ATW...a good short now?

[traderich]

I have been shorting and covering ATW the last 2 months now in the range of 102 to 88.

Seems overpriced.

Short interest growing as well.

Insiders selling off recently too.

Major institutional ownership (they don't sell much) which
makes me think this is the reason the stock is supported
at these prices.

What do you think? a good short? or cover and go long?

 

[mraln]

I'm actually VERY bullish on ATW right now. The drillers are in a bull market AND ATW is undervalued and still growing. I suggest you go long and make up for what you've lost through your shorts.

Here're some numbers:
P/E 9.08
Earnings Growth Rate 27%
Earnings Estimate for Current Year: 4.88
EE for Next Year: 11.06

And momentum has taken this stock up about 30% the last 3 months. Think about it like this: You're a sports better betting the money line against the Detroit Pistons in the first half of the season with 1:1 odds.

If you're not going to go long, then just cover your shorts.

BTW: Insider selling is not always the best way to guage things. If you look carefully, they get a HEAVY discount on the stocks. Irwin bought 30K shares for $993K and sold them for $2.9M on the same day. Why wait around when you got a three bagger? Yes I know, the answer to that is because you could get a four or five or six bagger. But I'm guessing Irwin doesn't have that kind of time or knowledge of stocks to risk it. From what I'm seeing a lot of insiders are conservative and don't want to risk what they can gain now.

 

[traderich]

your p/E ratio calculation is flawed.

You are using a forward p/E based on estimated earnings.

The latest reported earnings indicate a p/E closer to 50.

I am happy to see ATW dropping again. I will cover in low 90's.

cheers.

 

[traderich]

wow, I guess it's good info to know that no one trades this stock on here!

I was wondering why so little messages on yahoo on it. I was right. 99% of the stock is traded by the mutual funds and institutions.

And, we all know that when any kind of earnings shortfalls happen, they sell off and when they do its not just a couple thousand shares!

 

[mraln]

Now that I'm looking at ATW (with the current P/E) it is somewhat expensive. However I would never bet against a growing company in an industry in bull mode. In fact I wouldn't bet against any company in a bull industry in a bull market. You'd pretty much be betting for a pullback, and that might not happen before a big run (in which you would still be down). That's just my .02.