Compass Point Says Coinstar (CSTR) Has 'Short Squeeze Potential'

December 17, 2012 10:39 AM EST
Get Alerts CSTR Hot Sheet
Price: $19.29 -1.08%

Rating Summary:
    5 Buy, 9 Hold, 2 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 13 | Down: 22 | New: 54
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According to November data, 11.7 million shares of Cointstar (CSTR) were sold short, up from 11.3 million shares sold short as recorded half way through the month. This level represents 35 percent of the shares outstanding, noted a report by analyst at Compass Point. In their view, the stock has "short squeeze potential".

"What's not in current estimates is the company's ability to cut back Redbox growth capital expenditures, materially," said analyst Douglas Greiner.

"We forecast these outlays to be $141 million this year and $154 million next year. Our FY'13 operating cash flow and free cash flow to equity estimates are $14.61 and $6.37, respectively. While we do not expect cut backs to begin next year, to demonstrate the impact to numbers we note that cutting Redbox growth capital outlays to zero in FY'13 would increase free cash flow to equity per share by $4.61 to $10.98," said Greiner.

Compass Point has a Buy rating on Coinstar (NASDAQ: CSTR) with an updated price target of $60.00 (from $50.00).

For an analyst ratings summary and ratings history on Coinstar click here. For more ratings news on Coinstar click here.

Shares of Coinstar closed at $51.57 yesterday.

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