Dear GTAT Analyst Communtiy: Why Even Bother Covering The Stock?

Posted: February 25, 2014 by mattmargolis24 in My Publications
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Matt Margolis – 2/24/14

I’m not an analyst working for an investment bank and I will probably never be one.  Today GT Advanced Technologies issued their Q4 2013 financials and gave investors an update to the progress of various segments of their business including Mesa.  GT’s management also magically upped 2016 earnings from $1 to $1.50 without flinching and without giving anything new and specific to support these assumptions.  I believe GT’s management gave them a revised outlook for 2015 and 2016 just because the investment bank analysts covering GTAT needed a bone to chew on, because in my opinion, they just can’t figure it out themselves.  

So far I have looked at 2 reports (Bank of America and Canaccord Genuity) and both appear to have “plugged” in $1.48/$1.52 EPS in 2016, without actually thinking about what they are doing.  Canaccord and Bank of America can’t provide a original forecast for GT if their reputation was on the line.  If Canaccord, stopped to look at their 2014 Q3 and Q4 revenue estimates compared to their 2015 and 2016 FY revenue numbers they would realize that they underestimated revenue by a factor of 2x and earnings by at least 2-3x for 2015 and 2016.  But hey, I’m just the Obscure Analyst who is dancing in step with management trying to figure out their next move. 

One thing that is clear Tom Gutierrez – President and CEO is following recent events brought to light in Mesa, AZ.  None of those revelations or original content was provided by the investment bank analyst community that covers GT Advanced Technologies.  These analysts are doing a disservice to the investment community by failing to do their homework and understand GT’s entire business portfolio, as well as GT’s latest trends and technology improvements.  TG made a direct statement regarding the recent buzz in Mesa just prior to the Q&A section and he was obviously not addressing the robot analysts that cover his company. 

Before we go into Q&A, I want to say that we appreciate the significant interest level on the part of investors and analysts to understand our build out in Arizona. As I noted last quarter, we are not in a position to give extensive information about this project. We are Harbor committed to keeping our investors as informed as possible within the bounds of our confidentiality obligations.

I’m going to continue to do what I do best and share what I know with anyone who wants to listen.  My next two immediate homework assignments to share with all of you are below.

#1 I am working on a real investment research report that shows some basic understanding of GT’s business as well as the prospects on the table to give legitimate revenue and EPS forecasts for 2015 and 2016. 

#2 I’m going to spill the beans on what I believe to be the “star” attraction of GTAT’s March 14, 2014 conference on New Product and Technology Briefing. 

To Tom Gutierrez GTAT President & CEO – If you are following the Obscure Analyst I’m just giving you a heads-up that the room on March 14, 2014 might already be buzzing before you even deliver the sacred cow.

To My Readers – Thank you for support and I will continue to inform anyone who wants to listen and continue to push the analyst community to do roll up their sleeves and do some homework for once!

Regards,

Your Obscure Analyst

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Comments
  1. Gregg says:

    Hi Matt, thanks for the excellent analysis and continued research, it’s a pleasure to read your blogs and I am very excited about GTAT’s future.
    t

    Like

  2. simon says:

    Keep up the good work. We all appreciate your hard work.

    Like

  3. Tall & Skinny says:

    Hi Matt,

    Enjoy reading your blogs & reports. Keep them coming!!!

    -Tall & Skinny

    Like

  4. Matt, excellent work here on every investor’s behalf. Thanks a tonne! If you’re ever in Toronto, look me up – dinner’s on me.

    Like

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