Who Has The Scoop On RACK?

Discussion in 'Stocks' started by stonedinvestor, Dec 6, 2006.

  1. I've never been in this stock but I've noticed it gets around like crazy. Anybody play it before or now?

    Chart is interesting obvious resistance at $40 but that's a free $4 from here. Moreover some house recently raised their PT to $55 from $45! (sorry I forget who)

    What think you Elite Traders?....
  2. Traded since the post Q2-collapse. Mostly on the long side (swing), though I did go short heavily on that early Nov shooting star. One of my most profitable trades this year. It trends nicely, 95% institutionally owned (for better or for worse), 25% of the float is short. It traded +/- 8% twice last week in 2 days, then you'll have many days like today where it languishes and barely break 1M shares. It was a great buy at $18, and a decent swing trade recently, although I think there are better swings trades out there at the moment.

    No position at the moment.
  3. I never thought I'd say this but Thank You KGB!

    You know what caught my eye and I might be making too much of this but a seemingly innocuous appointment of a board member spiked the stock $2.46!
    Server developer Rackable Systems Inc. (RACK) saw its shares climb $2.46, or 7.4%, to end the day at $35.61. Before the market opened, Rackable named Mark Barrenechea to its board of directors. Barrenechea is a director at private-equity firm Garnett & Helfrich Capital, and was once the chief technology officer for CA Inc. (CA)

    Hummmm. Private equity firm, isn't that where LBO's come from??
  4. Are you going long on that???

    I dont know about that.

    It doesn't appeal to me....

    If you are talking about shorting......Now we can talk!!
  5. I'm quite scared of the stock actually but look at it's perfect staircase recovery from a blow off. That looks like quality to me though with so much of the float closely held and shorted it is the variable coiled spring at all time. Interesting stock. I'm going to wait for them to throw a few more shares at the market and maybe go in on the secondary- I bet it will pop nice after that.
  6. Well folks this is the stonedinvestors favorite kind of trade A volatile stock that gets good news in early december from H&Q:12.04.06

    Over the past several quarters, we believe that Rackable Systems has made substantial progress in laying the foundation for growth in Q4:06 and 2007. We believe this growth is beginning to manifest itself and is driving the Company towards the higher end of guidance. Overall, we believe that the December quarter is benefiting from Rackable's accelerating expansion into the estimated massive multi-billion dollar spend for servers and storage in large scale data centers targeted to support the growth of e-commerce, web-based applications, and streaming media services requiring highly scalable, high-density, and cost-effective infrastructures. Going into 2007, we feel that Rackable is following a very aggressive but prudent business strategy that should enable the Company to expand its customer base and drive margin expansion. Based on these factors, we are reiterating our Buy rating on RACK shares at a $40/share price target, representing 28x our 2007 operating income assumption ($1.18/share) plus ~$7/share in cash. Full Report - PDF

    It takes a nice freefall in a mini correction and now sits a coiled spring at $32.42.
    Ultimate buy point would of been $31.50 but once again I was at the freakin' gym! I've sent this idea up the chain of command to a hedge fund that I know so it's still possible I get the no go. stonedinvestor feels this is a sweet trade to $44 by Xmas! Stay tuned for final OK....
  7. Just follow your instinct.

    Trading is so hard> at any given moment there are 10 or twenty ideas on my desk and some rise in urgency and some fall... some come off watch lists and some remain when they are dead in the water and should be deleted. choosing the right play at the right time and being AHEAD of everybody else is an endless quest. But I started this week feeling RACK I don't know why. Mr. Market gave me a half decent price... I know it's risky but I'm in.
  8. - Wow this has turned into an interesting experiment.

    There can be no doubt this is a HORRIBLE chart! Everything I look for is neg. Normally I would not come near this stock. Why I did is still a mystery to me it's the age old " hunch ". Let's hope that Dr Seus was right and Hunches come in bunches- in this case bunches of cash cause' I'm certainly nervous. It's pick a high beta stock after a market setback strategy. Vs technicals. Can a Santa Rally and a heavily shorted stock reverse what the chart obviously says? Which comes first in indicating a stocks move the chart or
    hunches in bunches????
  9. You should've listened to what the chart was telling you and ignored everything else. Your "hunches" will bankrupt you.

    I covered my 7k short too soon on this broken dog.. missed a nice $25k today..
    #10     Dec 12, 2006