Joshua,
<<I really believe that we were presented with a once in a lifetime chance to buy companies like csco, asnd, and usrx/coms at discounts we won't ever see again...>>
Though I remain long LXK, I can't argue with the statement above. I have loaded up with USRX and bought into CSCO a couple weeks ago. If CSCO drops several points in the morning, I will average up and double my current long term holding. I have waited a long time to establish a long term CSCO position. Christmas came early this year <g>.
As for LXK, I too believe that the announced stock buyback program (3x the size of the original program) is very positive. $150 + $50 is a significant investment in your own business. Unfortunately, I think LXK will continue to be a boring stock to hold. Not too many sudden moves up or down. Hopefully, LXK can reach fair value and then gradually appreciate at a maintainable pace. Currently, I believe it remains undervalued at $25. 1997 estimates are around $2.00 EPS. Applying an average P/E of around 16-17 yields a price of $33. Therefore, I think it could appreciate about 30% before becoming fully valued.
BTW, below is STOCK SMART's current assesment of the relative value of LXK.
stocksmart.com
As you can see, they are using roughly the same logic as I outlined above in stating that LXK "Trades at a 30% Discount PE Multiple of 12.3 X, vs. the 17.5 X average multiple at which the Office Equipment SubIndustry is Priced".
Good luck,
FF |
