Jduffy:
Firstly, I'm glad to see that someone else is even interested in RAVE.
Since I bought at $4, I also bought an equal amount again at 2 5/8. I don't plan on adding to my position.
As I mentioned in the original post on this thread, what got me interested in RAVE was that it was a $24 stock and then trading at $4. I always look for stocks that have gone thru similar slides, and then try to pick the ones that are truly undervalued (as opposed to ones whose price is likely to head even further south because of bad fundamentals).
My experience has been that stocks that fall this significantly (and into the $4 range) generally do not make it back to (or anywhere near) their 52-week high. So, I'm not expecting RAVE to climb back to anywhere near $24 in the near future. However, I do expect that RAVE is strong enough so that with a little bit of good news, it could bounce back above $4 sometime within the next couple of quarters. And I would be happy with that.
My understanding (from a Motley Fool article) is that RAVE was touted in Investors Business Daily, and then when they reported less than expected earnings, the stock price got hammered.
RAVE released their third quarter results (ending Nov. 25th) on Jan. 17th last year, so it'll be another month before we get any further insight into the financials. I will be looking mainly for one thing: same store sale increase over '96. Since RAVE is in an expansion phase (via acquisition), revenue increase is not very significant. Same store sale increase - IMO - tell the real story.
I agree with you about proceeding cautiously. There's very little information that can be gathered on this company, and that's always an uncomfortable feeling. |
