Hello Scott,
I've been watching the developments here on the Equinox thread quietly, and am glad to see that interest has picked up considerably since the breakout at $18 which was accompanied by the IBM news.
Based on current analyst estimates, I would place the fair value of EQNX to be at $24 5/8. While I agree the stock remains attractively priced, I believe that the calls for EQNX at $39 (I thought I read earlier here on the thread somewhere) are unreasonable.
What concerns me in addition to such views is that the platform for unrealistic expectations may be in the process of being built, which has the undesirable consequence of disappointment (and a much devalued stock price) should the company fail to perform to such elevated expectations. Also, it is the attention generated by IBD's momentum players that has me concerned, because I have seen what it is like when such traders stampede upon a hint of disappointment.
Aside from these views, I still look at EQNX as an attractively priced issue, but note that historical valuation levels for the stock are being neared. The stock has a history (since 1993) of being valuated at a cap of approximately 2.4 to 2.5 times sales and 24 times earnings. The entry of momentum players may skew this historical level somewhat, I expect.
I still have to get back to you on the Trendline questions, and I intend to do that on the Rational Analyst thread. I'll see you there.
Regards,
Rainier |
