FARO Pop, Sag & Year End

Going back to the days when I was in the industry, I once invested in FARO at 2 to 4 bucks a share and sold out at 25.  This was after inviting them in to give me a demo on one of their Faro Arms over a decade ago.   This gizmo would take the place of bigger and bulkier coordinate measuring machines.  I didn’t end up buying it because it was just a little beyond our needs at the time.  Besides, my main motive was due diligence on the company :-).

Since then I have traded the stock occasionally because it is a quality company.  While it is associated with the 3D Printing, it really has little to do with that over hyped industry filled with wildly over valued items.  Most recently I bought FARO (itself far from a value stock) as one of a host of ‘bounce long’ trades as noted in NFTRH.

faro

So far so good.  Even though it popped and then sagged in-day, it’s a +7% if I decide to book it now.  It’s a low volume trader, which is why I don’t talk about it much.  Faro just announced solid earnings and with the idea that machine tool purchases usually spike at year end (for tax related reasons), I wonder if I might hold it longer?  Here’s the graph again from EDA.

machine.tools

As noted in a recent post at Biiwii (and well before that in NFTRH), year end spikes are the norm in the industry.  FARO is part of that.  Depending on what the market does short-term I am going to keep an eye out for manufacturing equipment, as well as year-end tax loss candidates (a few of which I already hold and one of which is nicely profitable).

It’s getting to that season again folks.  But first, the Fed and coming market reactions need to be dealt with.

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