FSI International Jumps 68% In A Month: Time To Sell?

| About: FSI International, (FSII)

FSI International is still a penny stock by any traditional measure. It traded at $3.73 at the end of trading on December 23, 2011. Despite the fact that it does not pick up much press, the company is up 68% in just one month. That is an incredible number and far outpaces the vast majority of stocks. Considering this bounce, it is time to think about if it is time to start selling off shares of the company.

First Impressions

I first recommended FSII in an article published November 29, 2011 which can be viewed here. At that time, FSII was traded at about 50% lower than where it sits today. I accurately felt that the company was trading below where it should be, but I never felt that it was going to be this much higher this quickly.

Some Game Changers

The company had two major events that occured between the first recommendation and now. The first event took place on December 1 when Semiconductor producers gave FSI International follow on orders for their Orion system. This event caused the stock to jump some 14% on December 1 alone.

The second event that occured was the Q1 of 2012 earnings report release for the company. This happened just a few days ago on December 20th. The earnings itself were lower than expected. The company reported a loss of $0.08 per share compared to an expected loss of just $0.06 per share. However, FSII was able to raise its guidance on what they expected to happen for the next quarter. This along with a strong market in general in the last few days have helped to move the stock even higher. That brings us back to the original question: Is the stock a sell at this point?

Take Some Chips Off The Table

This one is truly a tough call. All of the news that has been coming out of the company seems to be largely positive. At the same time, the stock is up so significantly in the last month that it is difficult to not take some profit. The biggest factor that would encourage someone to actually leave their money in the stock is the expected earnings per share of $0.57 for 2013. That in itself is almost enough to keep money in the company. However, I feel that it is time to start taking those profits and get out.

The last two quarters have both been earnings disappointments for the company, and it does not appear that the fair value for the stock for 2012 is much higher than the current stock price. In other words, I feel that the company meeting its earnings for the full year of 2012 has already been baked into the stock. I do not feel that there is little elsewhere to go but down. Might as well take the massive profit that the last month has given and run with it. There is no telling where the overall market is going and it could drag FSII down from these levels. Sell it now and use the return to find more great opportunities in 2012.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.