BUY ALERT: AuthenTec (Nasdaq: AUTH) BUY 1/4 Position 1/23/08 Around $12.00
What:
I am initiating the Third (3) BUY recommendation of AuthenTec (Nasdaq: AUTH) at or around $12.00 per share.
Why:
Further due diligence and research of AuthenTec has strengthened my original investment thesis to the point of which I feel that AuthenTec’s shares anywhere around $13.00 or less represent an incredible buying opportunity for long term investors.
When I initially wrote about AuthenTec, my concerns were about valuation and market opportunities when shares were trading at $16.00 per share and higher.
Those concerns have since evaporated not only because shares are much lower today, but more so because I believe AuthenTec is trading at a significant discount to where a rapidly growing company with a huge market potential like AuthenTec should be trading.
I believe that this company can see its shares appreciate in value by 50% or more within 1 year, and never look back.
AuthenTec’s growth potential is huge, their competitive advantages are enormous, and their valuation at this level makes them not only compelling from a company standpoint, but also from a valuation and risk/reward standpoint, and that’s not something that can often be said for a fast growth company!
Don’t be afraid of current market conditions!
While we can never predict bottoms, my cost-averaging approach to purchasing shares on PeakStocks.com has allowed us to get into AuthenTec at bargain prices while being patient for a turnaround in the overall market, and specifically, for a catalyst with this particular company, which will be upon us shortly with AuthenTec’s next earnings announcement coming up as well as new products and manufacturing deals that will be announced in the upcoming quarter.
I advise you to buy shares immediately, even if it is only your first position, and add to that position on anything below the $12 level.
Remember, AuthenTec came public at $11 per share. I never thought we would have the opportunity to purchase shares at or near these levels again. This might be one of the last times you’ll get that chance, don’t let it pass you by.
Click here to read my full company research report on AuthenTec.
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Variables You Should Know: |
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| Risk Rating: | 7.5 (Moderate-High) |
| Position Size: | 1/4 (12-17-07), 1/4 (1-17-08), 1/4 (1-23-08) |
| Buy Around Price: | $13.50 (12-17-07), $13.25 (1-17-08), $12.00 (1-23-08) |
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(2) comments to “BUY ALERT: AuthenTec (Nasdaq: AUTH) BUY 1/4 Position 1/23/08 Around $12.00”
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Seeking Alpha Gold Certified Contributor
January 23rd, 2008 at 6:59 am
Agree with you generally on potential of AUTH — found your website as I was looking for more background and thoughts on the stock. You dont think the potential for an Asian slowdown (tied to the US situation) could hurt Authentec’s sales and growth since that’s where most of their sales are?
January 23rd, 2008 at 8:03 pm
Michael,
This is a great point, and one in which I perhaps have not addressed properly in my posts and updates, but let me clarify it right now:
Because AUTH and the other companies that I recommend on this site (most of them anyway) are really small in value, and sales, external forces do not affect them much if at all.
In other words, because AUTH is such a small company right now, and growing rapidly, lets say PC and cell phone sales slow down 10% next year, because AUTH’s products are being ramped up and further introduced into these products, that slow down won’t affect their penetration, because as of now, it is small.
So even if the world economy slows down a lot, people are still going to be buying PC’s, Cell Phones, and other access control devices, and will still want added security for those devices which AuthenTec can provide cheaply and accurately.
So in short, no I am not worried that much.
Can it still happen? Sure, I guess if there is a total collapse in the PC and cell phone market (when has that happened?) perhaps only then would AuthenTec not grow as fast or at all.
At present, that’s neither likely, nor probable, even with a severe slowdown in consumer spending.
That’s the beauty and power of small companies that are growing fast regardless of external forces.
Chris