Joe:
"What is a fair valuation????"
Assume that the growth rate does not continue at 60%. In all likelihood, quarter to quarter, I anticipate a decline.
The impact is twofold:
Lower EPS
Lower multiple
Assuming a generous 25% decline in profits next year to 30 cents a share, and a generous 15 multiple. Fair valuation is $4.5 a share.
A short squeeze is remote, in fact, one brokerage firm offered me 100,000 shares to short. It appears that what has sustained the stock in the 20's was short covering. When this is over, watch out.
CMM people have seen this investment decline by over 20% two years in a row. Investors are not patient, and though Cabot may tout the stock, If you invested in Prst vs the S and P, you down 50% (20% decline in PRst+30%rise in S and P)
Press releases, may cause minor bumps in the stock, but mgmt has no credibility, given the SEC settlement.
It would not shock me to see this stock trading under a dollar on the "pinks" before the end of next year. The Fuji deal is Prst's only visable hope, and thats not for any price gain from hear, but for a slowing of its stock price decline through the teens. |
