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:


Medium Term:


Short-Term:


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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?