Iqe Share Discussion Threads

[sailastra] 08/12/2018 00:30

Lucky mouse, makes interesting top down comments. We want bottom up here i.e Iqe and it's technology.
Kazoom
I have just read your post above, first time I have bothered to read your input, sorry I didn't reference you

Without surprise you are right, IQE need to make profits. You don't need to think it, that is manifest,!!!!

[kazoom] 08/12/2018 00:05

lord loads of lolly

kazoom - I hold IQE and think your summary is pretty fair. Just wonder where the <2p EPS figure for 2018 comes from? (I know 2018 EBITDA is now forecast at around £31M)

Thanks lord loads of lolly, just my view but it is an honestly held one.

Re the EPS forecast my workings were that the £31m EBIDTA compared with a previous forecast of £44m and that the £13m reduction must fall straight through to PBT which I worked through to an EPS of 1.8p.

Shortly after I did the calculations Edison produced a new note concluding much the same.



Which gives a 2018 PE of c. 40x

Strangely though if you go through Edison's homepage this report does not show up, not sure why that is.


Oh & sailastra,

I'm not sure if you are addressing your comments to me? But to be clear, I am not negative at all in the long term (except in the sense of now being more cautious about wanting to validate the "jam" that will be coming tomorrow).

My "bear case", if that's what I inadvertently made, is simply that the 2018 results released in March will show :

> Declining profit and EPS.
> A P/E ratio of 40x (current price & based on the above.
> Poor Cashflow (I haven't actually done the numbers here, but the reduced EBITDA above will largely drop to cashflow.

Those that have read up on IQE can explain away all of those points, but it won't be hard imho for the shorters to construct an easier to understand narrative for the wider market.

I think it will take actual booked profit and banked cash improvements to change the mood here now, so imho (and I might change my mind!) a postive H1-19 and FY-19 looks the earliest to see a sustained change of mood.

[sailastra] 07/12/2018 23:55

I am not suggesting that those in trouble should hold on. My average price is way below here. I am cashed up and lucky in that, I have not been tempted to buy by the resent falls but will bide my time. We are devoid of news. Never a good time to decide
especially given that news is likely like everything today....To be fake.

[sailastra] 07/12/2018 23:36

There are plenty of reasons why the share price has fallen but they are due to short term overvaluation. What interests me is your long term negativity and your understanding as to why the future is negative. To date you have collectively made no case other than scepticism.
The future of this company remains a few years ahead, profits will only and have only ever been expected some years away. It is called the future. I have held for some years in anticipation.. World markets are in turmoil for sure. And the good, the bad and the ugly are getting hammered. I intend to hold. And will buy more when the uptrend returns...

[hoverflyman] 07/12/2018 23:21

Lucky Mouse you’re a bit late to help me with this share but over on VRS we’ll all be getting a bit over excited in say 2-3 months. Come over and see if you can save any of us then, we’ll be in the mood for a good laugh :)

[lord loads of lolly] 07/12/2018 23:19

kazoom - I hold IQE and think your summary is pretty fair. Just wonder where the <2p EPS figure for 2018 comes from? (I know 2018 EBITDA is now forecast at around £31M)

[sailastra] 07/12/2018 23:08

I would like one of you to articulate the bear case. Rather than repeat a no can do. What do you understand about the negative?

Peace by peace do your best, I suspect you have nothing material.

[kazoom] 07/12/2018 22:14

I come in peace!

But possibly leave in pieces. ;-)

I think the negative reaction to LuckyMouse's posting is overdone and to be honest to me seems to somewhat prove point.

The out of hand rejection of opposing views is part and parcel of that harmful crowd behaviour.

My view is that the longer term investment case for IQE absolutely remains intact and if your interest is in the value of the shares in say Dec-2020 (as many profess) then all is fine and if anything maybe the bull case has in fact got stronger.

But nevertheless even some of the more sensible posters for whom I have growing respect, get very depressed (angry even) when the share price goes down a few percent. And when it goes up a few percent we get the same old "now is the time", "the shorters better cover now", "I wouldn't want to be out of this" , blah, blah.

If you are only interested in the longer term view and are still personally confident that view is still intact then of course you can safely ignore what LuckyMouse has to say, just as you can safely ignore some of the fantasy nonsense spouted by the shorters.

However, for me, I'm looking to maximise my returns so I want to invest when the odds are most in my favour.

I sold part (but sadly not all) of my holding earlier in the year when it was clear (belatedly) that momentum was poor at prices of £1.1x. I started buying back from the end of September through to early November and ended up having bought back c. 2/3rds of the shares I previous sold at an average price of 90p.

I was buying back because the momentum had turned and because we were nearing one of the magic points on the pathway - the December trading statement which would confirm what a good year 2018 was. If things had gone to plan, this was imho an excellent time to be buying, post the trading statement would have been well North of £1.

But I underestimated (perhaps even ignored) the short term risk of an over-reliance on sales to Apple. In part this was a fixation on the upside and maybe also to a degree crowd reinforcement.

So at the bad news I sold at 72p (for a loss of c. 20% on those bought back). Despite the share price having recovered, although now sitting at around my sell price, I think that was absolutely the right thing for me.

Whilst the Apple news was bad beyond anything that we could have maybe have imagined, the thing about the worst case happening is that it is still possible for things to actually get worse.

Also I am not convinced, despite the sharp falls, that the market has fully digested the fact that 2018 earnings will be < 2p / share and that cash flow will be worse than expected. All things being equal I think that the actual results could see another fall, after all the more credible claims from the shorters were to call into question IQE's ability to generate profits and cashflow and at best it will be case not proven come the results.

Even if they have been overly cautious and earnings come in a few tenths higher, they will still prima facie be poor.

The nearly year long down trend remains intact and, if continued, by results day the resistance level will be around the current price.

I just do not see what can happen between now and results to break that downtrend. Of course they might announce unexpected progress on one of the many further opportunities that have been flagged on this board, but I suspect the cynics and the hard-nosed market would only see "jam tomorrow".

There is of course the risk of a material short term upside that I have overlooked. That's always a risk, but I feel confident that the odds are in my favour.

So, whilst I am full of admiration and thanks to those of you identifying the many significant opportunities in which IQE should prosper, coming back to LuckyMouse's contribution, I am not going to partake of the group think that considers they have anything whatsoever to do with the share price between now and the end of March.

All of course just IMHO and I COULD BE WRONG.

If I do prove to be wrong and miss the boat (one doesn't necessarily beget the other) then I will happily come back and congratulate the faithful.

In the meantime I'll continue to take on board the views of everyone (well, excepting obvious trolls)

GLA

[bocase] 07/12/2018 19:58

Luckymouse:

I would agree totally with Richard77. Of course what you say is right but we do not need or want to be lectured to. I hope you are not a vegan. You would be unbearable.

If you have spotted an article we have missed or have so information on IQE then we would love to hear it otherwise, as Richard says, why are you here?

Don't bother replying as I won't.

[tomduck] 07/12/2018 18:17

Exactly, it’s probably Regas’ alter ego

[richardc77] 07/12/2018 18:16

Well thought out? Lol, as Tom rightly says, what does it actually say? Virtually nothing of consequence or meaning, just mumbo jumbo about gurus and message boards. Tell us about IQE, the market, 5G, 3D sensing, etc either positive or negative if you want to be of use.

[regasclockwork] 07/12/2018 18:12

LuckyMouse7 Dec '18 - 17:34 - 23452 of 23452
0 1 0
"The overwhelming number of likes achieved may indeed represent one posters popularity."
"But it also represents a crowd behaviour where a moonie like culture has developed."
"Which means a madness of crowds phenomenon has occurred - which means stone cold objectivity has been lost - which means basic trading rules have probably in all likelihood being broken enmass." -End-

Couldn't agree with you more LM and the rest of your post is well thought out. I'm sure you'll get some negative response, but I'm the first to give you a 'thumb-up'. I'd double it but the 'system' won't allow me to do so.

I think bocase's "Cheap as chips under 80p" is certainly a lot more realistic than that 185p which got the pulses racing and the wallets opening, but that won't get him 50 or more 'thumbs-up' as it possibly did for the 185p man. Not that bocase is looking for admiration as he's a down-to-earth sort of chap. GLA!

[jamesrowe] 07/12/2018 18:02

I completely agree about the larger global trends: VCSELs for automotive, VCSELs for networking as part of massive 5G comms rollout, compound wafer use rising exponentially in many markets for power, IR, etc. etc. No one company will have a monopoly but just having a decent market share in many rapidly growing markets should be possible and reduces risk of disruptive news from one market. Even in the phones market where phone sales growth is slowing/peaked the fact that only a small percentage so far use VCSELs means that there is massive potential for VCSEL growth for phones. Even for wireless which is mature, technology changes mean future opportunities for potential margin growth. Technology growth stocks tend to be very high risk but within that some are higher risk than others.

[tomduck] 07/12/2018 17:58

This is not a frenetic board Mouse, go and check out VRS board or many others and as usual you say something but nothing. Filtered so I don’t have to listen to more “nothing”; and don’t have to keep calling you names ;)

The “guru” has posted a couple of times in the past 6 months, and the bubble burst at £1.80 so what you see now is people investing in fair value to make lots of money in the future. Most of us are not here for short term either.

My stone cold objectivity and opinion on IQE is based upon their coming earnings, my research into sectors and competition and I shall do quite nicely, but thanks for your apparent concern!

Now jog on...