Jeffrey Bash. re: CA and pe. Forward pe may be about 10 after today's price decimation. But even so, I agree with your question "what's to like ... for a value investor?". Not much. I would like to give these institutions credit for purchasing CA at much lower prices when it was or could be considered a value stock and so, even with today's drop, they would have done great with this stock. But I can't give these guys any credit because I'm guessing they didn't buy when it was way cheap. Maybe it's never been a value stock. I don't know when Capital Research got its 28M shares, but if they bought any time after Jan 1996, they would seem (from my Yahoo chart) to AT BEST be at breakeven now. That's not so hot for tieing up close to $800+M for 4 years during a great bull market.
If I put on my value hat, it's very hard for me to see how these guys could get themselves into such a lousy situation. How they could buy and have bought 28M shares of CA. (Happens all the time though, e.g. Janus buying tons of HLTH at 61, now 14+.) I just wonder what they might be considering to extricate themselves, if anything.
finance.yahoo.com
OTOH, the last time CA crashed, it got to this (29) level and recovered fairly quickly. Maybe it will do the same again.
Unless someone offers a compelling reason why this might happen or a good value analysis of the stock, I say CA's an avoid. That's imo; I defer to anyone who has any knowledge of the situation.
Paul,
who has been wrong many, many times |
