Summit Research Says 'Ignore' Rubicon Technology

Summit Research issued a company note on Rubicon Technology, Inc. RBCN Monday with a Hold rating and $8 price target.

Analyst Srini Sundararajan noted that “Sapphire stocks wax and wane between what is likely to happen regarding alternative uses of Sapphire. Yes, there is some speculation that Apple is working with Foxconn on perfecting Sapphire. However, we would suggest investors to steer clear, and climb in only when an upswing seems certain rather than on...half-baked news.”

Sundararajan thought “that RBCN’s sapphire is too pure and needs to be suitably doped to reduce the brittleness. We would suggest that sapphire’s brittleness appears likely to prevent its use as a display cover for smartphones for now. But, Apple will keep at it, and, KEEP AT IT, and, ultimately, (based on our knowledge during our own graduate work) we would speculate that a company of Apple’s resources can re-engineer the surface and the bulk of sapphire to make it less brittle.”

The analyst note concluded that, “Our rating is still HOLD, based largely on its cash hoard and its book value; however, as we have maintained, it is an “ignore” or “sidelines” HOLD. We would caution investors that RBCN has ALWAYS felt that the second half of next year would be better – just check the transcripts for the last several years. The sooner the new CEO starts to sound different, listens to investor relations, and uses a different playbook from that of the previous CEO, the better.”

Rubicon Technology recently traded at $4.75, down 7.59 percent.