I'll tell you, Mike, I know some pretty astute insurance analysts who thought "all the bad news is discounted" 25% above these levels. Be careful. If you are going to buy a stock with a chart like ORI with the intention of selling it if it reaches a new low I would simply ask why buy it to begin with? Sure, like Waste Management you can keep your loss to a point or so, but I would much rather build some conviction as to what the stock is worth, buy at a substantial discount to that, and then wait for the market to recognize the value. If I can't get conviction on the value (like Waste Management) there are plenty of other stocks to buy. If Waste Management goes to 30, fine, that's somebody else's gain - I did the work and concluded that the financials are so messed up they are of no use to me, and I am not going to buy a stock off a chart when the financials and size of the company two years ago bear no resemblance to the company I would be buying today (remember, Waste Management was not the surviving entity of the merger). I leave this one to speculators and to those few who really understand this business.
I would focus my energy on McKesson if I were looking for bombed out stocks that are actually analyzable, if that's a word.
JJC |
