CTEC definitely marches to its own drummer. Dow up 150 points, Dow down 150 points, and CTEC just putts along in its own trading range, oblivious to it all.
The only way I've been able to make money in this stock in the past year and a half is to play the range. I sell 25% of my stock when it gets to 6 and buy it back in the low 5's. Last month, for example, I sold 25% at 5 15/16--I missed 6--and bought it back yesterday at 5 1/4.
Why hasn't this stock done better recently? Its earnings are the most predictable of any stock I own, and all the recent news has been positive.
According to Zach's, this year's earnings are estimated at $0.14, which would give CTEC a P/E of 37.5 going forward. But the big news is in the following year, when earnings are estimated at $0.90. That would give CTEC a P/E of 5.8 at current prices. Given CTEC's predictable earnings and positive news, the estimate of $0.90 seems reasonable and logical.
If the P/E in two years is around 30, which is conservative for a company growing as fast as CTEC, and if the earnings are $0.90, then the stock price would be at 27--five times its current price.
From a technical standpoint, the price swings in the stock are getting narrower and narrower. The upper end of the range is coming down, and the bottom end of the range is coming up. This usually indicates that a stock's price is due to break out, and my guess is that it will be on the upside.
Good luck to all. We are a small but loyal band on this thread.
John |
