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

To: Lazarus who wrote (60863)	6/11/2018 10:55:16 AM
From: E_K_S	1 Recommendation Recommended By Lazarus Read Replies (1) \| Respond to of 78673

On true value propositions (restructure), it usually takes several quarters for backlog to build up and for the company to get back operating on all cylinders. If there were significant management changes and/or operational moves, it take time for that to work into the business operations. I had a similar result w/ CMTL which I started to build my position in 10/2016. Over a three month period I made 5 different Buys at/near $11.50/share. There were several reasons for the drop in the stock price w/ events causing a significant fall in EPS. All things were fixable but took time. There was an acquisition which sucked up FCF until it could be integrated into operations and current Gov business was down. Long story short, I peeled off a few shares after a good quarterly report in the $17-$19 share area but still well below my $35.00/share price target. After three quarters of improving results, buyers continued to move the stock higher (after one earnings report stock was +30%). I always keep shares as long as the story improves. Did some sales on 6/2018 for CMTL @ $33.10/share and still have a few shares to sell at $37.50/share or higher. The lesson I have learned from these value turn around plays is to hold onto your shares as long as management is making the changes to create value. Some investors will also have some trading shares that they will sell into earnings. My success has been to just find 5-10 of these value propositions (each year) and build a 1.5% portfolio position in each. Maybe 50% come back in spades and can be sold after 24 months. Some just never come back and a few go on to be multi baggers. The hard part is finding the stocks and buying them at/near their low. Many times I buy too early so if/when the recovery starts, I will sell off those high priced shares for a small gain but keep the other shares for the longer term. EKS