[ MTSLF ]
Just a quick comment on the issue:
It just appears to be going through the Post-IPO blues. The health of the company actually appears to be fine, but the growth numbers were not fantastic enough to spark any continued interest in the issue.
That ultra-large block on Thursday should be important though in helping assess a potential bottom in the stock. The smoothed momentum has picked itself up from its trough, but that stock truly isn't attractive at the moment because it has yet to break out of its downtrend. As there is no bottom yet (we may be very close to one), the risk/reward ratio can't currently be assessed. If we use the Book Value as a substitute, then we can say that there is an approximate bottom at $2.00.
Just remember that it is the job of the investment banks, or whoever takes the company public, to get the maximum offering price for a stock. In this market environment, companies that are going public will not be interested in selling at a price that is considered a bargain. The market is attempting to reach its equilibrium stock price right now, so that is why the stock is reacting so negatively. The efficient market hypothesis, while not too efficient, can sometimes take some time before it reaches a consensus. There may be opportunities sometime though when the market may overreact, at which it could bring the price of the stock to below its intrinsic value.
That may be the situation for other issues, but it has not yet currently reached that condition for MTSLF.
However, based on some other TA factors (sorry I don't have the time to expand), it might not be a bad idea to nibble at this area.
Regards,
Rainier
PS. I guess this didn't turn out to be a quick commentary after all |
