SMTC Corporation (SMTX). The Group's principal activities are to provide advanced electronic manufacturing services to the electronic industry and original equipment manufacturers worldwide. The Group's services include product designing, procurement, prototyping, assembly, test, comprehensive supply chain management, packaging, global distribution and after-sale support. These services are provided through eight manufacturing and technology centers located in the United States, Canada, Europe and Mexico. The Group has relationships with over 50 Original equipment manufacturers. The customers include IBM and Alcatel.
Of course, what attracted me in the first place to SMTX wasn't the financials, but the chart, take a look at this advance phase:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=4515;image)
Did it rose 200% in a few days? Great, investors are perceiving a big difference between the market value of the stock and its fundamental value.
Even if I had a lot of time I wouldn't go very deep into the company's financials. I like to see value at first glance, if I had to dig a lot to see the value, others will have to do that too to buy the stock, and that way it would be harder to gather bullish steam.
At first glance, what do I see?
I see sales for the second quarter of about $57M, extrapolating that for a full year I get about $228M in sales and a market cap, at current prices, of 14.6 million shares*$3.17 = $46.28M, so the price to sales ratio is about 0.2.
Maybe something's wrong with this math, but considering the chart, maybe not ... earnings have also rebounded, from a big loss in the first quarter to a small profit in the second quarter.
Looking at the long term chart, I know where this advance phase will probably stop and where I'll be looking to sell my position:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=4516;image)
About $6 looks fine. I'm buying SMTX at today's open for the 3 Stocks on Fire Portfolio.
(This recommendation was made by David Randolph from 3 Stocks on Fire, and he will update this analysis everyday after the close until he sells the stock. 3 Stocks on Fire is a Community of stock traders and investors. Our 3067 members exchange trading ideas and strategies on our message boards everyday. We welcome you as a new member of the 3 Stocks on Fire Community, please take 10 seconds to register (http://www.3stocksonfire.org/trading/index.php?action=register) and receive our free newsletter)
In @ 3.00.
Great pick David!
From Yahoo:
One to watch: SMTX SMTC Corp follow-up (2.72 +0.48) -Update-
Haven't done any due dilligence on this one, just saw that stock spiked and momo guys started talking about it. This is what appears to be moving it: "SMTX was $0.87 2 weeks ago and reached $3 this week, with a correction today to $2.24. SMTX is no ORDINARY small float stock (6 MM share float) here's why: -SMTX achieved $3.7 MM POSITIVE CASH FLOW in last quarter and published guidance for IMPROVED RESULTS THE REST OF THE YEAR. Thats over $15 MM annualized cash flow!! If SMTX traded at a typical 10 x cash flow it would be an $11 stock... SMTX has over $250 MILLION in annual sales and trades at a Price/Sales ratio of 0.08 compared to 0.54 INDUSTRY AVERAGE and has a tiny 6 MM float. 2.5 MM of the 6 MM float is institutional owned, so the "available" float is 3.5 MM."
David, great pick!
Was looking at this one over the weekend for a longer time investment, but didn't have time till now to look again. Great for all getting in at opening :) . Nice development so far. Not sure to get in right now still at app. $ 3,59 or await the day a little. Can't really explain the fast development from opening today.
Any opinions on that? Would really like to hear. Any others still considering to get in now?
Look forward to some discussion.
Amarens
again wonderful pick (unfortunaltey I was fully invested)
:'(
Saw it late... so missed the opportunity to buy it. >:( Now I will wait for a pull back ( if it comes) to get in.
P
Today will be the 10th consequtive trading day for SMTX to close above $1 and hence will regain NASDAQ compliance, paving the way for more money inflows from institutional investors. Applying industry P/S of 0.5, this stock should fundamentally be valued at $7.50 - $10.00, provided of course it gets by the resistance points. It will be a good long term play also!
Dang! I was in at 2.8 and out at 3.2 on friday. I took it off my screen this morning when it dipped under 3. Might buy back in if it pulls back.
Bought in today and looking for a continued run. It sure seems to me that it has legs.
In @ 3.10, out @3.75 yesterday.
Will look at buying again on a dip today.
Thanks for your comments on SMTX, I learn from them. Yes, SMTX is no ordinary low float stock being pumped (wait a minute, low float means nothing, low market cap is the correct thing to say and consider).
This stock was just too cheap and it is correcting its undervaluation in rage. I don't see this fundamentally and technically backed advance stop anywhere south of the first important resistance level, which will come only at values above $6.
Actually I enjoyed the last minute dip yesterday, this means SMTX can open higher today without any gap up. Maybe it will fall on profit taking, but candlesticks and volume numbers don't suggest that outcome for the short term.
I wish to take profits at $6, about 100% above my purchase price and it will take a lot of downside to shake me out of this stock, just for the simple fact that any sell off will be met by demand from bargain hunters, given the very attractive valuation measured by the P/S Ratio.
In @ 3.16, nice and healthy pullback
chart:
Quote from: starfire on August 29, 2005, 01:53:55 PM
Today will be the 10th consequtive trading day for SMTX to close above $1 and hence will regain NASDAQ compliance, paving the way for more money inflows from institutional investors. Applying industry P/S of 0.5, this stock should fundamentally be valued at $7.50 - $10.00, provided of course it gets by the resistance points. It will be a good long term play also!
good price target
please can you chcek this stock
i think this Triple Bottom
gonna watch the action tomorrow..
the stock has gone up in 2 days and then consolidating in 2 days two times before and this time (third time) it again did go up in 2 days, so Im expecting another consolidating day tomorrow to get another upday on thursday
I said it would be hard to shake me out of this stock, but of course, not impossible, when it is needed I throw down the towel like everybody else.
I've made a simple trading plan to follow (the hard part is to have the discipline to always follow it), so I don't have to do much thinking now. I like to consider and weigh everything before I buy the stock, and then let the market judge the trade.
The plan is to sell with a profit around the $6 plus long term resistance level. To serve as a safety net, I have an ascending trendline, which for today will be standing at $2.49 (rising $0.14 everyday, so it is very steep)
Quote from: Pete on August 29, 2005, 01:41:07 PM
Saw it late... so missed the opportunity to buy it. >:( Now I will wait for a pull back ( if it comes) to get in.
P
Got the pullback I wanted. Picked at 3 this morning. Seeing some green. ;)
P
good healthy pullback and consolidation. Picked some up at 3,10
some daytraders got a nice ride yesterday from 2,92 to 3,58 :)
For today the ascending trendline will stand at $2.63, the target is $6, just keep the plan and ... the stock !
You can't see it on the chart below (it is updated with yesterday's close only), but SMTX is up 7% at this hour. Doesn't mean anything, I don't take any conclusions from intraday (well, I try not to, but my 7 years as futures day trader sometimes show up on the analysis - with not so good results I might add).
Wow, just as I was writing, SMTX popped to +13% (it's inevitable, when you're updating analysis with the market already open, that's why I like to do it with the market closed).
Jesus, 17% now, to a new high ... ok, about $6 is the target, it's obvious I will continue to hold the stock.
LOL, if only every update you did had that effect on the price of a stock.
Quote from: David Randolph on September 02, 2005, 10:26:04 AM
You can't see it on the chart below (it is updated with yesterday's close only), but SMTX is up 7% at this hour. Doesn't mean anything, I don't take any conclusions from intraday (well, I try not to, but my 7 years as futures day trader sometimes show up on the analysis - with not so good results I might add).
Wow, just as I was writing, SMTX popped to +13% (it's inevitable, when you're updating analysis with the market already open, that's why I like to do it with the market closed).
Jesus, 17% now, to a new high ... ok, about $6 is the target, it's obvious I will continue to hold the stock.
The stock ended up just 1.8%, so we see how futile is watching the intraday ::)
I went back on this thread to see if I had made a trading plan, and of course I did:
QuoteThe plan is to sell with a profit around the $6 plus long term resistance level. To serve as a safety net, I have an ascending trendline, which for today will be standing at $2.49 (rising $0.14 everyday, so it is very steep)
For today the ascending trendline (safety net) stands at $2.90, if the stock is set to close below this level I'll take a small loss and move on. If not, I'll be looking to sell at the $6 target.
In case any Canadians haven't figured it out yet. SMTX trades on the TSX as SMX. ;D
again a Doji (http://stock-diary.blogspot.com/2005/09/doji-play-smtx.html").. I guess daytraders are having fun here...
What to think of 4 doji's (http://stock-diary.blogspot.com/2005/09/doji-play-smtx.html"") in a row?
Quote from: nikao on September 07, 2005, 05:26:57 AM
again a Doji (http://stock-diary.blogspot.com/2005/09/doji-play-smtx.html").. I guess daytraders are having fun here...
What to think of 4 doji's (http://stock-diary.blogspot.com/2005/09/doji-play-smtx.html"") in a row?
I think this is a consolidation phase nikao, the market is digesting the enormous run the stock had before it continues trading higher.
Yesterday I wrote:
QuoteFor today the ascending trendline (safety net) stands at $2.90, if the stock is set to close below this level I'll take a small loss and move on. If not, I'll be looking to sell at the $6 target.
For today the safety net stands at $3.08, so now probably I won't lose money trading SMTX (my entry price was $2.95). Though I only act with prices near the close, I don't trust intraday technical signals.
It is possible for SMTX to trade sideways until it is met by the ascending trendline and then push to a new high. The ascending trendline rises $0.14 per day.
QuoteIt is possible for SMTX to trade sideways until it is met by the ascending trendline and then push to a new high. The ascending trendline rises $0.14 per day.
The ascending trendline rises $0.14 per day and for today it will stand at $3.23. Hopefully SMTX will bounce from a touch on that trendline support.
If it doesn't bounce, if it is set to close below $3.23 today, I'll sell, taking a small profit, because of the technical sell signal.
Hi David,
SMTX closed at $3.21, just wondering if you sold today. I am still holding, not sure which way it will go at this point. Whatcha think?
Thx as always,
JB
I'm curious about David's take as well.
Today's close right below the trendline doesn't seem definitive. Action today no doubt took out a lot of stops, leaving shares in the hands of stronger longs. Tomorrow could continue support of the trend, no?
hold or sell?
chart:
Quote
If it doesn't bounce, if it is set to close below $3.23 today, I'll sell, taking a small profit, because of the technical sell signal.
It closed at $3.21, I wasn't around to see, but I say sell.
I'm also turning short term bearish on the general market, don't like recent developments, so I'll dump shares at first sign.
I will sell SMTX at today's open or little after.
hmm, Do you use a linear chart? I can't seem to be able to draw the same trendline as you on the stockcharts.com chart ;)
http://stock-diary.blogspot.com/2005/09/down-but-strong-smtx.html
For me the stock is still showing strength; it opened right at the trendline I see (at 3,00) and closed in the green.
Also the volume is still very low compared to the volume on the Up movement..
still holding!
Quote from: David Randolph on September 09, 2005, 06:07:07 AM
Quote
I'm also turning short term bearish on the general market, don't like recent developments, so I'll dump shares at first sign.
I will sell SMTX at today's open or little after.
So whats the recommended strategy now? Buy / Sell / Hold FOR OTHER STOCKS?
Also whats your take on the oil bubble and oil related stocks?
I am holding this one as long as $3 provides its support. $3 is a key pysch number that has held OK for 2 weeks or so now, but the stock needs to react off of $3 soon for me rather than just resting on it.
Quote from: AussieTrader on September 13, 2005, 12:02:28 AM
I am holding this one as long as $3 provides its support. $3 is a key pysch number that has held OK for 2 weeks or so now, but the stock needs to react off of $3 soon for me rather than just resting on it.
Im holding as well. Yesterday we went down to even 2,84.. but just when I was about to sell it surged back up above 3.... so I'm still in ;)
open at 2,81 got me a little scarred I must admit, but right about the time I thought..that's it.. Im out, it surged up again to an high of 3,22! to close at 3,12 which made me happy again..
so Im still in :)
I have smtx at $3.24. ouch!...It has dropped drastically today on low volume. Does anyone have an opinion about this stock? I'm new to this board. Help!
david it might be a good time to get back into smtx 3 white candles even though vol. stinks regards
Keep a watch on SMTX. Traded up 18% yesterday on 2.5x average 10 day volume. Top 5 Nasdaq percentage gainer. As high as 2.88 in AH making total 30% gain yesterday. Could gap up this morning. However, all this on no news. ??? Could be time to test metro's gap up strategy at the open. Trade as you see fit.
actrader
Am I missing something here. Down 50% off it's high yet last quarter was second positive quarter.
David, just wondering what you think. Much appreciated!
uc.
Unfortunately I never sold SMTX, and now it's 1.48. Does anyone have any advice?
Jumped in SMTX after hours. Great Earnings report. ;D
The stock has been trading sideways for the last year.
http://biz.yahoo.com/prnews/070313/to452.html?.v=13
Reports double digit growth in revenues and record earnings
TORONTO, March 13 /PRNewswire-FirstCall/ - SMTC Corporation (Nasdaq: SMTX, TSX: SMX) ("SMTC"), a global electronics manufacturing services provider, announced today its results for the fourth quarter and year ended December 31, 2006 which are expressed in US dollars.
Fourth quarter and full year highlights
- Growth in fourth quarter revenue to $76.1 million, a 31% increase
over fourth quarter 2005.
- Net income of $2.1 million for the fourth quarter, an increase of 49%
compared to the fourth quarter of 2005.
- EBITDA(x) of $5.3 million in the quarter, representing a 66% increase
over the fourth quarter of 2005.
- Growth led by strengthening diversified customer base of both
long-standing and new customers.
- Full year revenue of $262.8 million, an increase of $34.0 million, or
15% over 2005.
- Record net income for the full year 2006 of $10.5 million, including
one-time items of $5.0 million compared with a loss of $0.1 million
for 2005
- EBITDA(x) of $16.0 million for the full year 2006, representing a 78%
increase over 2005. The full year EBITDA(x) for 2006 excludes the
impact of one-time items.
SMTC Corporation reported revenue of $76.1 million and net income of $2.1 million, or $0.14 per share, for the fourth quarter ended December 31, 2006, compared with revenue of $58.1 million and net income of $1.4 million, or $0.10 per share, for the fourth quarter of 2005. Revenue for the year ended December 31, 2006 was $262.8 million and net income was $10.5 million, or $0.71 per share compared with revenue of $228.8 million and net loss of $0.1 million, or $0.01 per share for 2005.
Gross profit was $7.7 million, or 10.1% of revenue, and $26.4 million, or 10.1%, for the fourth quarter of 2006 and year ended December 31, 2006, respectively. This compared with $4.9 million, or 8.4% of revenue, and $17.1 million, or 7.5% of revenue, for the fourth quarter and year ended December 31, 2005, respectively.
"Our strong fourth quarter results cap a very successful year for SMTC. For the first time since the year 2000, the Company grew year over year revenue reflecting a combination of growth from long-standing customers and the effect of new customer additions in 2005 and 2006", stated John Caldwell, President and Chief Executive Officer. "As important, SMTC produced seven consecutive quarters of profitability culminating in record net income for 2006."
"Strong fourth quarter and full year gross margins reflect the strength of our business model and continuing diligent cost containment measures", stated Jane Todd, Senior Vice President Finance and Chief Financial Officer. "The Company generated significant cash flow from operations which was invested in working capital and assets to support current and anticipated future growth."
Only concern is debt and possible dilution coming. ???