This isn't a "falling knife" condition, it is a normal and healthy correction all stocks go through. If you look at the PE alone you lose perspective on the bigger picture, look at the rate at which PAYX has been able to consistently grow earnings. When doing so, it becomes clearer that the current price level is a "good deal" relatively speaking.
Looks like we're all in agreement in the $25-$35 price range (although I give it a $26-36 range), and that is why I already pulled the trigger at $26 5/8. It doesn't take long to turn this one around, and I've seen enough to feel comfortable buying at this price level. If it falls $1-3, it won't remain there long at all, and anyone who is able to buy at that price should consider themselves extremely fortunate as well as lucky.
PAYX is a fully indexed issue, and EVERY fund manager worth his salt has some in his portfolio. THe recent price action is a consequence of rotation of these fund managers out of large caps and into high growth, low PE small cap issues. There was NO sellers last Friday, look at the volume. And look at the price action, minus the clown dip in the last 10-15 minutes of trading, PAYX was flat for the day.
Buyers at this price level will most likely be very happy after earnings are released, buyers then will do very well, just not as well. Enjoy the ride!!!
Regards, JB |
