Sify Technologies Shares Went Crazy: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Indian Internet specialist Sify Technologies (Nasdaq: SIFY  ) skyrocketed more than 60% on positive fiscal second-quarter results, all but confirming earlier hopes the stock had become oversold.

So what: Revenue rose 5.7% to $37.1 as the company's net loss fell from $2.74 to $1.39 a share. Earnings before interest, taxes, depreciation, and amortization (EBITDA) tripled from the year-ago period as management cut costs.

Now what: In a statement, Sify Chairman and Managing Director Raju Vegesna spoke of a positive outlook for growth in India, leading other regional tech names such as Rediff.com (Nasdaq: REDF  ) to similar rallies.

I can see the point. India is a massive growth market. But with the stock trading for more than 4 times sales and management's limited success at achieving growth, Sify is probably too risky -- and too pricey -- for most investors' portfolios. Do you agree? Would you buy shares of Sify Technologies at current prices? Please weigh in using the comments box below.

Interested in more information about Sify Technologies? Add it to your watchlist.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He didn't own shares in any of the companies mentioned at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

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Read/Post Comments (5) | Recommend This Article (10)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 01, 2011, at 9:46 AM, brajaharidas wrote:

    Yes I WOULD purchase shares in SIFY. You guys have ALWAYS short-changed India. You STILL believe that it is a third world country, even when it is beating the pants off our very own NYSE and NASDAQ.

    People need to get their heads out of the sand and recognize the Indian Internet Companies as being what the US Internet Companies were before 2000; GROWTH (can you say that?) Companies.

  • Report this Comment On November 01, 2011, at 3:18 PM, yogalad wrote:

    No I definitely would NOT buy shares of SIFY.

    What SIFY did by granting their controlling shareholder 125,000,000 shares of stock at an absurdly low price of .69c while the stock was trading in the mid-2's shows you that this company is being treated like a private holding without regard to shareholders.

    In fact if this had occurred in the US this company would have surely faced multiple class-action lawsuits.

    As it stands SIFY has been mightily diluted. Their share count has increased by 225%, from 55M to 178M shares in what only can be described as a 'stockless stock split' for the existing shareholders.

    Any profitability is therefore a long ways off.

  • Report this Comment On November 01, 2011, at 10:34 PM, highflyer33463 wrote:

    Very old news about shares.On nasdaq site on left hand side -sec filing 6k 10/28/2011 again and again.The wall st journal released article over and over again when sify had 4.8 million short position and at 4xs sell wall st has many ipo's way higher.Too many articles everytime a stock moves up or down .SIFY is a longer term growth story and soon everyone will just be on auto computers as whipsawing back forth getting silly and anybody can do well with media behind them

  • Report this Comment On November 01, 2011, at 11:50 PM, highflyer33463 wrote:

    Sify has lowest bid for govt contract around 170 million over 7 years so maybe get foot in door.And you can tell starting to ease regulations.

  • Report this Comment On November 02, 2011, at 12:13 PM, vinnyk81 wrote:

    To the moron brajaharidas, as a fellow Indian, I would highly urge you to shut your trap. Nobody is talking anything about India in a positive or negative manner. This article is all about SIFY the company.I personally would buy SIFY at a price around 5 but won't pay more than $6 for it.

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