Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why Himax Technologies, Inc. Tanked on Tuesday

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

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 Himax Technologies  (NASDAQ: HIMX  ) slumped 16% on Tuesday after Bank of America downgraded the flat-panel chip maker from buy to underperform.

So what: Along with the two-notch downgrade, analyst Dan Heyler slashed his price target to $12.50 (from $17.58), representing about 7% worth of downside to yesterday's close. So while contrarians might be attracted to the stock's sharp pullback in recent weeks, Heyler's call could reflect strengthening skepticism on Wall Street over Himax's true growth potential.

Now what: B of A lowered its 2014 and 2015 EPS estimate for Himax by about 23% and 18%, respectively. "[C]ompeting in a number of highly competitive markets so sharp margin expansion will be difficult without a sharp ramp in [Liquid-Crystal-on-Silicon]," Heyler cautioned investors. "Mgmt is likely to move forward with capacity expansion but may not be able to fill that capacity until 2015." When you couple that operating uncertainty with the stock's 30-plus P/E and highly volatile nature, conservative investors would probably do well to heed B of A's advice. 

Three stocks poised to help you retire rich
It's no secret that investors tend to be impatient with the market, but the best investment strategy is to buy shares in solid businesses and keep them for the long term. In the special free report "3 Stocks That Will Help You Retire Rich," The Motley Fool shares investment ideas and strategies that could help you build wealth for years to come. Click here to grab your free copy today.

Read/Post Comments (2) | Recommend This Article (1)

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 March 25, 2014, at 1:27 PM, famousstocks wrote:

    Bank of America missed this one and searches a cheaper jump on the bandwagon, before google glass get sold to the public.

    I will load up himax as much as i can in the next days, maybe I get a price below 11$.

    That's not a buy recommendation, do your homework.

    patience is needed for 2 years at least.

    As I see all people running around starring on smartphones in the hand, google glass is a great relief.

  • Report this Comment On March 25, 2014, at 3:42 PM, DamekMW wrote:

    32x pe doesn't seem so expensive when one considers the forward multiples.

    Forward P/E (fye Dec 31, 2015): 13.27

    PEG Ratio (5 yr expected): 0.59

    cheap compared to a company like invn (comparing apples to apples)

    (I'm long both himx and invn. More than doubled my himx position today at $11.29)

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2889203, ~/Articles/ArticleHandler.aspx, 8/29/2015 5:49:53 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Brian Pacampara

I take a look at big 10% moves, as well as stock-shaking analyst calls, on a daily basis for The Fool. While I don't believe in active trading, closely monitoring Mr. Market's mood swings can help identify long-term opportunities.

Today's Market

updated 8 hours ago Sponsored by:
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 1.21 0.06%
NASD 4,828.33 15.62 0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 4:00 PM
HIMX $6.88 Up +0.14 +2.08%
Himax Technologies… CAPS Rating: ****