It's been a while, but I just bought more THQI at 6 times my 1999 estimate (5 times after deducting cash).
I first bought THQ over 3 years ago at ~$2.50. It is a better value now, even though the company has increased sales 15-fold during the past 4 years.
The stock is as oversold as it has been in a year, and it offers the best fundamental value going forward. It is possible that the higher opening and the even distribution patterns during the day are indicative of market makers covering their shorts. Weak hands are spooked by the lack of a run-up, so they'll sell at any higher price. When the stock opens higher, they all sell, refilling the MM's inventory of stock, allowing him to cover his shorts.
As I said yesterday, I feel that THQ can earn $3.40 in 1999, and well over $4.00 in 2000. Going into 2000, THQ will be a nearly $400 million company, compared to $13 million going into 1995 (That's a 30-fold increase in 5 years! Better than DELL and most Internut companies!) And with the best operating margins in the industry, THQ is trading at only 1.15 times sales! It doesn't make sense, but it will be corrected eventually.
The longs will be rewarded.
Go THQI!
Todd |
