Dot Hill Systems: Recent Sell-Off Offers Clear Path To 95%+ Upside By Year-End With Limited 16% Downside

Summary

  • High investor expectations and in-line full year 2014 guidance led to a steep sell off of Dot Hill's shares.
  • This sell-off is unwarranted as Dot Hill over delivered for the full year 2013 – creating an attractive investment opportunity.
  • Management is executing and Dot Hill could deliver 95%+ upside by year-end with limited 16% downside risk.

Opening:

Shares of Dot Hill Systems (HILL) have declined over 30% following the company's recently reported 4Q results, creating a compelling buying opportunity. With shares up almost 4-fold in 2013, and almost another 50% in 2014 prior to the earnings report, expectations were high. The company's in-line 2014 outlook, coupled with soft 1Q guidance drove the sell-off. However, with significant wins slated to ramp in 2014, and a management that has executed, and under-promised and over-delivered in the recent past, there's every reason to believe Dot Hill's growth and margin expansion story remains intact. I believe shares of Dot Hill should see 95% upside and a return to recent highs over the next few quarters, and could be a double or more over 12-18 months, if they execute their plan.

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Dot Hill Systems: Recent Sell-Off Offers Clear Path To 95%+ Upside By Year-End With Limited 16% Downside

Author: Anonymous

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