

Did I miss the sweenoids return

Where is his post

[richardc77] 04/10/2018 13:14

Hawkind, many nails hit on the head there, which is why I have amassed a sizeable holding in IQE, I simply cannot find another story as good for the next 2-3yrs, and whilst there was some froth in at £1.80, there is none at all now imo.

[hawkind] 04/10/2018 12:40

Hi All,Regular reader, but first ever post as generally an observer.The stars are now aligning ready for lift off IMHO. This is very unlikely to drop into 70's again unless MM want to catch PI out one last time.The reasons to support this opinion:Technical and Market Psychology side:- Gap at low 80's filled- Cup and Saucer formed- Back on course with moving averages- Christmas Rally beginning phase- Return of the Messiah AKA Sweenoid - Summer period finished where low volumes can be capitalised on to drive prices down Fundamental and other side:- Funds buying- iPhone confirmation of FR technology in more affordable models- Other industries seeing benefit of FR- Short funds looking to close to ensure year end figures look good, TW also will request loaned shares back for their year end accounts- CFO to be appointed (The fact it has taken so long to appoint one is excellent IMO as top candidates cannot be bought of the shelf in Sainsbury's and location may have been a factor) waiting for the right person and taking time in selection process as they will be at the helm for years to come through a high growth period, if only Man U took as much care is selecting the right players/candidates- Building a new larger manufacturing facility, I am sure that is not for no reason.- Government in support- No news from Management other than when necessary. ( No news is good news and demonstrates the managements confidence in the business model that they don't need to RNS every public event or positive step forward)All the above IMO, DYOR as I can assure I have done mine ?

[thereptile] 04/10/2018 12:09

Is that Teresa May I hear singing ‘ the only way is up ‘

Please Noooooooo. 🤮

[rostam60] 04/10/2018 12:08

I am now more convinced that the note from DB was probably timed to help the shorters.
This is me with my very cynical hat on.

[thereptile] 04/10/2018 11:59

Squeaky bum time for the shorters. Or is it mmm

Too complicated a game for my tiny brain

[rivaldo] 04/10/2018 11:43

Great to see Schroders going above 5% with 38.8m shares. The IQE web site has them with 28.4m shares at the end of May, so they've bought over 10m shares since then.

[adejuk] 04/10/2018 11:15

in theory, the schroder info is a shot across the bows. we'll see.

[mhassanriaz] 04/10/2018 11:02

Schroders increasing stake. RNS on london stock exchange. IQE website RNS lacks Pdf. Go check

[tomduck] 03/10/2018 21:31

65/35 would do nicely.

[grity] 03/10/2018 20:06

Turn the 60/40 into the 70/30 & were all laughing into 2019 . GLA

[lpavlou] 03/10/2018 18:12

The companies producing VCSELs are either doing it for their own products or are outsourcing. We have the largest share of the outsourcing market. From my previous research they were only 3 companies producing 6inch wafers, so again we have a lead on the 4 inch wafers producers (including Finisar as thy have yet to produce 6 inch wafers). We can afford to discount prices for large volume as if our products are reliable and OEMs tend to stick to the same suppliers if their products are reliable. This is a huge quarter for us and would be good to turn some of these 24 potential customers into real orders for delivery this year.

[diplomat65] 03/10/2018 12:22

Agree wholeheartedly with your comment. Even with my limited knowledge of epitaxy, the barriers to entry are significant. For example, if you read the iPhonec teardown article posted this morning by Rivaldo detailing the significant presence of Skywork's chips (IQE partner) in the latest series of iPhones, you will find zero mention of Finisar who you recall received a USD 390M commitment from Apple for their VCSEL's. Seems they are at least one year behind. Shame on Deutche Bank for not bothering to scratch the surface of this tech, let alone dig deeply enough to make qualified judgments. Doubled up my holding at 85p, now averaged down to 106 per share. Still underwater but see no better long term prospect than IQE. GLA LTH.

[rostam60] 03/10/2018 11:51

From IQE's annual report:
"Qualification timescales can be long but once a product and
relationship is established, it creates significant barriers to
entry for competitors."

[sf5] 03/10/2018 10:38

Layman's article on 5G and AVs here
Seems there's arguments between comms experts as to whether 5G is necessary for AVs, though it sounds desirable. (I guess it depends how much communicating with each other, or the cloud, is needed, as opposed to relying on car's own sensors and algorithms.) Also confirms my impression that we're many years from widespread adoption of AVs - Ordnance Survey man suggests Level 4 "not in my lifetime".

Challenge is to balance this -ve view against the billions being spent by the auto industry. I suppose we could see L2/3 vehicles appearing at the top end and for some commercial vehicles which will sell because they take some of the strain off the driver in some environments (and are the 'latest hot thing' - after all, who really asked for all this 'lane assistance' stuff) which will lead to a steady rise in the sensor market, without any game-changing moments. The auto industry is a past master at selling people things they don't really need!