Hi DoubleGold: I think there is much similarity b/w CPQQ, CNAM, BSPM and quite a few others which had some financing around the turn of the year to finance some capacity expansion and now got hit with dilution going into a weak Q2 before any meaningful revenue increase from the expansion. The result is near zero or even negative eps growth at least until Q3 and Q4 which are several months away.
CPQQ had a very strong Q1 b/c Q1 last year was a very bad comp. So it increased rev by 113% and Net Inc by 131% even with a 53% dilution. It also announced its new plant with a quadruple capacity vs. its existing plant will start pilot production in June. Cool. But this means Q2 will be left with the current capacity and a high share count. So even if we assume the rev to double last year Q2 rev of 5.9M (which is not very likely), the eps will at best grow by 14%. An anemic growth that investors are staring at.
Very similar to what I am expecting with BSPM. With CNAM, another huge grower but not in the first half of 2010, I even expect a possibly negative eps growth in Q2. So although all these stocks have very growth later this year and next year, ST they may get pounded hard. If you have a longer horizon than a few months, of course CPQQ (as well as the others) are screaming buys right now. GLTY
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