James,
<<<Was Cascade over bought before the stock went down or is the decrease entirely due to the overall state of the network stocks ?? In other words when the stock goes back up will it hit the same highs i.e $90's ??>>>
Cascade was in the stratosphere in the 90's.It just goes to show how powerful momentum investing can be.They don't care how rich the multiples are, or how strong the fundamentals are,if it's hot they will buy it.If you spot the trend early enough, you can make some serious money!!However, as the stock price increases and the crescendo of hype about it's future swells,people make the mistake of falling in love with the stock.(I've been guilty of this.)
Then the Co. stumbles,either an earnings problem,or a competitor comes out with a better mouse trap,it doesnt matter what the catylist is.The momentum investers leave in droves.If you fell in love with the stock ,your left holding the bag.(A very light one at that!!)Your left wih a margin call,a broken stock, and a broken heart!!
Cascade, and alot of other networkers fit in this scenario.However ,fundamentaly, these stocks are still very strong.Sure there's FUD right now,but Cascade,and most of the other networkers stock prices more than reflect that.Will Cascade hit the 90's again?Sure it could,but ther are a lot of variables that one has to take into account.It has to hit it's numbers, the market can't crash and somebody can't come out with a better product.Also management has to do a better job communicating with the Street.My guess is if Cascade hits on all cylinders you could see the 90's again in 18 to 24 months.That's a 3 bagger from here!! Not bad,but it will be a bumpy road.Sorry for the long winded response,too much coffee this morning. |
