He who hesitates...
Tony:
Although it might seem today that you have hindsight on your side, what with a drop back to 6 5/8 on relatively heavier volume, I wouldn't extrapolate too far from year-end sales. Cornerstone has been in a funk for the last several weeks, so obviously some short-sighted investors, some of whom bought in after 3-Q announcement, have decided to take the tax loss. If I didn't already have a substantial position in CRNR, I'd be buying more now (I bought some at 5 1/2 last summer).
To "predict" where this stock is going, it would be foolish to focus solely on one day's or one week's price. Despite the absence of any "news" announcements, there are other indicia. First, the fact is, First Call estimates Cornerstone will earn .13/share, more than twice 3-Q's .06/share (which itself was a positive earnings surprise). First Call upped its recommendation on Cornerstone from 2.7 to 1.7 within the last 30 days. (That .13 EPS forecast, if true, is equivalent to 1/2 of Zitel's EPS for all of 1996--Zitel closed above 60 today). Also, sometimes it's not what the company says, but what it doesn't say. In the past, Cornerstone has been very conscientious about pre-announcing negative expectations, so I am confident we are looking at positive earnings for 4-Q. Moreover, there have been no reported insider sales since 3-Q earnings.
I think Cornerstone hit bottom today. You can bet you will see buying and a move up before 4-Q. The question is how much of that increase should a prospective investor forego until he gets the intestinal fortitude to buy in. |
