Well, LU is down a lot, and institutions hold only 34% of the float, so I think it qualifies.
They've had plenty of bad news, but this is a big company with such strong financial resources that they are in no danger of going bust.
OTOH, maybe LU is still overvalued compared for example to its peer in the telecom equipment group: MOT.
MOT and LU are exactly the same size, in terms of both sales and market cap. Which means that they also have exactly the same PSR. MOT seems to be the superior company, however, in terms of competitiveness of the products and management quality. Analysts ratings for MOT have held steady, while LU's have eroded very badly. MOT is expected to earn a lot more than LU next year, too.
So I just don't see any reason that LU should be trading at the same PSR as MOT.
As a possible January effect play, MOT's float is held 62% by institutions, and the stock has fallen 52% from Jan. 1. That isn't as extreme as the 82% decline for LU.
I'd say MOT is likely to be a lot less volatile than LU, so maybe LU would be the choice for the January effect.
OTOH, I'd say LU was badly overvalued, and this still isn't fully remedied, so for a long-term hold I'd rather have MOT. |
