Saturday, April 3, 2010

Interesting read on DCTH by drllee

Mr. Lee also known as "drllee" from investorvillage, is one of my admirable fundamental investor who has been tracking DCTH for 7 years now. He has been accumulating shares from 2003 and until as late as 2009 when non of the wall street people talks or even heard about DCTH. Here we are a year later the stock hits new high as of last week to $9.38.

Below are some of his thoughts regarding the recent run-up in share price of DCTH. Click here to see original post.

Hi lililarlar,

First, the short interest being quoted is for a settlement date 3/15, meaning the number of shorts is 2,711,800 on that date. We have no short interest data that tells us what the short interest is currently. Who knows? Given the recent run up in pps, a contributing factor could be short covering.

"Assuming good trial#3 result, wouldn't the current buildup on pps is factoring that already and the jump, again assuming good result, would not be as spectacular as it is supposed to be?"

Whether this current run up is "factored" into what the price will be after data release no one knows. Funny thing about the markets is the perceived value of a company/stock by investors. After data is released, if investors believe the data to be very compelling, then investors will place a certain value which will be reflected in the pps. Analysts will then justify their projections by whatever metric they each decide to use, and in this way, set a target share price. What that will be know one knows.

One thing we who have held DCTH shares for years know, is that there is underlying value to the technology. This is why a lot of us have stuck it out through thick and thin for years. Currently, the majority of investors are discovering what we already know. These late comers are now the ones who are buying the shares in a bidding frenzy, which may continue. But the point is, people are now establishing in all this buying and selling, a value that they feel better reflects what the coming results will be. Included in this it would appear that traders have established a bit of frothiness in the share price, given the daily run up without any period of consolidation. I do think we are in store for a correction to the share price as the uptrend is unsustainable in the short term. When this correction will occur, I do not know, but it should not distract us from the long term potential of the company if the yet to be released results is as good as we think they are. Further appreciation will no doubt come if the company continues to successfully execute its business strategy.


Wish all DCTH stock holders well (including myself ofcourse).

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