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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: MCsweet who wrote (18918)	3/19/2004 4:39:04 PM
From: Madharry	Read Replies (1) \| Respond to of 78491

I think its safe to distinguish between stock in uptrends that suddenly drop 25% over a few days and stocks in downtrends that drop 25% over a few days. to me looking at a couple of stocks Faro and kvhi both of which have dropped rather sharply. if you owned them do you buy sell or hold? I dont understand the weakness in faro, i did not understand the weakness in kvhi until delphi announced they had developed a competing product. NRGN a company that i have a full position ran up briefly when they annouced a sizable partnership with Merck- the stock got as high as 11 and then dropped into the 8s, 7s, and briefly the 6s. I added to my position because i felt the stock was below fair value. today they announced a private placement of $100MM at $7 a share. I believe the information that they were looking to sell more shares contributed to the weakness in the shares but there was no public release prior to today. Now that the deal has been announced I fully expect the stock to rally over time, and if I did not have a full position i would have added after the announcement at these levels. the equity infusion to me makes the company much more solid than before- cash will increase from 60 to 160MM and equity will increase from 122 to $222MM or so, plus of course there is the comfort that the equity firm has presumably done its due dilligence and is satisfied with the pipeline and management.