I think that last week was a well warranted rest with a bit of profit taking for some of our stocks after eight weeks of up. There are a few I’ve had a bit of concern about though.
First of all, there’s CALL. There’s certainly no bad news. They came out with their new product and advertising campaign exactly on time, just when they said they would. The product looks good and the offer seems good. The PE ratio is way under 10. So why hasn’t the stock bounced? That worries me. I know the earnings and revenues have been decreasing somewhat for a couple of quarters, and that this quarter will be down too, of course, given that they didn’t start their new program until the end of the quarter, but we knew that when we started. I feel ambivalent, wondering if insiders know something that I don’t know, or whether the problem is that they have a great product in a vanishing universe. However I don’t want to sell out of a stock with a great new product and orientation, and a PE which is currently about 5(!!!), without waiting to see what happens.
Then there is AFOP. I’m not actually worried about them. I just wish the price would quit yo-yoing the way it does. They provide fiber-optic cable. I first bought some at about $17 a year ago. In two months the price went up to $23, and five months after that I was buying a bunch more at $11.75 or so!!! Then two months ago they were at $22.50 again, and now they are at $17. Wow! From those price swings you’d think their results had been very variable and lumpy. But no, there’s been nothing but good news. Every quarter is up year-over-year, and ACCELERATING. Here are their running 12-month trailing earnings, starting two years ago with June 2012. By the way, they split 2-for-1 six months ago and I took that into account, which is why you have some half cents in the earnings totals (odd numbers divided by two). Look how trailing earnings have been jumping recently compared to two years ago. Results are in cents.
06 2012 30.0
09 2012 32.5
12 2012 37.5
03 2013 43.0
06 2013 61.5
09 2013 83.5
12 2013 102.0
03 2014 120.0
I suspect people are afraid their business may be cyclical and may taper off in a year or two, but the CEO says no way.
Finally, there is SZYM. They were recently attacked by a misinformation campaign, attacking them from a “genetically modified” point of view. There’s an excellent MF article about this by Maxx Chatsko. http://www.fool.com/investing/general/2014/06/14/why-are-ant…
Definitely worth a read. At $10.25, I’d definitely still be looking for a position if I didn’t have one, as this company could become a real powerhouse.