Ben,
If you want to look at the stock on a daily or monthly basis, then the upcoming quarter's earnings do make a difference. Stocks are volatile, that's a given. But the price around which that volatility centers depends on the short-term future outlook. For long term investors, who only care about stock price gains on a yearly basis, then yes, it's about this year vs last. But the demand for TNFI stock at any given time is set by traders, who are looking at what earnings are going to be for the next quarter and, especially, what the portential is for good news from the company or a big earnings surprise in the next quarter. The likelihood of great news is decreased during the non-ordering season, and the likelihood for a great upside surprise is greatest in Q3, which we have passed.
I definitely agree with you that on a yearly high or, more likely, yearly average price basis, the price depends on yearly earnings. But the statements I had made earlier were in response to questions about why the stock price was where it currently is and why the variation has occurred. High growth stocks are more volatile, and this means that TNFI will not trade at essentially the same price throughout the year. The fact that TNFI doesn't trade at the same price can be seen from the charts, and I've been trying to explain why that is. If it was simply yearly EPS, then price should be constantly, linearly increasing throughout the year. But no stock that I konw of trades that way.
Gotta go, I'll write more later,
Bollmonster |
