Perpaps the problem is inflated expectation levels. today's close leave EQNX significantly above a trendline violation (18 1/8 approx by my reconing). The 20 day MA is above the 50, which is above the 200.
The pullback is still in the middle of the Bollinger bands, and inbetween the 20 & 50 day MA. Remember the recent runnup started at 17, and hugged or penetrated the upper bollonger bands for several days. remembering th 50% retrenchment principle, EQNX is right about where I'd have expected it to pull back to. If EQNX stabilizes here, we're OK.
Fundimentally, Rainier was right on when he posted about EQNX pushing it's historic FA indicator ranges (PE, PB, PS, P/cash flow) when it was in the 22-23 range.
But remember, in less than 2 weeks EQNX will be reporting another qtr. Estimate is .29, which will replace .19. eqnx has beat estimates substantially last 3 qtrs. Even .32 on sales close the last qtr will result in a return to more historic valuation levels, thus building in more upside room. Unless EQNX has an EPS disappointment (not likely at this point since they historically warn - at least year ends) It will be back in the 22-24 range after the announcement. Same principles will repeat next qtr, with another qtr in the .30 area replacing a .23.
DD, what's your timetable? EQNX has rewarded fairly well over the last year those who wait around a while. The fundimentals limit the downside. Their moves to position their products where the industry is heading will bode well for revenue. EQNX cost controls have been very effective in even modest sales increases showing up very well in EPS.
I've followed the company - FA, TA and product trends for a year now. I honestly expect to see EQNx in the 23-26 range after 2nd qtr, depending on overall market and any additional releases.
If you can do better than 15-30% in 3 1/2 months, go for it. IMSCO, Scott
(remember I was posting about hightened expectations during the peak so this is not a case of spin doctoring) |
