OT
This message is not about VTSS. It's about CATP. CATP is my latest choice for another 30% quick gain target in next 2 ~ 4 weeks. Many of you have traded with me back 2 months ago on VTSS. We had about 50% gain (from $20 to $30) in about a month. That was fun, wasn't it! Some of you then moved with me to NANO when it was at $5 ~ $6 range. I predicted that we could see NANO rising to $8 and have 30% ~ 60% gain in a month. Sure enough, one month later now NANO is at $8-5/8. If you like me, you have taken profits on both of these stocks. The question is where we should put our profit? Well, I did some extremely short term tradings in last week on LCOS, AMAT and AMZN, and made some quick profits there. (See my analysts reports and my own comments on those threads). But I have been searching for a relatively long term solution for my money. After some thorough research, I've made my choice. That is CATP.
CATP is in IT (Information Technology) business, and it's the recognized leader in the sector. They have been enjoying 40% ~ 50% growth rate in the past several years until recent qtr, when its growth rate was reduced a little bit to 31%. The reason for the decline was mainly because of the Y2K issue. CATP's clients currently are putting lots of resources on correcting Y2K related problem, rather than initiate new IT projects. So obviously as the time passes, this issue will behind us, and CATP's clients will resume the spending on new IT projects. So right now it is probably the worst situation for IT sectors, just like couple months ago when SEMI sector was at the bottom. We should see the companies to resume IT projects in the late 2nd qtr of 99, and we will see a strong up tick by then giving the fact that we are in the absolute bottom right now.
So, with CATP at $18 a share, about 1/3 of its early July value, I have seen tremendous potential profit on it. CATP's 98 EPS is at $.90. Its 99 EPS at $1.20 range. Since CATP is the leader in IT sector, traditionally it always trades at about 30 x EPS, so a reasonable value for CATP is at $35, i.e. about 28x of 99's EPS.
The above is the fundamental side of the analysis. The below is the technical side of the analysis.
With market rising so quickly from 7500 to 9150 in just 6 weeks, many people have made very healthy money along with it. We've seen several sectors turned corner one after another. With the smart money moving out of the hot sectors, they have to be put into other places. Thus, the currently coldest sectors may very well become the next hotest sectors. In my view, IT sector is definitely one of them.
Personally I have sold 75% of VTSS holdings, 80% of my NANO holdings, and bot roughly 5,000 shares of CATP in last week. My 4 weeks target of CATP is $25, a 30% gain from current $18. My feeling is that DOW may very well be able to hit 9500 by year end, that will certainly pull all the stocks higher with it, especially those sitting in temporarily the coldest sectors.
If you are convinced by my past track record as well as the above analysis, join me in CATP thread to read and discuss all the analysts' reports and my comments there. If you have money left, I strongly encourage you to buy some CATP. Like I saw VTSS at low $20, CATP at $18 may prove to be the lowest therefore the best price we might see in the next 2 ~ 3 years. My feeling is that CATP should go back above $30 by 1st qtr of 99, and may move above $50 again in 2000.
Good luck!
MB |
