Good morning Mr Murphy,
I'm sorry to answer a question with another question, but - what has changed in the last year? Their revenues, profits, and customer base have all grown. Demand for their services appears to be increasing. I can't see that there has been any change for the worse.
And if "the stock looked great a year ago", and there hasn't been any change for the worse, then time and "man's continuing search for investment opportunities" should move this stock up to a more realistic value over time.
With regard to a buy-out, I have spoken with the President of TransNet on several occasions about this general topic, and it is apparent to me that the company is not for sale at these current price levels, but might be at a higher valuation. In general, my views on the next several months are positive, given their previously-announced hardware sales increases in the quarter now ending, and the anticipated increase in service contracts.
Today's price decline is a bit more of a mystery to me. I have never felt that "support and resistance" were necessarily meaningful concepts in technical analysis. However, it is notable that TRNT hovered between $3.00 and $3.50 from the beginning of March to the end of May 1996 - this would constitute a significant resistance level. The theory behind "support and resistance" is that there are a significant number of investors who bought TRNT during this period, and were just waiting to "get even" before selling. Since I was a buyer at these levels, I can assure you that such thinking is
not characteristic of all investors.
Instead, I suspect that it may have had something to do with FOMC meeting and the concerns about rates. I noticed that the selling started relatively early and seemed to dry up as the day went on.
Nothing fundamental has changed with the Company or with the economy, so I suspect that this is a short-lived phenomenon, and a possible buying opportunity.
I will send you a copy of my recent Analysis Update and will add you to my e-mail list so you will receive any other information and analysis. |
