HIMX Slumps Even More

The investor relations team at Himax Technologies (NASDAQ: HIMX) would like last week back. The stock broke out to yearly highs at $13.95, only to give all the month’s gains back by losing 21% on the week of Dec 4 – 8.

Here is Citron’s tweet on December 6 that took HIMX stock down. Markets may be giving Citron too much credit for the short-attack. Short interest surged by almost three-fold in the last two months (from 08/31/2017 to 11/15/2017), or from 13.9 million shares to 30.55 million shares. Though the short-trade returned just 7 percent, those who bet against the AR/VR and 3D sensing supplier at the end of November are up around 25%.

HIMX stock is ultimately too expensive in a P/E basis but as it transitions from legacy businesses towards 3D sensors and WLO, earnings will ultimately match past growth of 37%. Himax will also achieve next year’s ~75% EPS growth if its new plants and investments come online on schedule.

The company still needs China-based smartphone manufacturers adapting the 3D sensor co-led by Qualcomm (NASDAQ: QCOM). Taiwanese firms must also include the technology in its next smartphone refresh. Chances are good this will happen, since the market is moving towards this.