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 Aeroflex Holdings
So what: Goldman also assigned a price target of $15, which would represent nearly a 64% premium over yesterday's closing price of $9.16. Teradyne's
Now what: The $15 price target isn't entirely unreasonable, considering that Aeroflex shares were nearly $19 as recently as early July. The company has gotten punished multiple times in past couple months after lowering its fourth quarter outlook and issuing soft first-quarter guidance after announcing earnings. Combine that with the 13.3% short interest at the end of August, and you have the recipe for a potential short squeeze if given a positive catalyst. Investors may have negatively overreacted to recent events, since top-line revenue grew by 11.3% last year (even if it was a little shy of analysts' expectations). Ultimately, the key to long-term success is the strength of the underlying business, not short-term expectations.
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Fool contributor Evan Niu holds no position in any company mentioned. Click here to see his holdings and a short bio. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.