Why OSI Systems Shares Rebounded
Nov 16th 2012 4:15PM
Updated Nov 16th 2012 4:18PM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of OSI Systems have rebounded today by as much as 17% after numerous analysts defended the company following yesterday's 36% plunge.
So what: Yesterday, there were allegations that the company may have manipulated test data for its body-scanning systems and was trying to defraud the TSA and the government. The company adamantly defended itself, and today it's getting reinforcement from a number of analysts.
Now what: Oppenheimer is calling the drop a buying opportunity and has upgraded shares to outperform, believing the issues will be resolved without any material impact. Benchmark feels the same way, reiterating its buy rating and noting that the body scanners in question aren't a major source of revenue. Last but not least, Stephens also thinks the sell-off is overdone and still has an overweight rating and $93 price target.
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