Richard,
Discovery of "Value" is the role of the market. The price tends to move towards the point where "volume" can be done. Fundamentals have little to do with pricing of an issue, more important is expectations and delivery of them. Case in point: another local company produced record sales, and net income, the best showing in its 21 year history. Sales grew 41% vs same period a year ago and trading at $29 at the beginning of OCT. Earnings were reported at 40 cents vs exp.43. Before the report price had steadily declined to 20-22. Report a couple of days ago of record profits and Revenues a and now the price is 15.5.
With SMU, the steady decline is very disturbing. Traders in-the-know would be scooping the shares up if "value" was seen. This is NOT a short term view. Take a look at the 100 day chart. A 40% decline in such a short period is very damaging. I thought with the niche market SMU was entering they would not be affected by the bear but....they have failed to deliver and players will now wait. Positive numbers are not expected to come in until after March 98. So SMU is Off my New purchase list. Yes, I still own some I bot 2years ago at 18.125. Others that know me know I look for LONG term trends and am NOT a short term player. I call trading an EGO trip and recommend only positioning for all Investing. Positive news would be welcomed.
Do I have any stocks on my purchase list. No, as I am extremely bearish on the market. I have said it before and I will say it again. GOLD below 240, 30 year rates with a 4 handle and the yield curve to invert. With a Bank in every corner and prices paid are 5x book, the BKX sector is the next one prime to turn. The SOX is now 38% below its highs. The Nadaq completing a Major Bear Flag and headed for 1200. As MMngrs are busy buying for the 401K season the prices received threw Jan most likely will be the highs for 1998. Yes, it will be a good year if properly positioned.
For those with the "Tar Baby" (SMU), keep the faith. You bot it with the year 2002 in mind, right?
Oh, b-t-way the Symbol is MICA (MicroAge) The building is across the Highway from Simula's. |
