Roger, I'm back shorting DELL. It made a good move down today. The valuation is just too high, they're facing a lot of competition with many competitors copying their sales and distribution models.
With so many unraveling momentum stocks in this market, I think it's a mistake to put too much in any one. My current shorts are:
aol, acns, avnt, cnc, copy, ddim, dell, nscp, pega, pixr, yhoo, zitl
Was in-and-out of ctxs for a good gain, but I think I closed out too soon on that one. It looks like it's going down a lot further.
On another subject: PEGA - Pegasystems "PEGA develops, markets, and supports its customer service management software that automates customer inter-actions across transaction-intensive enterprises."
What originally caught my eye was the high Price-to-Sales ratio = 14.72, P/E = 200, coupled with declining price. But now it looks like there are some real questions about the validity of their revenues. Apparently they engaged in a fishy transaction where "PEGA bought code back from FDC (First Data Resources), and then FDC bought software from PEGA over time - very, very fishy." They then had a problem getting the auditor to sign off on their books.
biz.yahoo.com
When they did get the 3rd quarter report out, it showed declining revenues.
sec.yahoo.com
Any company selling for 15 times sales better be clean as a whistle. High P/S combined with poor Relative Strength added to Accounting Shenanigans = disaster. Do you (or anyone else on the thread) have an opinion on this company? |
