<<Nice imagery. But the bottom-line issue is this -- how sure are you that this company will keep increasing its earnings, and that too, by 35%, for 3 to 5 years? I don't think any analyst has any clue to these things. They are just throwing around some numbers.>>
I agree. It's obvious that the analysts can't even predict earnings 3-5 weeks in advance much less 3-5 years. However, my point is that the 35% number is the consensus perception of ASND's long term prospects. This number is a fact, whether or not ASND or any other co. will achieve the est. is not the point. We have to invest today based on some perception of the future. I remember seeing this number in the 50's earlier this year along with 82% institutional ownership of the stock. Now that all the est. have been slashed and everybody has gone from being long the stock to shorting it, I begin to wonder when the pendulum will begin to swing the other way.
We know that it's time to get out of a stock when all the analysts have upgraded to strong buy, and everybody has accumulated a boat load of the stock. When things are as good as it gets, the stock has nowhere to go but down at the first sign of trouble. On the flip side, I submit that it's time to get back in when all the analysts have downgraded the stock to a hold or sell, and everybody has either sold or shorted the stock. When things are as bad as it gets, the stock has nowhere to go but up at the first sign of good news. IMHO this is where we are at with ASND.
The long term perception by the analyst community of 35% growth is still very positve. At some point the consensus will form at all those institutions that once held this stock that "hey ASND looks like it's getting back on track, and boy the stock sure is cheap, look at all the short interest. You start buying shares and I'll get Spanky on the phone and get him to upgrade this bad boy next week."
When the upgrades start, est start increasing, and perception will do a 180 overnight. Will they have a clue about 3-5 year est. then? No. Will the stock go up anyway? You betcha! This is why many investors say reality doesn't matter, all that matters is the consensus PERCEPTION of reality.
Regards,
Lee |
