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Technology Stocks : American Power Conversion
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To: Bernie Goldberg who wrote (2507)7/31/2002 11:18:38 AM
From: Paul M. Rengier  Read Replies (1) of 2574
 
Bernie,

what you mention is hope, but no "real" reason. Some reasons for a lower price:

The P/E now is in the 20 somethings. That is far below, what market today concedes to the average stock. So the figures and the outlook in tomorrows earnings release better have to be terrific. Do you expect a terrific outlook in the current environment? If yes: what kind of P/E do you expect? 30? that would spell a stock price of 15-16. Now comes the chart: APCC has to break the resistance around 12.5 first, which is not likely in the first run. (I know well, that APCC did exactly that a few times). What you could not know obviously is the new low of 9.80 last week: THAT is a major reason (technical point of view), why I will stay bearish for APCC. Let me calculate the target price of APCC 16.24 (year high and top of the wedge) - 12.5 (former support and bottom of the wedge) = 3.74. 12.5 - 3.74 = 8.76. This relates to a P/E of 16.55, which still is generous these days.

In a nutshell: barring a extraordinary quarter with an golden outlook the stock is bound to continue its way down to the single digits.

I have read the following upbeat article biz.yahoo.com
and would disagree with Mr. Farr. He may be right regarding the properties of his mentioned stocks, but we are still in a bear market. Its not yet time to invest.

I would like to have better news for you.

Best regards

Paul
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