Article on UBNT should anyone be interested. It is one of my larger positions and I am either adding now or waiting for a move back up so I’d love comments on today’s price and this article.
Thanks,
Mykie
http://seekingalpha.com/article/2688135-avoid-ubiquiti-netwo…
Hello Mykie…and all the board followers:
This is my first post on this board. I’ve been lurking for months (and rather enjoying the conversation). Thought it was time to say hello.
I’ve not acted on most of Saul’s positions for a variety of reasons…mostly because I’m rather selective about the companies I find interesting. I did take a small position in PFIE, made a tidy profit, but sold because states are moving to curb flaring (and flaring constitutes a goodly portion of PFIE’s services).
I did, however, invest in UBNT. In truth, I took an over-sized position. I rather like this company’s prospects.
Fidelity is my broker and I use its research tools extensively. One of my favorite analyst reports is the “Thomson Reuters I/B/E/S Estimates Earnings Valuation Report”. I like it because it synthesizes a great deal of information.
As far as UBNT goes, what’s not to like?
Expected Annual Growth Rate: 40.2%
PEG Ratio: 0.84
Annual EPS Trend: Positive
Granted, I’ve merely glossed over the numbers, but I like 'em all. UBNT, in my world, is a “high expectations” stock. I’ve had reasonable good luck investing/trading in high expectation stocks (most notably CREE which has been a 5-bagger for me). The story goes something like this: the company reports earning that would be considered fine by conventional norms. The stock suffers a sell-off ('cuz the expectations were higher). Next quarter, the company again reports solid earnings. Stock climbs higher. Lather, rinse, repeat.
As matters stand now, there’s 11+% short interest in the stock. I rather like that. It might take a three month wait, or longer, but I believe UBNT will continue on its growth trajectory. Thereupon the shorts will cover and I’ll reap the benefits.
I’m comfortable with my overweight portfolio position in UBNT. I’m patient. I’m patient because experience has taught me that patience is a virtue.
Hi Mykie,
I personally think UBNT is priced with zero growth but the reality is that this is a very strong growth story, one that will play out over a longer time horizon than the usual 6 to 12-month interest period of analysts. I continue to hold my position.
When the 2017 leaps become available, I will consider adding via Deep In The Money calls. These calls essentially let you mimic stock exposure with less capital investment upfront, with the caveat that i) you have a predefined and limited time duration available for the thesis to play out (2.5 years or so if 2017 calls become available), and ii) you can loose your full (smaller) investment if the stocks is below the strike price at expiry. The reason I 'm considering calls versus stocks is that I already have enough exposure to UBNT. So I can “play” a little via LEAP calls but I 'm not willing to substantially add to my position.
The thing to remember is that no investment is a sure shot to glory. There’s always some risk and for a small cap like UBNT the risk is higher IMO compared to safer plays like AAPL.
So, there, that’s just one opinion among the many.
Anirban
So, there, that’s just one opinion among the many.
Anirban
Thanks Anirban and Putnid and welcome Putnid.
I agree and love to use options but I have a smaller position so I’ll probably sell some puts while the price is so low. Even that would allow me to buy a LEAP so maybe I’ll do both to try and increase my position and make some income.
Mykie