Canaccord Genuity Reiterates a 'Buy' on Rubicon Technology (RBCN); Successful Secondary Offering

June 30, 2010 11:42 AM EDT

Canaccord Genuity reiterates a 'Buy' rating on Rubicon Technology (Nasdaq: RBCN), price target raised from $35 to $45.

Canaccord analyst says, "We believe that Rubicon’s successful capital raise de-risks the company’s capacity expansion plan and removes a key structural overhang that had kept some investors on the sidelines. The capacity expansion is accretive in 2011, by our estimates, and will offset the modest effect of the additional 2.2M shares...After yesterday’s significant pullback on no new news, RBCN shares are trading at 16x our new 2012 EPS estimates, which may prove conservative should pricing continue through 2011. We believe that significant earnings momentum, a lack of negative catalysts and a high short interest justifies a 25x multiple, and thus our new $45 price target."

Rubicon Technology, Inc. (Rubicon) is an electronic materials provider, which develops, manufactures and sells monocrystalline sapphire and other crystalline products for light-emitting diodes (LEDs), radio frequency integrated circuits (RFICs), blue laser diodes, optoelectronics and other optical applications.