Silicon technology company GT Solar came public (with the stock symbol SOLR) at the height of solar-power stock mania in 2008. As you’ll recall, the investment world then quickly lost interest in the sector. GT spent the next several years diversifying, including acquiring new sapphire-crystal technology by buying a company called Crystal Systems in 2010. Then last year, it changed its name to GT Advanced Technologies, and its ticker symbol to GTAT. Now, as Canaccord Genuity analyst Jonathan Dorsheimer explains below, the company may be on the brink of a huge new market opportunity. Here’s his recommendation.
“We are upgrading GT Advanced Technologies, Inc. (GTAT, $7) on increased buzz around potential smart phone applications. We believe that the smart phone cover ‘glass’ opportunity for sapphire is becoming more realistic based on our work in the supply chain and GT management’s body language. At our growth conference this week, the company directed focus away from its traditional solar and polysilicon businesses and toward sapphire — and specifically to smart phones, more so than we have seen previously. Clearly this was a major focus of investors, given the large potential of this market. Conversations within the supply chain at both incumbent sapphire manufacturers and equipment suppliers have hinted at mobile applications for over a year. Lately, these conversations have led us to believe that the major handset manufacturers are getting closer to making a cover application a reality. While GT management was very limited in what it could disclose, body language, including the fact that the majority of its webcast presentation revolved around smart phone applications, leads us to believe that a win is a possibility, even if split among a few other suppliers. Upgrading to Buy, raising price target to $9.”
- Jonathan Dorsheimer, Canaccord Genuity, August 17, 2012