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IQE price collapse?

lse:iqe

#1

Hi all,

As poor as the design of this discussion forum is with no improvement in sight, considering the ongoing price collapse here, I’m surprised there’s been no comment since 27 days ago. IQE making year lows every few days, with no obvious support level in sight. Long-term chart also looks fairly dire.

My brief background with IQE: traded it to VG gains for months (trades posted live on another forum). But more recently find myself sitting with long positions well in the red: at 90.60, 96.90, 100.20 & 104.80. SP was seeing levels of 101+ & higher as recently as 31 August. It’s the only AIM stock I hold.

I’ve no plans to bail at these levels as one anticipates support being found soon. But that’s been the case for a few weeks. I also recognise that many AIM stocks can be, frankly, a bit of a dodgy racket. Extreme SP volatility is often seen on little fresh news & relatively small volume, with often zero input from the board to try & steady the ship.

Disclosed short positions on IQE still high, but recently falling to 9.88% as I write, so that at least seems one small positive.

https://shorttracker.co.uk/company/GB0009619924/

Bar very poor technicals, I’ve little idea why the continuing drops. Last report seemed a mixed bag, but far from dire.

I shall hold on for now. But a return to circa 105+, be it months away or longer, will see my final exit.

GLA, in case anyone is still about. :wink:


#2

It would be a start if they named a new CFO, previous one died in an accident back in April.


#3

Hi @Lastemporer

Indeed, as much as the loss of the highly regarded Phillip J Rasmussen in early April may have affected morale at IQE, I’m surprised there’s still no announcement on a new CFO. That aside, though IQE’s last report saw interim profits down, that was put down to one-off factors. But forecasts remained positive for further growth. All in all IQE seems well oversold, but what do I know? - Regards. Edit: typo.


#4

Maybe of interest, IQE finally appoint a new CFO. SP up to 85+ as I write. Over 10p higher than when I started this thread merely 4 days ago. - GLA.

http://www.iqep.com/media/2018/2018/10/appointment-of-chief-financial-officer/


#5

I’m surprised the share price hasn’t increased by more. This looks a first-rate appointment - someone at a very high level from outside the circle. I wouldn’t be surprised if he’d been brought in with more than just an eye on a possible sale of the company to coincide with the doctor’s retirement. Not sure how long Pullen has been with ARM but he’s experienced and has clearly done well, judging by his previous appointments.

Bet IQE wish they hadn’t appointed KPMG (where do we sign, Mr Carillon?) as if to attribute blame for the accounting shenanigans the year before to PwC - it’s the company’s responsibility to get the accounts right and what they did imo was just interpret things differently (it’s called ‘accounting policies’ and gives great ‘flexibility’) to make the latest year look better. The old tricks are the best.

Hopefully IQE will put all that kind of nonsense behind them and report fairly from now on.

The shares are still trading on a p/e of close to 50, which is too high imo. Until sustainable earnings at a higher level can be demonstrated there’s limited scope for the shares fairly to trade much higher in the near term. That doesn’t mean they won’t, because hysteria combined with lack of knowledge and understanding of those desperate to buy cancause strange things to happen to share prices.

Wonder how all those clever people are feeling who bought into Dr N’s bullcaca shortly after he’d dumped a whole pile at about a third less than he persuaded them to pay ?

GL

all imho/ dyor


#6

Hi all,

Sold one long at 96.50, buy 90.60. Booked nearly 6 points on the spike, minus costs, just to increase cash position as leveraged. Still hold longs at 96.90, 100.20 & 104.80. - GLA.


#7

Terrible day for IQE on worryingly high volume. Closed at 67 from 94.25 previously. Glad I reduced recently, but it looks like the remainder of my longs will be a L/T hold. News below a significant factor behind today’s falls. - GLA. Edit: typo.

https://www.nasdaq.com/article/apple-is-slashing-iphone-production-orders-for-its-new-models-analyst-says-cm1054400


#8

Re-added 4th long at 71.10. Target loose, but will be tempted by any return to 80+. - GLA.


#9

Hi JD,
It’s been a while since I traded IQE, and even then for very short trends. Far too volatile for my liking and driven way too high on sentiment it seemed.
The old adage “let the trend be your friend” would seem to be very much in evidence for the last year, with that trend steadily down. There is a comfortably wide spread in the trend allowing for some good profit opportunities from short term trades.
Your latest entry at 71 would seem to be near the bottom of the trend line, and your target of 80+ would seem not too optimistic, even a trifle conservative. I’m even tempted to re-enter for a similar trade.
As for your long holds though, perhaps, with hindsight, an exit early November would have been the best chance this year.
Good luck.


#10

Hi Zanshin,

Thanks. Valid points. Agree there’s a chance we’re near a floor, but it seems still too early to call it with certainty. Next few days will be more telling. We need to consolidate at higher levels backed by volume.

Optimal entry & exit points always difficult to get right. Few sell the tops or buy the lows consistently, bar the lucky. Though early November was an opportunity to cut altogether after the previous strong bounce from 72.90 lows in October, in perspective, I’ve traded this successfully for months before. Many other live trades posted on BARC+ BB where Soi & others are active. So it’s all relative in a wider context. Mistakes are inevitable, including bigger ones.

As you’ll know, many AIM stocks frequently see extreme volatility. IQE is no different. Par for the course for this market.

Mindful of a bullish bias even if subliminal, I’d only add that just as it seemed overbought earlier in the year, it’s perhaps oversold now. Price action often needs little rationale. Sentiment can be a main driver in either direction. But looking further ahead, just as it was overbought before largely on greed & euphoria, I’ve little doubt it may be again later.

That said, I won’t add more here whatever happens. Once I’ve closed the last of my longs, I’m unlikely to re-enter anytime soon as these are leveraged positions. Like all leverage, they carry added risks if other longs elsewhere are also going through bearish cycles for extended periods. - Regards.


#11

After an unprecedented 8 consecutive days of higher closing price I’ve decided to take a small profit and close for now. I prefer short term momentum trades with such a volatile SP and expect to be able to buy back lower in the next few days.


#12

Closed 77.80. Booked decent gains as while it’ll go higher later, an over 10% rise in a day is too much to let slip when leveraged & still holding longs higher up. - GLA.


#13

Re-opened 4th long at 79.60. Maybe too early, but the trend here looks firmly back up & a revisit to much higher levels later seems far more likely than not. Plus I need to go out. Target on this circa 90. - GLA.


#14

Hi JD,
Surprised you re-entered higher than your recent sell, given the already strong short-term rise.
I was working on the upward trend reversing after 8 days of consecutive higher closing prices when I sold. I missed the spike up after I had sold, which would have doubled my profit, but as you recently pointed out, only the fortunate few trade the extreme highs and lows.
After a strong rise as we have just seen IQE tends to retrace for a few days prior to resuming the up trend again. Looking for around 70 to re-enter myself, with a mid eighties selling target.
Good luck


#15

Back in at 70 this morning. Just about everything has slumped today. It’s not only the likes of IQE that is volatile nowadays, with one day gains reversed the next for many stocks, then repeated, but mostly with a downward trend.
I’ve set a limit sell at 76 for now, as I see a straight surge to mid eighties, my previous target, unlikely. Perhaps the markets will settle after next week, with the significant vote out of the way and as the season of good will approaches, ho-ho.


#16

Hi Zanshin,

Thanks. I hope that goes well for you. Hard to put any timeframe on it.

Re your previous comment: I wanted to reduce my overall average again with SP still well below my other longs. As mentioned, I was also going out that day. Though the SP reached 81.90 later that day, frankly, I’m no longer even fazed by not catching near the bottom when entering new longs. Especially in current market climate.

Longer-term my plan remains as before, unless closing support at 56+ from mid November is broken. To ride this thing out, with occasional trading, then exit completely. Only if support is lost would I consider taking a hit.

Whilst recent SP falls have seen very small volume, I’ve never felt easy about trading any AIM stocks. IQE reminds me why. Much lower volumes only add to volatility. But with most stocks taking a hammering recently for macro-factors, this could go lower still or be back to 80+ sometime next week. Such is the volatile climate. - Regards & GL.


#17

Hi JD,
Thanks for your reply.
I agree with you that missing out on low/high buy/sell points is not worth worrying about. Provided you can sell at a higher price than you bought for, then a profit can be made. I am quite satisfied if I can take a small profit, and then repeat, rather than hold out for a higher selling price and lose out as the SP reverses, something I have done so many times and regretted. I have a portfolio filled with such trades patiently waiting to break even again.

I also echo your thoughts re AIM stocks, many of which show so much promise, but fail to deliver on that promise, to become worthless as their management sing a siren song of hope. Obviously not true of all, but I have been bitten by enough to keep me wary of them.
Sadly, larger companies are not immune either, where often management ambition exceeds its abilities. I’ve been stung by those too.

With the whole market down again, it is, as you say, the macro-factors which are driving much of the volatility, and why I am trading short term momentum and returning to cash when I chose to.

Good luck with your trading plan.


#18

Zanshin,

Thanks again. Much agree & your approach here is a prudent one. Not least considering the climate. Lock in profits as available, then try to repeat. Mine isn’t very different.

What we’re seeing across markets recently is mostly sentiment-driven. Any logic temporarily suspended. Fear dominates leading to panic selling. A very difficult climate for all longs, including across the FTSE which is being hammered again. Hard to be sure of anything much in the short-term. - Regards.


#19

whats that tool you’re using?


#20

Hi @freedom-thirty5,

Only SBs here. DFTs via City Index. No expiry dates. Ditto for ITV & TSCO. Perhaps needless to say, I prefer real shares as they’re more suited to longer-term holds. Less stress. However, bar dividends, most of my share dealing funds already in LLOY , VOD & BARC.

For now, I intend to hold on to all I have through the ensuing storm, pick up yield, book any gains &, eventually, build & keep a bigger cash position. - Regards.