Applied Optoelectronics Inc (AAOI)

[chmcnfunds]

Back in @ $33.10 due to early gap down.

Positive article today on Fool:

____________________________________________
Tariff Talk Sinks Applied Optoelectronics Stock Over 20%, but the Worry Is Overdone


Nicholas Rossolillo, The Motley Fool
Motley FoolSeptember 16, 2018

Shares of fiber optic networking manufacturer Applied Optoelectronics (NASDAQ: AAOI) fell as much as 25% in late August through early September on tariff worries. Comments from the White House that taxes could be imposed on virtually all goods imported into the U.S. from China sent investors scurrying for the exits, and Wall Street analyst downgrades of some of AOI's peers didn't help either. Since the company has operations in China, it could be argued that the political concerns are valid. However, AOI is in good shape, and after another stock price adjustment, shares look like a value play again.
Why some are concerned

At the beginning of September, President Trump warned he might tax another $267 billion in Chinese goods. After a couple of rounds of tariffs already imposed, that means virtually all goods imported to the U.S. from China would get hit with a tax.

Why is that bad news for Sugarland, Texas-based Applied Optoelectronics? Because AOI has three manufacturing facilities: one in Sugarland; one in Taipei, Taiwan; and a third in Ningbo, China. AOI spreads component manufacturing and different levels of its vertically integrated operations across all of its facilities, but the China factory plays a crucial role. The company explained it this way in its last annual report (emphasis is mine):

In our Sugar Land facility, we manufacture laser chips (utilizing our MBE and MOCVD process), subassemblies and components. The subassemblies are used in the manufacture of components by our other manufacturing facilities or sold to third parties as modules. We manufacture our laser chips only within our Sugar Land facility, where our laser design team is located. In our Taiwan location, we manufacture optical components, such as our butterfly lasers, which incorporate laser chips, subassemblies and components manufactured within our Sugar Land facility. In addition, in our Taiwan location, we manufacture transceivers for the internet data center, telecom, FTTH and other markets. In our China facility, we take advantage of lower labor costs and manufacture certain more labor intensive components and optical equipment systems, such as optical subassemblies and transceivers for the internet data center market, CATV transmitters (at the headend) and CATV outdoor equipment (at the node).

In addition, AOI is spending $90 million this year in capital expenditures, part of which includes a new facility in Ningbo, China, that recently broke ground and is expected to be completed in 2020. AOI doesn't say specifically how much of its manufacturing is done on mainland China, nor does it break down the specifics on the geographies in which its final product is sold. However, there is concern that any product that originates -- or has components that originate -- from China will get an extra tax, and that the extra cost will cause AOI to lose orders from its customers.

An illustration of a cloud representing a data center. Computers are arranged in a circle around the cloud, hooked up to it via the internet.
_________________________________________
https://finance.yahoo.com/news/tariff-talk-sinks-applied-optoelectronics-132100274.html

AAOI

[chmcnfunds]

Out today @ $35.40. Up on no news, only an article. Will buy back when drops. Problem with the current position is the high % of shorts ("Short Float 49.45%")


AAOI

[chmcnfunds]

In @ $34.50. Big sell-off over last two days due to analyst's negative comments on 2 competitor companies. Hopefully should recover.

AAOI

[Plegee]

Per Nasdaq.com

Settlement Date Short Interest
4/13/2018 14,513,825

Just under 12 days to cover, down from 14,544,345 shares on 3/15/2018 or 13.4 to cover. Though we are barely lower in April, that is still the second highest level of short interest since 1/1/17.

Down big today because of revenue misses even below management guidance. Getting tired of the constant excuses and lame explanations.

Per Zacks:

Missed earnings estimates . The company posted adjusted earnings of $0.28 per share, missing the Zacks Consensus Estimate of $0.33 per share. Investors should note that this consensus projection has trended downward over the duration of the quarter.

The company saw revenue figures of $65.2 million, missing our consensus estimate of $69.3 million. Total revenue was down 32% from the year-ago period.

GAAP net income was $2.1 million, down from $19.8 million in the prior-year quarter.

"We achieved revenue in the first quarter of $65.2 million, which was slightly below our guidance as we were unable to complete some orders in the quarter due to higher than expected employee turnover in our China factory as a result of the Lunar New Year holiday. These orders have been shipped in Q2. In the first quarter, we made good progress in diversifying our customer base with nine design wins, including five for our 100G products," said CEO Dr. Thompson Lin.

[T695]

Is the shirt float here really 78%

[ITMS]

Strong Buy: Shares Of Applied Optoelectronics $AAOI Tag Major Level

Shares of Applied Optoelectronics Inc tagged a major gap fill from 2017 yesterday at $23.50. This level is probably the biggest technical support on the chart in recent history and likely a near-term major bottom. The stock has fallen from over $100, down 75% from its 2017 highs. A classic technical retrace has the stock jumping back up to $35.00, a 50% upside move.





Gareth Soloway
InTheMoneyStocks

[girlfriend]

Do you still think something big is about to pop?

[Money Maker 1]

$125M contract with FB! Morgan Stanley likes it. They bought 30M Wirth of AAOI stick

[Money Maker 1]

$AAOI breakout! Short squeeze

[Money Maker 1]

Weeeeee!!!!

[Money Maker 1]

Morgan Stanley just purchased 5.3% of AAOI. Form 13G out. Something big is about to pop! $AAOI

[ITMS]

Major Swing Trade Buy Level On Applied Optoelectronics (AAOI) Revealed

Shares of Applied Optoelectronics Inc (NASDAQ:AAOI) are collapsing today after the company reported earnings and guidance below Wall Street's expectations. The stock collapsed more 20%, to the mid-$26's. As a swing trader, I am finding major support at $22.80. This is a gap fill and a technical monster support. In addition, the stock is down from its 52 week high of $103.41. This places the stock in a long-term oversold condition. Once the major technical target of $22.80 is reached, Applied Optoelectronics should snap back to $30 or higher.




Gareth Soloway
InTheMoneyStocks

[Deagle]

the whole drop looks to have been engineered and supported by shorts, in my opinion. Millings in profits is not good? Just because they did not have revenue of $86 million but go close, this is bad? I will be holding for the duration, as this was not a day trade for me anyway

[Plegee]

CEO and founder Dr. Thompson Lin said revenue "was slightly below our expectations due to lower demand from our datacenter customers as they continue to evolve their network architectures."

Added Lin, "While our revenue came in slightly below expectations, I am pleased with our ability to continue to generate strong gross margin even in a price sensitive market."

Applied's gross profit margin in the quarter rose to 41% from 38% in the year-earlier quarter, though it was down from 44% in the immediately prior quarter.

Lin said the second half of this year will be better than the first:

Even though we see inventory headwinds with one of our customers and the typical seasonality in Q1 due to fewer production days in China because of the Lunar New Year, we continue to expect the second half of 2018 to be stronger than the first half. We believe we have a strong leadership position in advanced optics, and this belief is bolstered by a large purchase commitment that we disclosed earlier today.

Revenue in the three months ended in December rose to $79 million, yielding EPS of 89 cents excluding some costs.

Analysts had been modeling $85.5 million and 83 cents a share in net income.

For the current quarter, the company sees revenue in a range of $67 million to $71 million, well below consensus of $86.4 million. EPS is seen in a range of 28 cents to 34 cents, versus the consensus of 69 cents.

Update: Applied Opto stock is recouping some of its losses after hours following the appearance of an 8-K filing with the Securities & Exchange Commission in which the company said it entered into a supply agreement to Facebook whose value may be worth $125 million to Applied this year.

[T695]

This thing all over the place

[Deagle]

Short Float 67.45%
Shs Float 18.37M
Shs Outstand 19.38M

https://finviz.com/quote.ashx?t=AAOI&ty=c&ta=1&p=d

[Deagle]

I guess you are not aware what 100G speed means to their clients. They even have 200 G and rumored to be working on 400G speed. "You ain't in Kansas any longer."

[chriswolff]

Fear post won't shake away the true believers. If I stay while it was 37, I am staying now. Especially since the last ER.Comeback? Yes

[JWard99]

Come on bears, list some more random prices this will hit tomorrow below 30! Bulls, 100? Come on... Let's agree on my average of 53

[Redundant]

What a crock!
A different phony rationale to buy every month.
Keep reeling those suckers, like me, into this dog.
From 100plus to 70 to 60 to 53 to 40 to ?...
Keep coming up with excuses while insiders keep selling every other week.
Eventually the stock will go up....maybe...

[dws]

Casey Research sent an investor update today........doubles down on their strong buy. They expected a down quarter but remain bullish and think it not far-fetched to see CSCO come-a-courting.

GLTA

[T695]

Ok watch

[Mafiaxxx]

NOPE!

[chriswolff]

Problem is due to concentration sales to 2 largest clients comprising of 60% revenues. It's a sad state until its get more clients. Sorry for anyone who got caught in this storm, the company will bounce back with patience. Good management and important sector.

[MiguelHammond10]

AAOI I am done with my patience to day traders flipping sides and claiming they win everyday. The real longs here won more than 150%

[Redundant]

According to Schwab data, short interest was 55% last Friday.
I dont know how much coverage happened yesterday..
Probably some.....but likely not a great deal. Premarket AAOI looks like it will gain 80cents
to a dollar at the opening. Run baby run! .70 is within reach with just the momentum from yesterday.
SHORTS DON'T COVER! You can recover what you gave back yesterday. You made a mint. You can
afford a little risk.

[_55]

Shorts having to cover. Something like 70 percent of float. Perhaps more to come from this squeeze

[Plegee]

Can not find any current news; other than shareholder law suit nonsense. Seems like this is sector wide, IIVI, LITE, FNSR all making upward moves. Most over 2% higher at this point.

[Redundant]

If today's jump up holds...somewhere around 65 or so....it will be interesting to
monitor what happens to the short sellers. Will they be happy with their pounds of flesh...or...
will they be upset that they lost a modest piece of the huge windfall most have had, and try to drive it down again???

I'm hoping they don't cover yet. . . I'm hoping greed prevails....
and then, over the next month, they keep holding their shorts until it reaches 70, when
they all race to the "short" exits....bringing new buying propulsion.

[VERITAS77]

$72.50 Target

[WowieUp]

Well it's a well written opinion ....I do worry a bit about the inside selling even though it's not much....it's frustrating to see the stock stall where it is, and even when there is a little movement it gets beat back down I guess that's the pressure of the shortselling ...am I right on that?

[Redundant]

Check out the amount of stock short at this point. You think they would have covered but Schwab is showing the percentage if a staggering 55%!!

on the other hand, three filings show 3 directors/staff are still selling. Why would they do that if things are getting better?
granted it's only maybe 10% of what they possess but it's also filings over the last 10 days.

Either the shorts are extremely greedy and the insiders just needed a little cash....
and therefore some tangible good news could send this soaring back up...
OR...some know or believe that there is more weakness in sales ahead or the competition is gearing up or
whatever....and are looking for a second thrashing.

I am willing to stay at the table with my AAOI position and even modestly add to it. With all the lawsuits out there, it's hard to believe management would conceal information from public scrutiny at this point and risk serious legal issues, beyond those suits associated with the positive press release a few weeks before the negative conference call surprise. Since the selling is limited to 3 partial sellers, any evidence that the overall game plan is on track and projections will be met could send the stock up significantly when the shorts have to cover.

Just my opinion for my own investment. Not trying to give advice to others.

[Plegee]

A bit of a head scratcher here, almost 50% hit off of since pre-announced earnings beat. Transition to higher/newer generation lasers (with higher margins) is a good sign, not one to be punished so handidly. WalMart building huge data center, major cloud based data centers upgrading as well; I'm optomistic about our future mid to long range prospects. CEO even stated operation costs will continue to decline as a % of revenue; increasing or at least maintaining current margins.

Disappointed the meager interim day gains always fade by the close. Think the 200 dma will be tested. If it holds, I will certainly take advantage. Regardless, absent a major market correction, we have to be heading higher into 3rd quarter earnings. This stock has explosive potential sitting with a PE under 14 and a PEG under 1. RSI is a ridiculous sub 39.

[ITMS]

Shares Of Applied Optoelectronics (AAOI) Near Key Bounce Level

Shares of tech growth stock Applied Optoelectronics Inc (NASDAQ:AAOI) are nearing the daily 200 moving average at $51.00. Just two months ago Applied Optoelectronics was trading above $100.00. This means it will be a 50% haircut. I believe investors can buy Applied Optoelectronics at the daily 200 moving average for a swing trade bounce for at least 10%. I personally plan to buy anywhere between $50-$51.



Gareth Soloway
InTheMoneyStocks

[Redundant]

But sadly, it gets to be a better "buy" every single day..

[jones99]

At $61, AAOI trades at 10.6 PE, extremely undervalued relative to strong fundamental positioning, sustained growth potential.

[Avispa]

https://seekingalpha.com/article/4100904-applied-optoelectronics-oversold-compelling-risk-reward-ratio-solid-medium-long-term

[Mafiaxxx]

buy?

[Mafiaxxx]

good luck bro
im pushing for it to go the other way...

[JWard99]

Should push 70s this week key is 75 if it blasts that in really good shape if not range bound for a while.

[Redundant]

I am the "bigger fool" you read about
I bought in at 89 and 100.
ouch.
lesson learned. I hope.

[jones99]

I now have 1K shares lowering my average too $68.78, so I am all in now and do not think I will add more at this time. Should be $80.

[JWard99]

I will be increasing my position in AAOI shortly. This is a clear dip buying opportunity on panic selling. Time horizon is at 3-5 months.

[realfast95]

Applied Optoelectronics weakness a buying opportunity, says Raymond James Raymond James analyst Simon Leopold said the selloff in Applied Optoelectronics is overdone and said the sales decline due to lower 40G sales will be overtaken by 100G growth. He sees 2018 sales growth of approximately 20% and would views Friday's selloff as a buying opportunity for risk tolerant investors. Leopold rates Applied Optoelectronics a Strong Buy with a $107 price target.

Read more at:
https://thefly.com/landingPageNews.php?id=2592132

[stocktrademan]

AAOI buy 64.60









normal chart




log chart

[Mafiaxxx]

$25 price target?

[jones99]

I don't see a big dip today - the usual morning short attack, then on to another ATH. $86 EOD. Weds/Thurs could be the big squeeze.

[stocktrademan]

AAOI buy 83.755









normal chart




log chart

[mrcraigo]

Epic run with no sign of slowing down.... Also playing PI, take a look

[TopPick]

Thank god I bought back in this not stopping