Integrated Device Technology: Short Candidate... But Only On The Trend Bend
- Share price looks considerably overvalued on price multiples such as P/E, P/S, P/CF and P/B.
- Profit margins are anaemic but based on my backtests, companies with comparable low margins have produced strong returns over the years.
- Strong uptrend remains in place with no immediate signs of this trend bending.
- However, the condition of the trend is overbought on daily, weekly and monthly readings.
- IDTI is a short candidate but investors should not fight the trend. Wait for the trend to bend before initiating a short position.