Perhaps some of you are still in LOGM. I got out a number of months ago when the cat swallowed the cow. LOGM, which had been a fairly rapidly growing growth stock, bought the GO TO business of Citrix. What LOGM bought in a reverse merger was much larger than itself. What it bought was a profitable business, and LOGM bought it at a good price, and LOGM’s price went up (which is when I sold it). The problem is that it’s not a growth business. It’s slow growing if at all, so it gives a big immediate jolt to EPS, but LOGM will probably never grow again at anything like the percentages it grew before.
Well since I sold it, LOGM has apparently gone up a bit more, and now even Bert, who liked the immediate merger as a short term speculation of sorts, has decided that enough is enough. Here is a one paragraph ecxerpt:
The shares have soared beyond my fondest expectation and no longer represent the value I have seen over the past year. I believe that the spin-merger transaction in which LOGM is acquiring the “GoTo” businesses of Citrix will prove to be a great transaction in terms of financial accretion. I feel confident, as well, that the cost synergies that have been forecast will be exceeded. But at the end of the day, much of the new company is going to be made of assets that have limited growth opportunities. LOGM shares, in the wake of its recent appreciation, are priced as though it will be able to achieve consistent growth at levels comparable to past rates. That is simply not going to happen. I think investors might do well to take profits here and revisit the name should the current valuation prove to be ephemeral.
Here’s a link to the whole article. http://seekingalpha.com/article/4040151-logmein-strong-appre…