Our club bought it back in September, before the November BI came out, at 22.
We are always conservative in our judgment. Working with the NAIC OPS, we used sales and earnings growth of 12%, a high PE of 25, a low PE of 14, and a low price of 12. On that basis, our buy zone on 25-50-245 zoning went to 21.4, but we bought slightly above that anyhow. But now, it's fairly well into the hold zone, and we won't add to our holdings until it gets back down in the low 20s, if it does -- it's been down to 14.90 in the past 12 months, right now is near its 52 week high, though below its 2001 and 2002 highs.
I'm a bit concerned by the drop in the quarter-over-quarter pre tax profits and earnings the past two quarters. There has also been a drop, though not as dramatic, in sales. Not disaster by any means, but possibly a few cockroaches running around to worry about?
Personally, I would wait for their next earnings release, due October 22, to see whether they have corrected this weakness before making a buy decision. |
