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Here is a question and answer you may be interested in (My question and MF Master's response):
In a message dated 97-02-05 21:08:34 EST, you write:
<< I was wondering if you have any insight as to why the stock would have
gone down after today's earnings. Was there anything there that caught
your attention as a "disappointment?" Everything seemed fine to me. >>
Hi, Josh....
Well, of course no one ever knows for sure why the market does what it does
in the short term. I, personally, was very impressed with earnings.
Everything came in fine, and as I expected. I've talked with several others
and they agree with me. I saw no negatives reported. Of course, the general
market was not very impressive today, so that could account for part of it.
I think what we saw here today was what I've seen with a number of stocks
lately. That is, a selloff on the good news. Remember that ECGOF rose from
7 to 9+ in pretty short order. Some of this was due to some good news coming
out (ChemPower acquisition) and some of this was due to short-termers looking
for a pre-earnings "pop". Those who might have been looking for a huge
"surprise" to make the stock go to 10-11 were somewhat disappointed by just
"meeting estimates", and thus the stock sold-off.
Look at the following figures and at the CALENDAR not the clock:
Revenues ($M), Income ($M), Shares (M), EPS ($)
FY 1994 34.991, 1.008, 6.191, 0.16
1Q 1995 11.027, 0.483, 7.191, 0.07
2Q 1995 9.079, 0.652, 6.833, 0.10
3Q 1995 7.255, 0.744, 6.951, 0.10
4Q 1995 19.323, 0.973, 7.217, 0.13
FY 1995 46.684, 2.852, 7.217, 0.40
1Q 1996 40.014, 1.806, 9.024, 0.20
2Q 1996 25.069, 2.067, 9.560, 0.21
3Q 1996 25.390, 2.399, 10.356, 0.20
4Q 1996 29.055, 2.491, 10.847, 0.20
FY 1996 119.529, 8.763, 10.847, 0.81
Very, very impressive to me....and it will only get better. Several new
contracts are coming, I'm sure.
I know this sounds stupid, but I wouldn't mind it dropping back to 7 so I
could pick up some more for the long-term. I feel very, very confident that
if Eco can continue this pace (or even something close to it), we'll be
seeing $20 somewhere down the road. If that happens in 1 year, that's a 135%
rise from here. Even if it were to take 2 years, that's still 68% annualized
return. Looking at it this way, it makes you take today's action in a little
different light. Hey, I'll take 68% annualized return on ANY stock.
Remember, projections are for $1.20/share for next year, a 50% rise from
here. And I think they'll do it.
Best of luck,
Joe :) |
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