Some more selling still, but the sellers are wrong..
Ellie Mae’s Shares Sink Further: Is There Value At These Prices?
Disclosure: I am long ELLI.
Well, we seemed to have ran out of a string of luck making calls on the shares of Ellie Mae (ELLI). We first advised to buy at $15, then argued the stock was getting expensive in the high 20s. Then earlier this month a vicious sell-off took the shares to $19 and we argued the sell-off was overdone.
On cue, the shares recovered, and in the meantime, Ellie Mae produced stellar results and increased guidance for 2013, but the shares slumped while we concluded from the earnings that they had only one way to go and that was up. What’s going on? Obviously, with the stellar earnings result still fresh, we have no reason to re-evaluate fundamentals.
So the first thing we have to say is that we’re not losing sleep over the renewed selling, we think it won’t last, unless there is a serious correction in the market, needless to say. There are a few candidates for explaining the selling, which has taken part on fairly high volume. [Read on here]
