At 09.00 am the price has recovered from -11.5% to -3.6%. Given the history of this stock I had expected the fall on unchanged earnings to be greater. It sounds like the accounts will only truly reflect the anticipated performance improvement in Dec 18. I conclude is that the story has now been recognised and larger investors are happy to hold for the growth story around these levels. It should be realised over the next 18 months. My personal view is that the situation will look dramatically different then and the current forecasts will look very modest.
Having banked some profit at about 71p I was hoping for a better dip to buy back in. It looks like this may not happen now, unless there is a general market fall, which would hit the high flyers relatively hard.
Looking to the future the market is clearly focussed on the potential for their complex chips in Apple and presumably other smartphones, given their current technical lead and manufacturing specialisation. That will yield great operational gearing as volumes build but I think we should also be watching its progress with photo voltaic projects (sunlight -> electricity) where they have shown significant technical superiority to the technology currently available. That business is also showing signs of being a blockbuster.
I am no scientist but increasingly get the feeling IQE has managed its opportunity well so we will see it exploit its technical edge to produce a great business, spread across a number of commercially different income streams, some of which we can't even conceive just now.
The similarity of technology platforms and their specialist expertise in them will allow them to achieve strong margins and provide a moat to keep them ahead of competition for a long while yet.
This remains my biggest holding and I'll add should the price drop to anywhere near 100p.
No worries! I see from your comments on ADVFN that you've traded this one pretty well.
.JPG)
