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Strategies & Market Trends : John Pitera's Market Laboratory
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To: The Ox who wrote (17183)8/25/2015 6:08:45 PM
From: The Ox2 Recommendations

Recommended By
bull_dozer
John Pitera

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One of the companies that has been a great short for the past 6 months has been SAM, already falling from a high of 325 down to 202 today (and 195 yesterday)

The fundamental metrics are still very high, as they have a PE over 27 for a company that will only grow EPS in the 10% range over the next year, assuming they hit their goals. Trailing sales growth was only 12% last year and not likely to exceed 15% next year. 5 year revenue growth is at 17% and I think that's what the company is still being priced at by the street.

In a declining market, I can see SAM hitting the 150 mark fairly easy and quite possibly lower. Yes, the bulk of the move has been already seen but it's one of the companies that still appears very pricey. Like CMG that I mentioned in the past, SAM has a great following and a solid product. The question is valuation going forward, IMO....

A 15 PE on trailing earnings plus cash gives us roughly a $120 price target.

BUD is also another one that's probably way over priced in a declining market but unlike SAM, they offer a 3.3% yield - over $3/share but revenue per share is only 40% of SAM's and the stock price is about half.



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