3SOF

XRTX – Xyratex Ltd.

Profile:  Xyratex, Ltd. engages in the design, development, and manufacture of enabling technology in support of storage and data communication networks. It provides enterprise-class data storage subsystems and storage process technology.  The company is headquartered in Havant, the United Kingdom.

Fundamental Analysis:
Currently reported(ttm):
P/E: 24.05  
P/S:  1.29
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Industry P/E:  17.13
Industry P/S:  1.12

At first glance XRTX seems over-valued but remember that companies are valued according to their future earnings and this company has a very bright looking future!

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http://biz.yahoo.com/ap/060323/xyratex_stock.html?.v=2

Xyratex Shares Jump on Strong Outlook
Thursday March 23, 12:56 pm ET

Xyratex Shares Jump 19 Percent on Strong Second-Quarter Outlook

NEW YORK (AP) -- Shares of Xyratex Ltd. rose sharply Thursday after the British storage-technology company said it expected second-quarter results would beat Wall Street's expectations.

In afternoon trading, shares of Xyratex were at $31.17, up 19 percent, or $5.06 on the Nasdaq Stock Market.

Second-quarter revenue is expected to be in the range of $268 million to $283 million, with earnings between 83 cents and 93 cents a share, the company said Wednesday after the financial markets closed.

Analysts surveyed by Thomson Financial expect Xyratex to report second-quarter earnings of 56 cents a share on revenue of $218 million. In last year's second quarter, the company earned 45 cents on revenue of $170 million.
Xyratex sells storage systems to computer-hardware vendors that sell the product under their own brand names.

Xyratex reported first-quarter results that showed revenue from sales of storage and network systems increased by 45 percent, whereas revenue from sales of storage infrastructure products increased by only 15 percent.

Punk Ziegel analyst Steven Berg said the second-quarter estimates were based on expectations that storage infrastructure revenue would double, due to increased demand.
On March 8, Xyratex said it had integrated Seagate Technology's disc drives into its storage system.

Xyratex continues to "ramp up its partnerships and beef up its product line," with partners like Intel Corp., and new partners TerraScale and Globalstor, Berg noted. The moves, he said, will drive revenue in 2006 and 2007 as new products designed to appeal to these companies come on the market.
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Annualizing the EPS of the second quarter outlook(using the lower end estimate of .83) gives us an earnings per share for the year of 3.32.  This gives us a forward PE of 9.75!  XRTX has made the right moves and is currently extremely under-valued.

Technical Analysis:

After the second quarter guidance issued on Thursday(3/23), XRTX took off with a huge gap and finished that day with a hammer.  On Friday, XRTX confirmed its hammer by continuing the move and closing above the hammer high on strong volume.  Support up in this area is offered by the broadening channel high which continues to rise strongly.  XRTX also has gap support ~30.  With strong momentum and possible support in place XRTX has the right stuff .

Long-Term:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=18058)

Medium Term:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=18059)

Short-Term:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=18060)

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Our Trade:

This is an aggressive trade to make since it comes after a huge gap up but the valuation gives us our reason and the technicals make it feasible.  From an aggressive trade we expect aggressive(quick and large) returns.

We will buy XRTX @ market open as long as it is under $33.

Bought XRTX at the open at 32.40

so did i, there is a strong fight going on, MM's seem to have a lot of shares on hand

This trade did not start off well.  Is there an exit plan or stop on this trade?

Quote from: Loffigus on March 27, 2006, 04:23:21 PM
This trade did not start off well.  Is there an exit plan or stop on this trade?

This trade started absolutely fine Loffigus.  We are down just 2.31%. ;).. now lets get to our exit plan on this aggressive trade...

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update XRTX:

Today, XRTX found support at the top of its gap hammer.  Hopefully it can bounce right off.  With the forward PE so low and this momentum in the stock we are looking to sell XRTX north of $38.  As this play develops we will be able to better calculate our sell area.  For a stop we'll use the gap as our final support.

We are are holding XRTX and will sell if it is set to close below 29.85.

Quote from: eliteG on March 27, 2006, 07:35:46 PM
...sell if it is set to close below 29.85.

New here, I was hoping for an easy life with 3SOF, but this type of recommendation complicates things a little. For the second day in a row I shall need to stay glued to the computer screen towards the close of the trading day.

What's more, it doesn't really mean the close of the exchange, which is at 4:30 pm, but it means 4 pm, the time when trading of this particular stock ends.

It would be nice to have a recommendation for a clean-cut stop-loss order, but I guess this would limit our profit potential.

Quote from: Maestro on March 29, 2006, 02:29:13 AM

Quote from: eliteG on March 27, 2006, 07:35:46 PM
...sell if it is set to close below 29.85.

New here, I was hoping for an easy life with 3SOF, but this type of recommendation complicates things a little. For the second day in a row I shall need to stay glued to the computer screen towards the close of the trading day.

What's more, it doesn't really mean the close of the exchange, which is at 4:30 pm, but it means 4 pm, the time when trading of this particular stock ends.

It would be nice to have a recommendation for a clean-cut stop-loss order, but I guess this would limit our profit potential.

You have a good point Maestro.  ;)  We had a discussion about that yesterday and we will be moving away from the <<sell if set to close below>> setting.  Not all of our members are available during the market day so a stop or sell on close below would be better.  :)  Just so you know normal mkt hrs are 9:30am -4pm.

update XRTX:

XRTX seems to have plenty of support between 32-30.. and so now its up to the market to realize that this is powerful play.

We will hold XRTX unless it closes below 29.85.

update XRTX:

XRTX is holding support and is maintaining itself above the hammer that came after the gap.  Lets see if it can bounce here soon.  ;)  Plan remains the same.

XRTX also had 2 news items released Monday:

Xyratex Announces Availability of F5402E 4Gb RAID System at SNW 2006
http://biz.yahoo.com/prnews/060403/lam091.html?.v=39

Xyratex Demonstrates Full Range of 4Gb FC Storage Solutions at Spring Storage Networking World 2006
http://biz.yahoo.com/prnews/060403/lam089.html?.v=41

update XRTX:

Nice bounce from support.. volume increased and came in above avg(60ema).  Lets see if XRTX can continue this move.  Trading plan remains the same.

update XRTX:

XTRX has bounced from high support but without convincing volume.. hopefully that volume can come in soon.  Our stop goes up to limit risk.


We will hold XRTX unless it closes below 30.97.

update XRTX:

Great bounce on support.. low volume but it was a Friday in which the market was down heavily.  Support lines are now climbing agressively lets see if XRTX will follow.

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Position: long XRTX @ 32.40 on 3/27/2006
Order: Hold
Exit: on close below 30.97
Target: n/a
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I see that First call has XRTX on the list of DJ Analysts' Highest-Rated Stocks
http://www.amtddj.inlumen.com/bin/djstory?StoryId=CrdSPWaebqLqWmde3mtC

At the moment it looks like XRTX is going to close below 30.97, so what's the game? Sell shortly before NASDAQ closes at 4 p.m., or does XRTX sell during extended hours and sell then?

The moment I posted that last message, the big sell-off started. I wasn't the cause of that, was I?

Out at $29.44...

...and, G, can you see your way to giving standard stop recommendations instead of "unless it closes below..."?

Quote from: Maestro on April 11, 2006, 03:56:36 PM
..and, G, can you see your way to giving standard stop recommendations instead of "unless it closes below..."?

I beg to differ.  stop on close is the best strategy because irratic intraday price movements can throw you out of a stock unnecessarily.

Also you can't wait until tomorrow to sell because sometimes the stock will gap down next day, then you'd have to guess if the price will come up to the gap for you to bail, or not.  This is simply the way the market works.  We'll just have to live with it, as crooked as the market is.

If we have a "stop on print" then it would have to be set low enough to avoid being shaken out but that would cause us to lose more than necessary in most cases.

Quote from: netfishmademerich on April 11, 2006, 04:15:53 PMI beg to differ.  stop on close is the best strategy because irratic intraday price movements can throw you out of a stock unnecessarily.

But how does it work out on average? I only signed up to 3SOF on 20 March 2006 but I see that 3SOF made 195% profit in less than a year, yet neither David Randolph nor Ramsburg seem to have been fond of giving "stop on close" recommendations.

Now, if my online brokers (Ameritrade and E*Trade) accepted stop on close orders, that would be a different thing. Does your broker accept them?

I do see your point, though. Another stock of G's (MSPD) went below his stop on close target intraday today but closed above it. If this stock makes us a profit in the end, it is a good example in favour of the stop on close target.

Quote from: Maestro on April 11, 2006, 04:32:18 PM
Now, if my online brokers (Ameritrade and E*Trade) accepted stop on close orders, that would be a different thing. Does your broker accept them?

No, I also have E*Trade like you.  I sit in front of my computer and watch tick-for-tick my portfolio most of the day.  I think if you can babysit your portfolio the last 30 min. of trading you will be fine.

Quote from: netfishmademerich on April 11, 2006, 04:44:35 PMI think if you can babysit your portfolio the last 30 min. of trading you will be fine.

There are days when I can and days when I cannot. The problem, you see, is that when I get the buy recommendation I do not yet know whether this is going to be stock with a stop on close recommendation.

(I wonder at what time, at what price, G sold XRTX today. We'll see on tomorrow's updated list of closed trades.)

The way I see the pattern developing is that G's buy recommendations will be followed by a stop on close recommendation, while Ramsburg's buy recommendations will later receive a standard stop recommendation.

The ultimate solution for me, then, would be to buy only Ramsburg's recommendations, but that would defeat the purpose of the 3SOF strategy. I am in quandary.

Quote from: Maestro on April 11, 2006, 03:56:36 PMOut at $29.44...

...and, G, can you see your way to giving standard stop recommendations instead of "unless it closes below..."?

My apologies to G. I've come to realize just now that your recommendations "unless it closes below..." and "on close below..." mean that when a stock closes on a given day below that amount I should sell it the following morning at the open. In other words, I do not need to watch the stock every day towards the closing time. I can make that evaluation every day in the morning.

This means that I bailed out of XRTX too early; I should have put in the sell order after the close on 11 April, to be executed at the open on 12 April. Oh well, live and learn!

Quote from: Maestro on April 11, 2006, 06:31:12 PM
My apologies to G. I've come to realize just now that your recommendations "unless it closes below..." and "on close below..." mean that when a stock closes on a given day below that amount I should sell it the following morning at the open. In other words, I do not need to watch the stock every day towards the closing time. I can make that evaluation every day in the morning.

This means that I bailed out of XRTX too early; I should have put in the sell order after the close on 11 April, to be executed at the open on 12 April. Oh well, live and learn!

No Problem Maestro  ;D.. we set our exit strategy a certain way but we dont expect everyone to follow that.  ;)  We are here to create opportunities for you guys.. we failed on this one  :-X but thats how the market works.. you toss the losers out quick and let the winners grow. 

Each exit method has its advantages and disadvantages.  The sell if close below allows us to evaluate the stock one more time before we say we will sell it.  ;) 

I really like this company but the market doesnt really care what I think.. and its always right so we will stick to plan and sell XRTX tomorrow morning.  One to keep on watch.

We will sell XRTX in the morning(Wednesday 4/13).

Hiya G,
I know the plan said out in Morning ... but stock nicely re-couping the slide yesterday.

Would you agree the fundementals still look good for this ?  ???

I think I'm going to hold for a little longer.

Quote from: Gillham on April 12, 2006, 03:04:52 PM
Hiya G,
I know the plan said out in Morning ... but stock nicely re-couping the slide yesterday.

Would you agree the fundementals still look good for this ?  ???

I think I'm going to hold for a little longer.

Definately agree Gillham.. fundamentals do look good.. I think we should consider it for 3SOV  ;)

Xyratex Looks to Improve Product Mix
with 13% Increase in Network Storage Systems
Trading on Xyratex Ltd (XRTX) was up 9.947% following Thursday's
earning's call in which the company reported Q1 revenues of $217.05M,
down 8.19% from a year ago and beating consensus by 0.74%. Q1 EPS
was -$.-07, down 117.50% from a year ago and missing consensus by
800.00%. Revenue in the second quarter of 2008 is projected to be in
the range $232 to $252 million. The Q2-08 revenue forecast is above
current consensus estimates. During the conference call, the company
stated that a significant sequential reduction in revenue was the result
of the current environment surrounding capital expenditure spending
constraints, which it previously outlooked in the HDD industry. Gross
margin reductions within the quarter were the result of reduced revenue
from its infrastructure division, although strong revenue contributions
were reported from its major tier one customer in Net App. Additionally,
Xyratex reports that it is starting to see capital expenditure spending
coming back to the hard disk drive market with better volumes in
Q1 than originally forecasted. Currently, the company is forecastsing
13% increase in the Network Storage Systems business, which is a mix
between Net App and non-Net App. With gross margin trends on the
system side at a 30 basis point decline sequentially, a 2 point mix shift
decline is related to product mix in Net App and Non-Net App. Going
forward, the company sees new relationships with IBM and new tier one
opportunities as a way of addressing customer concentration issues.
According to CEO Steve Barber, "If that side continues to grow, expect
to see margins grow in the range we're seeing today."



52wk Range: 13.34 - 24.75
Volume: 894,236
Avg Vol (3m): 218,673
Market Cap: 520.03M
P/E (ttm): 18.98
EPS (ttm): 0.94

Technicals
Last Price Quote is:
0.66%above 13-day MA
2.14%above 50-day MA
RS Rating: 92 

Fundamentals
Key Data:
Market Cap (M): $521.76 
P/E Ratio: 33.86 
PEG Ratio: 1.096 
Next Earnings: 06/25/2008
Last Analyst Rating: Outperform

Poorly run company.......
in the midst of a pretty major sales decline and it isn't going to simply go away in a single quarter.
Their products are good,
but their customers are not buying like they were.
Sales declined in the most recent quarter and it created a huge drop in profits.

XRTX

here is the update chart of XRTX