This recent IPO stock is printing new highs on a regular basis. Here’s the analysis for Ambarell..
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I want to talk about Ambarella ( $AMBA Ambarella Inc ). The basic theme is this, you can trade it, it’s volatile enough, but it’s an IPO; this is when the stock first started trading, late last year; the trend has been pretty much up. I look at this stock as more of a hold than a tradable or a trading stock. Again, you can trade it, bang in and out of it, and that’s fine. But if you look at the highs they’re pretty clearly marked right here.
By the way, the blue line is where the stock is trading after hours as I produce this video. The reason is because they announced their earnings and they’re actually pretty good. You can look at their website to see exactly what they do, but they are essentially a semiconductor company; they create or manufacturer low-power, high-definition video compression and image processing semiconductors. It’s for security cameras, TV cameras, and all those cool cameras that everybody seems to be buying these days. So it’s a high growth company. Their revenue was up 31 percent from where it was last Q1. Their earnings were sixteen cents a share verses six cents a share from their last Q1; so the growth is still pretty strong, it’s screaming strong. This stock is up at the high end of the channel.
So what’s the trade? The trade is really, in my view, the investment; the stock absolutely fit our IPO strategy no matter which way you cut it. If you’re looking at this as the enthusiasm high, then the breakout above here was the buy point with a retest and the stock moves higher from there. If you’re looking at this as the enthusiasm high then the break out here and the retest worked. If you’re looking at this as the enthusiasm high, are you seeing a pattern here? The breakout and the retest worked. No matter how you want to do this analysis the stock keeps printing higher all-time highs, it’s likely to do one again tomorrow.
So if you’re a short-term trader then you’re in this stock, you’ve got some nice money, go ahead and take a little profit if that’s your deal. For me, again, this is a longer-term trade and I think that’s really cool; I’m just going to go ahead and hold this stock. You trade it how ever you want to, but I think, from a long-term point-of-view, when the company is doing that great, when they’re just blowing away the quarter from a year ago, like they are, I think this stock can go much higher from here.
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