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Strategies & Market Trends : MOVING NOW!
CTIC 9.0900.0%Jun 26 5:00 PM EST
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To: nokomis who started this subject12/6/2000 10:36:25 AM
From: Dr. Stoxx  Read Replies (1) of 8046
 
NUHC play from the BTTT thread (disclaimer: I'm a long-term holder of NUHC)

The NUHC P/E Trade
by: peak_007 12/4/00 6:24 pm
Msg: 3451 of 3456

There have been 3 cases in history where the NUHC P/E has traded to single digits since the 1990:

1997:2
The P/E traded to 8. The P/E fell as the stock sold off on an earnings decline. At the time NUHC trailing, annulized EPS fell from $0.64 to $0.54. The stock traded at $4.75. Within 3 months the shares rallied to $5.75 for 21% returns.

1999:2
The P/E traded to below 10. Earnings were relatively stable at $0.35 but the stock simply traded down to $3.5. Within 4 months the stock traded to $6 for 71% returns.

1999:4
The P/E traded to 9. Earnings were still sluggish and the stock was trading at $5 per share. Within 6 months NUHC traded to $15 for a return of 200%.

Dec 2000
The P/E has colapsed to 6. Contrary to the earlier 3 examples trailing EPS are clearly rising and will be for at least 2 more quarters. EPS will almost certainly climb to above $2.00. Even if they don't they should at least stay flat at $1.40 EPS. Within 6 months we can expect a stock price somewhere between $16 and $26. Or 12 times trailing earnings. This is conservative as we could easily trade to 18 times earnings as NUHC has done many times in the past. Returns would be
between 100% and 225% in just 6 months.

NUHC is clearly a strong buy here. Consider snapping up some of the cheap call options for the April or July strikes. Very high potential to earn 10 times your money.
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