|Written by GSCR Staff
|Tuesday, 11 February 2014 08:05
In yesterday’s Goldman Guide we stated that we have seen some preliminary signs indicating a slow down to a meltdown in the consumer tech sector.
Right on cue, our Market Monitor pick from January 2013 Photronics, Inc. (NASDAQ – PLAB - $8.18) issued downward guidance for its FY14 Q1 financial results in EPS. Additionally, consensus revenue for FY14 Q1 was downgraded to $101 million from $105 million. The news sent the stock on a tail spin and the trading was actually halted at one point yesterday. The Company cited slower than expected holiday sales in the U.S. and Europe as reasons for the lower guidance. Just as a reminder, Photronics manufactures and markets photomasks which are high precision photographic quartz plates containing microscopic images of electronic circuits used in semiconductors and flat panel displays, and this may be a precursor for other firms in the segment as well.
PLAB is up a very solid 35% since our pick last January. Still, on the heels of this news, and the poor technical performance of late, it is time to take profits. Plus, the ripple effect from the big players like AAPL and SNE mentioned in the Guide could have a short term detriment on stocks like PLAB.
Have a great day!
Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.
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