Hi Metsin6,
"why is it so cheap looking?"
Because it's a small cap. Investors tend to prefer the large, well-known, long-lived companies. The small caps tend to be more volatile because investors won't stay with them for the long haul. They get in, get their profit, then go back to IBM, Merck, and Coca Cola. Although small caps have outperformed over the long term, the outperformance occurs in short bursts, with long periods of underperformance in between. The problem is we don't know when the short bursts are going to happen. That's why long term buy and hold works -- you're in when it happens.
If you hang in there, you'll be rewarded, as I believe that eventually a stock will trade at its "intrinsic value", as discussed in the previous several posts. I put the value in the mid $20s based on an estimated long term growth rate of 30% annual and earnings of $0.80 (July qtr estimate times 4).
Bob and Wayne, you are both right in my opinion. To an individual, a stock has an intrinsic value, but the market determines what you can buy and sell it for. An understanding of both of these is important for succesful, rewarding investing. Thanks for the good discussion.
Best of luck to us all.
SPB |
