I got outI got out last week at $15.53 and at the time was happy about it. Needless to say I'm not so happy today. Having said that, the reason I got out was that this stock had moved quite far in a very short period of time and I felt that it had gotten ahead of itself. At today's prices I'm even more sure of it.
Looking at typical p/e ratio's, if ATI earns $0.25 this year we are currently trading at 71 times earnings. Assume it does better than expected and earns $0.50 this year, it is still trading at 36 times earnings. That's still a pretty steep premium in this market for a growth company. Considering that ATI is in a very competitive industry and could very quickly lose ground to NVIDIA and therefore it's bottom line would be hurt, how can the market support these p/e premiums? I can see maybe 20 to 25 times forward earnings but not any higher. Lets give them the benefit of the doubt and say that they will earn between $0.40 and $0.50 (Cdn) this year. At 25 times earnings that puts the share value at $10.00 to $12.50.
If I understood the rules behind shorting and had some experience at it I think I'd be pretty tempted to do so at these prices.
Cheers.