Why GT Advanced Technologies Shares Are Shining Bright

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 GT Advanced Technologies (NASDAQOTH: GTATQ  ) have soared over 13% today after the solar component maker reported second-quarter results after yesterday's close that trounced Wall Street's expectations on the bottom line.

So what: GTAT's earnings report showed flattish revenue, which increased only 1% to $168.3 million -- short of the $169.0 million top-line analysts had sought. However, GTAT's earnings of $0.15 per share came in well above the Street's $0.10 consensus estimate. The company didn't adjust its full-year guidance, which still stands at $500 million-$600 million for revenue and $0.25-$0.45 for EPS, but both of these ranges still reach beyond the analyst consensus. Wall Street had been looking for $527.1 million in revenue and $0.29 in EPS.

Now what: Solar stocks have been all the rage in 2013, and GTAT is no exception, as it's now nearly doubled since the start of the year. Bear in mind that GTAT is still unprofitable on a GAAP basis, but that looks to change soon, as only the first quarter of 2013 remains as a net negative on the company's books out of the four most recent quarters on record. The company's full-year projections peg its forward P/E in the range of 13-24, which is well within reason for a resurgent sector that still has a lot of growth potential left.

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  • Report this Comment On August 06, 2013, at 3:12 PM, banmate7 wrote:

    In other words, GTAT remains a very speculative investment!


    Don't get me wrong. I am holding GTAT shares. But I have no illusions that I will either win big or lose big here. This company has not proven that it can make money. Sorry, but for me, GAAP reporting is what counts.

    I'm up 25% in GTAT on $5k basis, averaging $4.46 a share. Not bad. But I won't pile more money into here. Again, I realize that I can easily lose my $5k, as well as get a multi-bagger.

    The way I see it, GTAT's future depends on the solar industry recovering in time. I don't think the sapphire screen market will develop fast enough, although it helps diversify things a bit. On that note, nobody knows where solar is going.

    I like GTAT technology & management, even if I think managers pay themselves excessively. But they have compelling way to develop a solar market that has many factors at play. I like that GTAT is at the front of the solar supply chain.

    I have $5k in GTAT, $25k in Corning. I'm hoping both succeed. But the latter is a safer bet, whereas the former is my speculative play. Hence the difference in the dollar amount I invested in each.

    All the best. Thanks for the article.

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