Credence Systems Corp (CMOS)

[mike306oh]

1. Some BOD members got their stock options converted in January:

http://www.secform4.com/insider-trading/893162.htm

See the SEC fillings for all those institutional investors who are heavily loading (most probably the same ones that shorted the stock in the first place).

2. Yes, Heavy shorting:

http://shortsqueeze.com/?symbol=cmos&submit=Short+Quote%99

Any good news will no doubt start a very nice (for us) short squeeze action (bad for the shorts).

3. Your prediction for Monday:

http://predictwallstreet.com/forecast.aspx?symbol=CMOS&pv=1

4. Opinion:

4.1 Very short-term is hard to predict. It all depends on how succesful are the short traders puting through their usual wash trades. The increased volume toward the EOD today, tell me that the price has a very small probability to decline any further.

4.2 Short-term -- As per above, we might see a nice short squeeze, and a fast (NYNY -type) short lived price increase.

4.3 Medium-term (up to 6 months). Let's see: (i) QoQ revenue (net revenue), (ii) addition of new heavy weight Mgmt, and BOD members alone could put the price @ a new 52 week HoY.

4.4 Long-term (1 year). The last 2 Q's was the first in a while with good net margins (the fall Q has been tradiionally worse for this company than the summer Q, and much worse than the winter Q). Somehow, investors are not yet sure if the last two Q's results were not just an "accident." Should the next several Q's follow the same trend (and knowing quite well their line of business, and the semi equipment and materials sector general trend), I believe the company has already turned the corner). Just look at the YoY net margins evolution over the last 3 years:

http://finance.yahoo.com/q/is?s=CMOS&annual

By looking at it (and as most predict the sector comming out of their cyclical depression), one can predict a much better 10-K this FY. Just looking at remarcable YoY net margins improvements, can anyone explain the drop in price? This is due a very significant price reevaluation (and most institutional gurus know it, as proven by their heavily loading as of late).

PS: This is not a cheap pump, folks. In fact, knowing Credence and the sector line of business, I certainly wish the price was still going down a bit, as I'm still in the accumulation mode (although with this AN 45K loading I'm approaching 100K shares). The lower it gets, the more shares I can get within my limitted available cash at hand.

Mike