I am not long, short, or otherwise on USRX. However, I think Meghan has a valid argument.
I don't really believe (or know, for that matter) if USRX is indeed undervalude, overvalued, or fairly valued.
One thing is very clear, however: Forecasted earnings can be quite meaningless, and quite incorrect. Further, there is way way more to valuing a company, than simply P/E ratios.
To take an extreme example, look at SHVA...The stock peaked close to $90 in early summer, and went all the way to ~$35 before there was any sign of weakness. But when that sign came--that SHVA totally messed up the quarter, the stock went down further. Wall Street was right on that one. Keep in mind, that this is an extreme example.
Another extreme example is Micron Tech---you guys know the story--it went to 94 3/4, and fell to around $70 before anyone had a clue to how was going on in their industry. It bottomed at $18. Wall Street was right on that one. Again, keep in mind that this is an extreme example.
For yet another [positive] extreme example, we have Intel---which everyone thought was dead when it hit $49 3/4 in January 1996. Wall Street was wrong on that one. Again, keep in mind that this is an extreme example.
So with USRX, there are similar FEARS on Wall Street--that USRX will not be able to meet expectations of future growth. And I'm not talking 40%+ for a growth rate, but even a 20% growth rate.
I don't know what is going to happen, but 6 months from now, we'll be looking back, talking about how obvious it was that USRX was either over, or under-valued when it was $60 in February. |
