To those on this thread who have provided helpful information in response to my prior questions, thanks.
After doing my own DD, I started buying CADE today at under 3 1/2.
Here's why:
CADE currently carries an IBD RS rating of 91, with an EPS rating of 97. Thus, it has shown strong historic earnings growth and price appreciation. Yet it is still way undervalued.
Since the quarter ending June 1996 (two years ago), its revenues have grown from 7.62 million to 21.9 million for the quarter ending in March of this year. The growth has been consistent and steady, and by all accounts should continue. Yet despite its high growth rate, CADE's PE is only 29. (Although 29 may appear high, it actually is low for such a high growth company).
In addition, CADE's price to sales ratio is a very attractive 1.15. CADE also has a price to book ratio of 3.11, and is trading at a per share book value of only $1.11.
Better research has been done by others, such as the Three Amigos on their SI thread. Needless to say, however, CADE is a steal and at these levels is waiting to be discovered. When it is discovered by the broader market, it will take off.
In addition, although the recent price trend has been down, CADE seems to have support on the low end at around 3 3/8 or there abouts. Given that CADE's next quarterly report is not far off, and that CADE apparently is beginning to do what is needed to attract institutional coverage and investors, I expect that CADE will start rising in anticipation of that next report. Regardless, I see no real down side risk with buying anywhere at or below 3 1/2, but I see tremendous up side potential (both short term and long term). In addition, the volume has been picking up lately, and CADE has a current acc/dist rating of B. Thus, we are in a good position to start an expected rise toward the next quarterly report.
Hope this helps for those of you still considering CADE.
-- Jim Wright |
