Tom: Now I can understand your cautious perspective--
Hope you didn't find my last message unduly acerbic--Cornerstone has been one of my better buys in 1996. I am not in the computer industry, but a friend, former director of computer services for a Chicago trading exchange, has been educating me about the industry. I started watching Cornerstone last March. My friend enthusiastically recommended the company. (He first bought in at 6 1/2, averaged up at 9 3/4). My current assessment of Cornerstone is based principally on its having earned .06 in 3-Q against First Call's estimate of .02, coupled with the fact that First Call estimates .13 for 4-Q and Cornerstone has not pre-announced any adverse news or expectations. Cornerstone popped up to 11 after 3-Q, hung in the 10's for a few days, then dropped back down. If it meets or exceeds estimates this time, it will have had two consecutive quarters of positive earnings, which should be enough of a track record to avoid too much erosion from the high this time. As to insider selling, I haven't seen any news about that for the past six months, but I don't subscribe to any services that would alert me to that.
I can see where you'd be uninterested in averaging down any further if you already have a substantial position. Even though I was very confident that 6 5/8 was a bargain driven by year-end tax selling, I didn't add because being long 10,000 shares is enough for me, particularly in light of Cornerstone's modest trading volume. I think there is a possibility, but I can't call it a strong probability, that Cornerstone will be in the 20's by year's end. |
