STEC popped up on my Bull List filter today with a very attractive bullish stock Chart in conjunction with some positive growth and appears to be undervalued at its current trading prices. STEC had a huge year in 2006 which lead to its pps jumping from below $4 to a high near $13 in around 6 months time. Though as STEC’s 07 numbers began to slide so has the stock price nearly cutting in 1/2 to its low in mid 5’s.
Analysts are expecting a big jump in revenues/eps for 2008 with a 29.2% gain in revenues and a massive 168% climb in EPS setting up a low forward P/E of just 16x earnings compared to the industry average of 30x making STEC look fairly undervalued at these prices given its expected growth and the chart looking to make a bullish reversal from a technical analysis standpoint. Given that STEC was fairly valued in the Semiconductor industry we could expect its share price to be trading around $15.30/share as its 08 estimates are .51 eps and the semiconductors are trading at an avergare 30x earnings multiple. STEC is a very financially healthy company with 100m in cash and an outstanding current ratio of 8.40 compared to the industries slim 1.7.
Chart and Company both look awesome here and pulling 20%+ on this trade shouldn’t be a problem in my opinion. Technically the stock has made a very strong move from around $6 - $9 in a short period of time so i expect some profit taking, especially since price just tapped out near $9 resistance after todays 20% rally. Price is down slightly currently AH, i think buying this in the low 8’s is a good bet we should be a part of.
I’m looking to buy STEC in the Low 8’s 
