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| Nikos on Calix: Not Really a Sell |
| Tuesday, 05 April 2011 07:20 |
 S___ happens. Nikos Theodosopoulos, probably the best equipment guy on Wall Street, did not issue a rare sell on Calix early this morning. His Tuesday morning email said just that, but clicking to the report itself shows his actual opinion is "Valuation: Maintain Buy Rating, Raising PT To $23 From $20." The report goes through several hands before it's sent, and somewhere along the line someone made a mistake. I'm sure they are scurrying at UBS to correct things but I wanted to put this out immediately to prevent confusion as the market opens. I'll follow up later today. Researching pointed me to a 58% increase in the Calix stock price in about four months. They've had some good news, but that's a remarkable run. I'll let Nikos tell professional investors whether to buy or sell this one; for anyone without a strong tolerance for losses, I wouldn't put money, long or short, in wireline telecom equipment. It's a tough and declining market, and there definitely will be losers as well as winners.
Calix's greatest strength is satisfied customers. Thay've now bought Occam, which also has excellent customer relations. Those are strong positives, but it's a tough market for all and caution is indicated.
1:30 Tuesday The stock fell over $25M by 11 in an up market. It since recovered some. The only other visible news was that Goldman raised their "12-month price target to $21 from $19 based on a target P/E multiple of 19X applied to our new FY12 EPS estimate of $1.11."(Benzinga.com) That pattern is consistent with people initially misunderstanding the UBS report and then learning better. Alternatively, it may be that investors were hoping for even more favorable news and were disappointed. Or it could just be the seemingly random noise that often dominates stock prices.
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| Last Updated on Tuesday, 05 April 2011 12:39 |