Wednesday, February 7, 2007

Syntax-Brillian Corporation (BRLC) Earnings Thursday Morning

4pm edit/correction: earnings to be released before Thursday's opening bell.

This one is a bit more interesting. For anyone who doesn't know, this company designs and distributes the Olevia line of HDTV and LCD televisions. There's sparce analyst coverage on this company which is a positve and better yet in Cramer's "lightning round" on January 23rd he was bearish on this stock (the stock has surged nearly 20% since then).

The company in early January upped guidance and the few analysts who cover it (CE Unterburg, CIBC, BMUR) have buy ratings on the stock. As the chart shows, this is clearly make or break time for the stock. Short interest is way up there at 4 mln shares, or a whopping 32% of the outstanding meaning gap risk is HIGH. $8 is clearly key support. Key risks going into earnigns are what margins look like and what kind of outlook is disclosed in the conference call which will be held tomorrow morning. Bad news means the gap in the mid $6 area could be re-filled; on the other hand, this stock has gap-rally potential if the company is able to say it continued to fire are on all cylinders going deeper into Q1 and getting more retailers to carry its brand.
The Feb10 calls look like a cheap enough shot at .55 that I may just pick up a few, but literally not many - just for some side amusement, as in if you buy a ton of call options because you read this you will become severely flatulent, stub your toe badly on something and also lose money!!

MXIM also posts tonight. Given the weakness in NSM results recently, can't see how anything good comes from MXIM's report. Put volume in the MXIM Feb30s running less than 2 to 1 ahead of the call volume, but I just can't get excited about going there.

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