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Strategies & Market Trends : The Rational Analyst -- Ignore unavailable to you. Want to Upgrade?

To: The Perfect Hedge who wrote (583)	4/6/1998 12:37:00 AM
From: HeyRainier	Read Replies (1) \| Respond to of 1720

[ CKR ] Glen, I can see why you would be in a bind about the buy/sell decision on this stock. The intermediate term technical picture is no longer confirming the longer term outlook for the issue (i.e. a break in the uptrend) It's tough whenever TA muddies up the FA picture, but let me see if I can help you out with your decision: The company's fundamentals are outstanding. Over the past two years, earnings have grown 72.6% annually on a compounded basis. At today's price, we have an implied P/E of 32.2, which when compared to the future expected growth rate of 38.1% for the next two years, would suggest that the price you are paying for CKR would be a fair one, with a little bit of a tendency towards the value side (from a growth stock investor's point of view). The company has continually exceeded earnings estimates for the past 7 quarters that I can see. Valuation-wise, the stock's trading at about the middle of its P/S and P/E range for the past three years. Based on the fundamentals and the intermediate term choppiness in the stock's behavior, I will venture the opinion that the stock will survive, but will be confined to a trading range such as the one it is currently in. Insider selling doesn't seem to be too significant, and some good performing mutual funds are with you on this boat. I'm sure you'll be watching this closely, but it sure seems like it would be a good idea to hold onto your shares if you're in for the longer term. But of course, there's only one right answer, and that'll be determined on the chart in the coming days, weeks, and months. Regards, Rainier