Some CMED comments from the yakkers over at Yahoo...
Condor 47
by: CoolBop7 1594 of 1601
My 2cents on when to enter is this: Look at a 5 year or longer chart of CMED. Smoothed out it is roughly a straight line going up at a 35 to 45 degree angle. Few 5 year charts look like this (the charts of CSCO, MSFT, DELL all look similar). What this chart told me about 1-1/2 years ago (when it had a similar appearance) is that if I invest in this company today, about a year from now I will have a 100% return on my money. With the recent action my return is well north of that. By extension, should I buy and hold for 2 years, 200% return; 5 years 500% etc. The underlying significance of CMED's chart is that the company has a strategy that is working. The company's products, services, and competencies are enjoying ever increasing acceptance and profitability in the marketplace. That said, I would not agonize over when to get in, I would just get in. The chart shows that CMED's basing periods are getting shorter in duration as the share price goes up. That tells me that it will probably spend much less time going from 20 to 30 than it did going from 10 to 20 (assuming no bear market pops up, which it seems is nowhere in sight). That makes sense as more eyes than ever are watching this stock and a lot of bigger players are now looking since it is over 20. CMED and the market has steered through some rough waters of late. Market conditions and CMED's internal prospects are such that waiting for a pullback to 18-19 is riskier than just getting in now. There are stocks one trades, and there are stocks one holds. This is a buy and hold period. Trading in and out you run the risk of missing out on substantial up legs, and paying capital gains on each in and out diminishs your returns even more. Let the company's quarterly reports determine when you bail (should there be a decline in the company's prospects) or a real prospect of a bear market. Otherwise, see you at 500%+ returns a few years from now.
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CMED growth rates
by: BLynch_1 (M/Austin, TX) 1597 of 1601
But impressive.
Revenue:
Sep avg = 49%
Dec avg = 52%
Mar avg = 54%
Jun avg = 67%*
Overall average growth = 55%
Earnings:
Sep avg = 43%
Dec Avg = 43%
Mar avg = 59%
Jun avg = 34%*
Overall average growth = 35%
* based on 2 pieces of data. Other quarters based on 3 pieces of data.
Great performance. Stock price is rising, probably in recognition. The best indicator of future growth in the stock price is the Return on Equity measure, normalized for risk against US Treasury bond yields. Right now, ROE is 30%, and the company looks undervalued, so I would guess that this stock should go up about another 40% ($9.00 -- 9.20 /share) over the next 12 months.
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Not Overpriced
by: acbyrnes 1600 of 1601
I do not think a P/E ratio of 40 for CMED is too high. Even at 23 1/2, CMED's P/E to anticipated EPS growth ratio (PEG) is very close to 1.0. Although some say that a PEG of over 1.0 is overvalued, it may be helpful to keep a few things in mind:
1. For a growth stock, particularly one that has had such a great last few weeks, a PEG of 1.0 is comparatively low. Many very successful tech stocks have far higher PEGs and have continued to go up to PEGs in the 2.0 and higher range. (in fact, the folks at Motley Fool have been major proponents of the 1.0 PEG valuation cut-off for some time, but you'll find that their Foolish 8 recommendations include almost exclusively stocks with PEGs far higher than 1.0) CMED has been running a shockingly low PEG ratio for some time now, close to 0.5 at points in the past 6-9 months, and is now coming back toward a more reasonable valuation.
2. CMED's P/E ratio will likely decrease once its June quarter earnings are released, given that June 99 will have been a better quarter than June 98. Likewise, if its earnings continue to increase versus the comparable quarter the previous year, the P/E will be ratcheted down every 3 months.
3. "Significant institional buying" is a CMED long's dream come true. With CMED's small float, big money demand should have a very positive effect on price. Institutional buying will also make other non-institutional investors take greater notice, which also facilitates a higher price. Also, I doubt that large institutions are interested in sinking more money into a stock that they believe won't go up at least modestly over the next 6-12 months.
The upshot of this is that you may well regret -- maybe not today, maybe not tomorrow, but soon and for the rest of your life :) -- selling at $24. |
