Jim,
While your comments about "buys" etc. are probably closer to the truth than one would hope, I do think there may be another explanation about the "strong buy" and the 36 month target price.
When a brokerage house gives projections for a stocks future price, it is based on their feelings, DD, insider info etc. of the company's growth of earnings and value. Since NXTL is yet to go cash positive (as far as we know), I would think the 15% growth you mentioned in stock price is cautious, but realistic given the market uncertainty.
I doubt any consideration of a buyout is in that $36 target. It is simply where he thinks it will be if NXTL continues with its normal business over the next 12 months.
Don't forget, the recent run up is very closely tied to the many rumors and hopes that NXTL is a takeover target.
Were the price still around $20 where it was a month and a half ago, you would be very happy to think it might increase 80% by next Dec.
That said, any guesses about the multiple NXTL might get on their NAV in a takeover? Might help to get our hands around a number. |
