I think it is a mistake to try and predict stock prices. Investing is all about fundamentals and patience.
I post some of my comments I wrote about another stock GLUU if you want to read the whole comment go to Asking Alpha and track my comment down, but the relevant extracts follow:
mce-anchor Glu Mobile Poised To Climb 50% By Year-End [View article]
When I say other than timing, I mean Mark should never have put a timeframe on his recommendation. Mark analyzed the situation correctly but one can never predict how the market will react.
As an example, I hold a substantial position in UNIS, like GLUU it has very strong fundamentals but the stock has been all over the place. There are individuals who have shorted the stock and will put stories about its impending demise. Shortall the CEO has a checkered past and scaring people is easy. After announcing some key contracts the stock spiked from around $3.30 to nearly $5, now a couple of months later it is back to around $3.30. When I post about this stock, I advise people to buy it and forget it. In 3 years it should be at least a triple but if you are playing the options game, you might lose a ton of money. The safer bet is to sell deep in the money puts and guarantee yourself a profit or a purchase at a steep discount. Admittedly your gain is capped. Alternatively, if you don't mind being called then the better bet is to sell, out of the money puts, thereby guaranteeing you are getting at least a 10% discount at today's prices. I played GLUU the same way and if cashflow became a problem, I just traded my nearly expiring options to the furthest out I could go.
I have lost a ton of money in the past so I learned the hard way how to play safer yet make money; from 90% loss to breakeven in 5 years. Call it luck but the best lesson I learned was from my disastrous margin investing when I dropped from a 100 to 10 in a span of 6 months. Growing from 10 to a 100 is a lot tougher than going from a 100 to 10!! but I was forced to learn. Something I probably would never had done if I was doing semi OK.
I reiterate my main point. Stock prices are and always will be volatile for companies in essentially a start-up mode. You have to look at the fundamentals and do your own due diligence, then wait for the market to catch up with your analysis. If the fundamentals are sound the market will eventually catch up with the fundamentals. When it does, it will do so with a vengeance and overshoot on the upside as it does on the downside.
For the record I have been buying back my forced liquidated positions, while I toy with the idea of suing the broker for disregarding my specific instructions. I currently own or have exposure to over 99,000 shares through the use of puts (both in and out of money puts, this requires a lot less money than outright purchase. There is no way I could buy 99K shares outright!). So all I can say is I put my money where my mouth is and 3 years from now when I look back I hope to say I was glad I did.
I am not expecting any miracles at tomorrow's earning release but if the stock drops I will buy some more. Unless Shortall is lying and willing to go to prison there is nothing that leads me to believe we will not triple in 3 years.
Good luck all; although if you do your own analysis luck is not what will get you to your destination, execution will! and if the stock doesn't do what we expect, blaming someone else for our failures, means never learning the intended lesson
As usual just my 2 cents
UNS Price at posting:
71.0¢ Sentiment: Buy Disclosure: Held
