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  • After Great Yearly Performance, It May Be Time To Lock In Gains In This Stock 0 comments
    Jul 9, 2014 11:04 AM | about stocks: ATTU

    Stocks continue to kick the can sideways as more continued conflicting information hits the news waves. Amongst the data that was reported in the U.S. today was that the CPI (inflation index) rose .3 percent, past economist predication of .2 percent. This is positive because it shows prices are rising at a reasonable to slow pace, further squashing deflation fears earlier this year.

    However, the Iraq situation continues to deteriorate as ISIS militants continue their march and are now only 40 miles away from Baghdad. President Obama and his administration have deployed 300 U.S. Marines and two warships to the region to bolster security at the U.S. Embassy in Baghdad. Advancing Jihad rebels continue to affect oil production as Iraq has shut down its largest producing field. This furthers the uncertainty and anxiety in the markets. Continuing on with stocks that may be worth avoiding, I will be taking a look at Attunity Ltd (NASDAQ: ATTU).

    Turning to the fundamentals, Attunity has a market cap of $121.43 million and is currently rated a 'buy' by analysts. Price to earnings comes in at a widely overvalued 407.5 and forward price to earnings is a more manageable 21.73. Price earnings growth comes in at a steep 14.82, price to sales is overvalued at 5, price to book is also overvalued at 9.16, price to cash is at 57, and price to free cash flow is at 60.72. The company has no debt, but barely any cash as seen with cash per share of 0.14. This gives the company an unstable and concerning current ratio of 0.70.

    Earnings are expected to climb 233 percent this year, 83 percent next year, and 27.5 percent over the next five years. Institutions have been backers of the stock, as can be seen with high analyst predictions and institutional transactions up over 28 percent. Management efficiency is unbalanced with return on assets of 2.4 percent, return on equity of 6.5 percent, and return on investment of 28.10 percent. Margins are also unbalanced with a gross margin of 91 percent, operating margin of 3.7 percent, and profit margin of 2.5 percent. Attunity is up 56.73 percent in the past year, but down 21.33 percent year-to-date.

    The enterprise software company out of Israel certainly has some positive features and negative features. Starting on the positive note, the company has no debt, institutional backing and great growth estimates. However, even with a forward price to earnings of almost 22, the stock is still considered overvalued and the stock's entire line up of valuation ratios suggests a major overvalued state. Additionally, the significant lack of a cash reserve is concerning as it will be difficult for the company to operate during a downturn.

    Be sure to do your own research before investing.

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: ATTU
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