Doug,
Being a floater of SI for a couple of years and have read thousands of postings, I feel like I am somewhat qualified to say that you might be the BEST posters I've ever seen. Your postings have been enlightening, filled with intelligence (thus the power to convert "enemy" into friends LOL) and confidence, but humble and noble at the same time. This might be the only reason that I've read through ALL of NEON postings on SI (well, ok, it's a small thread but still, this is thus far the ONLY thread I've completely read).
(Enough compliments, now even I feel some uneasiness)
This stock itself is truly amazing. It is Upside, one of my favorite magazines (I read both print and web version), seen here, upside.com that lead me to a NEON chart ("Wow" was my first reaction when I first saw the chart), and finally here. For those who do not read Upside (IMHO, very good mag), it ranked all software companies for the coming year, NEON is next to the top dog (MSFT), ahead of all the rest (ORCL, SAP, PSFT, CA, CrossWorlds, INTU, NOVL, CPWR, NETA.....)
When I read the article, the stock was at 62. Two days ago. Now, 65 and still climbing. Time for another split?
Is it too late to get in? Looks like. But the same can be said when it last split and I recall reading posters jumping on board shouting "short"! LOL. Oh boy! It has gone up more than 100% since then.
Doug, your view about the big picture is so impressive to me that I have determined to follow wherever you go (yes, I have marked your profile). That said, I'd appreciate your comments on the general market condition for NEON and EAI (somewhere I picked up the number 16bln for total EAI, is that yearly? next 5, 10 years?). What kind of market share do you see NEON have (and future?) What about growth rate of the sector? How do you see NEON revenue in 2 years? (now 65mil).
Another hurdle for me to overcome before get into NEON now is its valuation and (possible) built-in expectations. It is trading at PE of 168 (here's a research report on NEON as of Feb.17, in PDF format, will be deleted shortly: visualcities.com, forward PE more than 120 (using .50 for next year, but even if .65, still over 100). The growth rate for the next few years is listed as about 50%, although the company has accelerated growth (beating estimates by 0.07, 0.05, 0.03, 0.02 the past four quarters). So essentially, we are assuming a company that'll grow 100% the next few quarters (year to year basis), if not years. Sounds crazy, but it looks like possible, at least for FY 1999 (they need .20, and .30 for Q3 and Q4 to get 100% growth next year, and .2, .24, .40, .60 which is 1.44 for year FY2000).
But again, at this rate and expectations, it'll have VERY little room for error. DELL is a good example (yes DELL is huge while NEON is still small cap).
All in all, I am amazed by the stock and look to go long but have no positions at this moment. A NEON chart I made can be found here, visualcities.com. It has some technical indicators marked (200EMA, 50EMA, bollinger bands, trendline, MACD, RSI, SO). It seems to me that the stock held well against trendline and is in a strong linear uptrend (not a short candidate unless hyperbolic, seems to me).
Comments?
Thank you again!
Will
P.S. I know you have a cost base in single digit. But if you were in my shoes (30 year horizon), would you commit new money?
P.P.S. Your comments on that "rock fellow" was rather interesting, so much so that I even found this page that might interest you:
venrock.com |
