David Macaluso

The Short Case On Unisys: What Goldman Knew

Microscopically analyzing UIS's balance sheet to inspect each numerical component is NOT the answer to forecasting which direction this stock's price is going. We already KNOW, the price is rising, and will continue to rise until the market perceives that the turnaround is not happening. There is not a linear formula to effect profitability. Downsizing is not bad. Selling an asset is not bad. Goldman is jumpy and tried to anticipate the general reaction to UIS's quarter, and they were wrong. The profit taking on Wednesday was consistent with a large number of shareholders waiting to see if the Jan. earnings number could create a bounce, and when it didn't they took profits that were available.
Unisys is a well connected, old firm with deep roots. If Goldman is uncomfortable holding UIS, so be it, lots of people would be. Until and unless there is a negative event of great proportion, the concensus is that Unisys is making positive progress. By definition, reestablishing profitability through the entire organization will skew balance sheet numbers. I don't doubt that there will be an eyebrow raising number or two on their balance sheet for a while to come. The market is speaking: UIS is intact and moving forward. This stock will top $10 before April earnings. There is no short play here.

The Short Case On Unisys: What Goldman Knew

Hyperanalysis does not become you. The market is ALWAYS right, and the market has buoyed this stock on a steady climb since July. Anyone who bought long in July, August, September and later is sitting on a substantial profit. Regardless of how you try to read between the lines or divine some deep meaning from a balance sheet, the market perceives that this company is making positive progress on their turnaround. The price of this stock will continue to go up until it stops going up. Your observations may be 100% accurate, but the market determines the price of a stock, the numbers do not.