EMKR has one of the best stories in the small-cap space right now. Fundamentally, they continue to outperform quarter over quarter with substantial increases in their financials. Read their latest release for the details that we covered in prior articles. Technically, EMKR has found significant support at the 200EMA this week. In prior trading periods, this level has served as a fantastic area to add or open new positions.

Our current price target – which is in line with all sell side targets – is $10-$11 now that EMKR has found support and begins to consolidate along this price level of $6.75 – $7.00.

What are the key takeaways here?

1)     Hedges funds continue to add to EMKR.

As of December 9th, Northern Right Capital Management, L.P. just filed a “Statement of acquisition of beneficial ownership”, which is also known as a 13D. In the filing, it appears as though Northern Right Capital Management, L.P. claims to own 1,235,464 shares. This represents 4.8% of EMCORE Corporation.”

2)     Furthermore, the company is evaluating a cash dividend / distribution right now and plans to implement that in the future:

“At this time, the Company expects to approve a cash dividend or distribution to shareholders, with the timing and amount to be determined in a few months following completion of the review.”

3)     From a technical analysis standpoint EMKR is trading above the EMA ribbon, with continued bounces off of the 200EMA over the last several quarters. Also, EMKR is seeing continued spikes in volume on large buying candlestick days. An additional indication buying pressure is there.

 

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4)     Finally, the general consensus from all sell side banks is a price target of $11 or 50% upside to the current price on December 10th.

(https://www.tipranks.com/analysts/gus-richard)

In our opinion, this latest dip to $7 is a steal to pick up more shares as our initial target is $11 due to the above stated reasons.

DISCLAIMER: We are long EMKR and will not be looking to add to our position within the next 72 hours of this publication. K Capital has been long since $7.04 and locked in a 14% gain before the earnings call. We sold half our shares at that time and added during the week of December 11th post the earnings release and the week of December 18th.

Learn more about our volume strategies, technical patterns and packages at K Capital Advisors.com