| Stock (Symbol) | Stock Price | |
Mellanox Technologies (MLNX) |
$81 |
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| Data is as of | Expected to Report | Sector |
November 5, 2012 |
Jan 21 |
Technology |
| Sharek’s Take | ||
 Mellanox Technologies fell from $98 to $78 after it reported solid figues last quarter that beat the street due to big deals that got booked. This quarter there are no big deals yet — so estimates nudged down — but that also makes it easy for the company to beat expectations if a big deal comes in. Here’s a breakdown of big deals by quarter (source: IBD):2012 Q1 $10 million 2012 Q2 $30 million 2012 Q3 $25 million 2012 Q4 none Still, I think the real reason MLNX fell was the stock went from $32 to $120 this year and was bound to fall on any negative news. People were ready to take profits. |
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| One-Year Chart | ||
 At this point the stock is bargain at 20 times 2013 earnings. The P/E was 30 last quarter (on 2012 earnings). I also think the stock is getting support here at $75 – $80.Profit growth is sizzling. The estimated Long Term Growth Rate rose from 25% to 50% and now 69% the past three quarters. |
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| Earnings Table | ||
 Profits grew 265% LastQtr and have grown from $0.31 to $0.51, $0.99 and now $1.13 the past 4qtrs. Sales jumped 129% last quarter, better than the 112% 2QtrsAgo.MNLX beat the street by 24 cents, which was very solid. Annual Profit Estimates are mixed. 2013 profits are expected to grow only 6%. This needs to get better. Quarterly estimates show exceptional growth the next two quarters then growth is expected to slow. This also needs to get better. |
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| Fair Value | ||
 MLNX had a 30 P/E in last quarter’s research report. I’m taking my Fair Value P/E from 45 to 30, and there’s still huge upside. |
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| Ten-Year Chart | ||
 This stock has now corrected after the parabolic move. Good. I would like to see MLNX hang around here for a while, then go to $120.Note profits are expected to rise from $1.07 last year to $3.89 in 2012. Amazing. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
9 of 15 |
The big story here is MLNX was on fire last quarter — the sky was the limit. Now not everything is perfect, and that lead to the stock’s decline after a parabolic move. When I got into this stock I said “buy half a position now, and wait for the inevitable correction then double-up on the shares“. I feel this is a good spot to double up, but the market’s in a correction and MNLX is risky here, so only do so if you can stomach the heat. MLNX is ranked 9 of 15 stocks in the Growth Portfolio Power Rankings and 7 of 8 in the Aggressive Growth Portfolio Power Rankings. |
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Aggressive Growth Portfolio
7 of 8 |
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