Super Micro Computer (SMCI)

Has momentum and will keep going higher.

Always too many surprises -- regulatory, financial, etc. In the right business, and they've been able to scale. Other companies have better visibility and transparency.

It'll problem bounce to $30, then sell. Accounting irregularities mean sell in his book.

Technically, it looks awful and revenue growth is slowing. Profit margin isn't expanding.

It still has accounting issues.

Structure of it doesn't make sense to him; they effectively create their own demand for the stock. He buys for Canadians who want to preserve their capital. The volatility on this name would cause heart attacks. A trading name.

Their accounting problems are long enough behind them, and SMCI is cheap compared to its peers.

They finally filed an annual report today. Some investors had feared they would be de-listed. Shares have climbed because they finally filed, not because they did something good.

Take profits; it's had a parabolic move. Watch NVDA earnings next week.

Potential big beneficiary of AI. Doesn't love that it had issues filing its financials late. Also doesn't love buying after such a move up like today. As a value investor, he looks more to second-derivative AI plays such as power demand.

The main issue was uncertainty: the auditor situation, the Nasdaq listing, and so on. Some of this has been cleared up, and the company has vowed that it will meet the listing requirements by the deadline. The outlook this week was pretty solid. The worst is likely over here. When it cannot get worse, stocks typically go up, and we think that's occurring now, with long buyers and short sellers covering, pushing up the price. There are still risks about how long the data centre cycle will last, and the company will alway likely be 'tainted' after having two accounting scares in less than six years. But it is very cheap, and any positive developments will likely see an amplified up move. We would rate it a HOLD but is more buyable for the more aggressive types than it has been in some time. The listing is still a big risk, but this will be resolved one way or the other soon. We still do not have enough 'trust' in the company for a strong endorsement, and if we miss it we can live with that. 
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Down 75% from its high, not an opportunity, because accounting irregularities always mean sell.

SMCI has a new auditor, and Nasdaq has given it an extension to Feb 25 to file its financials. We would give 80% odds it hits this deadline (so, 2025). We would still consider it a risky stock, but investors are buying into the possibility that the worst is over. It 'probably' is but of course some other bugs could still crawl out here. The lawsuits will continue, but are very hard to prove. We would expect some minor settlements here. The company has ample short term cash, but cash flow needs to watched. It raised money several times last year and an issue now would be a bit surprising to us. It is a stock with lots of upside potential, but still plenty of possible downside risk as well. Some good news though would likely see an amplified positive move. 
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