iRobot Selloff Is an Opportunity to Buy Shares on the Cheap

NEW YORK (TheStreet) -- iRobot's (IRBT) robot vacuums and other products help you clean the house, and you can clean up on the stock if bought now that it is down approximately 30% from its recent high.

This is a company that reported better earnings last month than the previous quarter. It is expanding globally, including in China, and has new products in the pipeline. Shares, at around $35, are up a fraction for the year to date but up nearly 7% for the past 52 weeks.

And yet, IRobot trades close to its low point for the year, $34.16, with a 52-week range of $28.90-$48.36. After hitting the yearly high on March 5 the stock has been in a downtrend since that point.

I think that is unfair. The company beat analyst expectations by 6 cents per share and its all-important guidance was optimistic. Shares look oversold at these levels. That could bring the short covers in earlier than they had initially thought.

The short interest in the company is more than 30%, which can be seen as a positive especially if shares continue to go higher. iRobot has just traded up more than 10% from the lows -- if the current upside extends into the low $40 range this could be enough to scare off the shorts. I think it could reach $50 over the next year.

Rapid growth in the robotic application space has not really taken off in the mainstream just yet, but the longer-term opportunity is great. Here's the chance to get in at the early stage.

Michelle Stacy joined iRobot's board this week. She was one of those responsible for the exceptional growth at Keurig Green Mountain Coffee (GMCR). With her on board to help iRobot grow brand awareness, accelerate innovation and ultimately make the brand into a worldwide household name, I can see the company's valuation going to $5 billion from the current $1 billion.

Could $100 a share be in iRobot's future?

At the time of publication, the author held no positions in any of the stocks mentioned, although positions may change at any time.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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