Whipsaw,
Nope, I don't think they'll earn $1.50, but then again I don't know what they'll earn. With the $1.70 figure, I heard one analyst on CNBC say "take off .35 cents for current quarter, and a nickel to a dime for the next. That leaves earnings of about $1.25 - $1.30." That's what my rough pe "just above 10" was based on.
Sure, earnings could come down more. But if this really is primarily an inventory problem, as CPQ mgt says, why would you assume that means they'll earn nothing for the rest of the year? (per your "taking the current quarters earnings and annualizing it".)
All I'm saying here is let's not be too quick to swing the pendulum too far to the negative side either. CPQ has consistently shown growth in revenues, net income, market share, and has great management. Anything below $25 is cheap for CPQ, and anything below $20 is a steal.
BTW, no I do not currently have a CPQ position, but am seriously considering it. I am glad that I didn't bite at $32, although I almost did.
-John Dodson |
