Why GT Advanced Technologies Inc. Shares Temporarily Plunged Today

Is GT Advanced Technologies' plunge meaningful? Or just another movement?

May 8, 2014 at 12:54PM

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) initially fell as much as 10% early Thursday, then partially recovered to trade down around 4% after first-quarter results came in below expectations.

So what: Quarterly revenue fell 61% year over year to $22.5 million, which translated to a wider adjusted net loss of $0.22 per share. Analysts, on average, were expecting a slightly smaller loss of $0.21 per share on sales of $26.98 million.

But GT Advanced Technologies offered some solace to shareholders by reiterating guidance for full-year 2014 revenue in the range of $600 million to $800 million, with adjusted gross margin of 25% to 27%. This should result in adjusted earnings per diluted share in the range of $0.02 to $0.18. For reference, the midpoint of both ranges is roughly inline with analysts' expectations for 2014 earnings of $0.10 per share on sales of $694 million.

Now what: That's not to say it should come as any big surprise. After all, last quarter GTAT told investors 85% of this year's revenue will arrive in the second half. And given the near-term absence of a meaningful rebound in the photovoltaic market, it's no mystery the big driver of that top-line guidance is GTAT's multiyear sapphire production agreement with Apple. Under that agreement, the Cupertino-based tech giant is leasing to GTAT a new 700-employee manufacturing facility in Mesa, Arizona.

The deal also involves Apple fronting $578 million in prepayments -- of which GTAT has already received $440 million -- to fund GT Advanced Technologies' capital outlays related to the facility. In any case, while we can't be exactly sure yet how Cupertino plans on utilizing GTAT's increased sapphire capacity, it appears everything is still progressing nicely. As a result, today's pullback might just represent a fantastic opportunity for long-term investors to start or add to a position.

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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