Time to take profits and move on.
On Sept. 8, the day before Apple unveiled the newest versions of its iPhones, rumors started circulating the sapphire screen hadn't made the cut. That day GT Advanced shares started falling and they have since been down by as much as 35%. On Tuesday alone the shares fell to an intra-day low of $11.10 from $17.15. Shares currently trade around $11.60.
Does this mean you should buy GT Advanced shares? Well, even with shares down this low, don't confuse low with cheap.
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Despite the recent decline, shares have been up over 33% for the year to date thanks, in part, to those rumors. So if you're in the stock now, lock in profits and move on to the next great idea or risk losing 25% more.
Raymond James analyst Pavel Malchanov believes these shares are still too expensive. At 22 times forward earnings estimates of 54 cents per share, according to Yahoo! Finance, it's hard to argue against Malchanov's position.
Of all of the analysts who cover GT Advanced, the lowest analyst price target is $9, which represents roughly 25% decline from current levels. Hanging on to a stock on hopes that it will recover is one thing, but for a company that has yet to post positive earnings and recently posted year-over-year revenue decline of more than 60% that's not a risk worth taking.