We have recently had discussions of five stocks which have become very cheap for “good reasons” which may, or may not be actual good reasons. I’m not saying these are good stocks to buy, or bad stocks to buy. I don’t know! I’m putting them forward for discussion, not so much of the individual stocks, but of the category: Companies with a good story but with a major problem which may or may not be of their own making, and which may or may not be temporary. I could see someone saying a small position in each of this kind of stock is warranted as a speculation, but I could also see someone saying there are surer places for his or her money, even if the PE is higher. What do you think?
Here are the five sample stocks:
ANET - Because of CSCO lawsuit and possible competition
UBNT - because of flatlining for five or six quarters with a fall off of their main business coupled with a growth of their enterprise business.
GILD - I don’t follow this company but I think it’s because of thoughts that insurance will refuse to pay the ridiculous prices they charge for their hepatitis drug, the number of cases is very finite, and competition in their HIV market.
PFIE - Collapse of the oil market, etc
SZYM - Total change in the thesis, or at least a several years postponement of the original thesis.