Syneron Medical Ltd (ELOS)

[midastouch017]

I sense a large probability that Syneron Medical Ltd. (Nasdaq: ELOS) will issue a profit warning. Friday’s 11% plunge in the share was due to a downgraded recommendation from CIBC, which fears that the company will miss its sales target. In a "Globes" interview on Sunday, acting Syneron Medical chairman Dr. Shimon Eckhouse declined to comment on the quarter, claiming that the figures had not yet been collected. This claim seems odd to me in the computer era, and constitutes at least an indication that the quarter is borderline, with the company scrambling to get its distributors to up their sales figures. In addition, a sentence like, “I’m here to build value for investors in the long term,” usually hints at a problem in the short term.

Synernon’s share began its slide from a peak of $46 on December 13, accompanied by a large trading volume. At the time, the fall in the share was attributed to a downgraded recommendation by CNBC guru James Cramer, who told investors to take some of their large profits in the share off the table, because, as he puts it: "Bulls make money. Bears make money. Pigs get slaughtered." The share indeed shed 32% of its peak value, but I suspect that, even then, the fall was due to problems with the company’s quarterly results, not just what Cramer said.

Cramer also recommended switching to the share of a competitor just after its IPO, and similar recommendations of his for other shares did not cause such a sharp response. After all, he didn’t say anything bad about Syneron for either the short or long term; he only repeated his investment philosophy, which advocates taking some of the profits gained from a rising share.

http://www.globes.co.il/serveen//globes/docView.asp?did=1000046255&fid=1176

Dubi