This post was just published on ZYX Buy Change Alert.
Here is the relevant information about FNSR that you need to know.
- AAPL has made a large commitment to FNSR. This is a positive for the future. However, there is no immediate benefit to FNSR because the plan is for AAPL to buy more components from FNSR in the future and not right away.
- We have previously written about weak iPhone X sales. This is casting a doubt on the future of high priced phones from AAPL and in turn it is hurting FNSR.
- FNSR is providing FaceID components for iPhone X. There are many reports that FaceID is not working well.
- China has instituted a policy of sourcing more optics components from within the country. This is hurting FNSR.
- There is a negative take from SANM earnings. SANM is a contract manufacturer. Our take from its earnings call is that demand for products that use optical components from FNSR is falling. This also includes, OCLR, LITE, VIAV, and AAOI.
What To Do Now
Consider reducing the position size to 25% of full core position on bounces. Also if you can afford extra risk, consider changing the stop zone to $16 to $16.43. On the other hand if you cannot afford extra risk, consider honoring the existing stop.
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