|Sleeping with Uni-Pixel|
|If it smells fishy, the fish is probably bad.|
Highlighted below are comments from Cody Acree about Unipixel, an analyst (pumper) from The Williams Financial Group.
"While some investors undoubtedly got themselves worked up coming into the earnings report, hoping for another major announcement to drive shares higher, we heard pretty much what we expected, particularly following all the recent news surrounding the ecosystem partner, Kodak, and the secondary.
My question: What kind of analyst includes in his comments, an opinion, on what other investors are thinking?
Instead, we believe UniPixel delivered a solid update on its dual-site capacity ramp, progress to reaching volume production orders from its PC partner, and its intermediate term goal of having sufficient capacity to supply 10 million units per month by the end of 2014.
My question: Why would an analyst raise Uni-Pixel's price target when it is unclear of a company's ability to meet both production of their "product" and the effectiveness of the "product"?
Here is the rest of Acree's comments. Everything in Acree's analysis is based on conjecture rather than substance.
While the firm’s potential is significant, we wouldn’t be surprised if, in the near-term, shares remain highly volatile (but with higher-highs and higher-lows) as investors work to digest the full short- and long-term implications of all of the recent announcements. Additionally, the secondary is causing dilution, questions of timing, and the subsequent reduction of ours and Street estimates. Finally, in our opinion, the unusually wide dispersion of current 2014+ estimates among a very small analyst base is creating substantial confusion & uncertainty among investors, causing some to step aside. Ultimately, we believe the volatility will be offset by execution, but in the meantime, with an unusually high short-interest, significant price swings are likely to be the norm.
Although not for every investor, particularly the faint of heart, we reiterate our Buy rating and our $60 target price, or 14.9x our new FY14 EPS estimate of $4.01.