Elite Swing Trades

[oldberkeley]

A bit more weekend DD on MXWL:

Last week Piper Jaffray went from overweight to neutral, changing their price target to $6.50 from $11.50. I think that's rather low, but even at that price there's money to be made.

From the report:

We are downgrading MXWL to Neutral following the sudden resignation of the company’s auditor, McGladrey LLP. We defended MXWL earlier this month when the company first announced an error in its historical filings. At the time, the issue appeared relatively benign: the errors apparently dealt with inappropriate revenue recognition, but only resulted in $12m of necessary adjustments. However, we struggle to see how/why the company’s auditor would resign over this issue. We believe investors are likely to suspect more grievous problems, and thus we are cutting our target multiple to 5.5x EV/EBITDA, which is well below the peer group average of 9x-10x.

My thoughts: It’s a $12 mil adjustment, not loss! I don't struggle with seeing why an auditor would resign/be asked to resign over this kind of mistake. Investors suspect things that aren’t true all the time.

Also, analysts at Stephens downgraded shares from overweight to equal weight with a $10.00 price target down from $12.00. Again, I don’t need it to go that high to make some $$$$.

Nine other analysts have a hold rating, with a consensus target price of $7.69. This would be my best guess, but I’d be out somewhere in the mid-to-high $6's, about 20%.

Maxwell Technologies, Inc. (NASDAQ: MXWL) develops, manufactures and markets energy storage and power delivery products for transportation, industrial, telecommunications and other applications and microelectronic products for space and satellite applications.
http://www.maxwell.com/about_us/company-overview