Yes Steve Jobs is the most influential component of Apple. Yes, he turned Apple into one of the most valuable corporations in the world. Yes he is an irreplaceable tech guru who will forever be enshrined in history as the brains behind one of the most astounding turnarounds in corporate history.
And yes, he is no longer Apple's CEO as of today. [more]
"What people recognize is that there’s a fear that the United States is in an unstoppable decline. They see the rise of China, the rise of India, the rise of the Soviet Union and our loss militarily going forward."
"Folks, whatever you think of Standard & Poor’s, when a Wall Street firm run by rich people recommend higher taxes on rich people, they might just know what they’re talking about."
- CBS Radio Commentator David Ross
In the midst of the hubbub over the downgrade of the U.S. credit rating and the jitters of Wall Street, I found an interesting stock. As most of you know, DNDN was absolutely skewered yesterday- more than half of its value was cut down because of an earnings report that failed to convince investors of the soundness of the company's earnings. However, DNDN's earnings report by no means should have warranted such a precipitous drop.
Semi-obscure stocks such as DNDN are prime targets for speculative traders who sell at the first sign of a downturn. A drop of this magnitude can confound even the most astute "buy-and-hold" investors, but makes absolute sense to sell to people who buy/sell on trends. However, a positive aspect of this drop is that it flushes out a lot of the volatility in the stock (as of now). Also, the general hostility of the market has played an essential role in the diminishing of volatile growth stocks such as DNDN, and the management's retraction of its future forecast also contributed to the firesale.
In a sale high on emotions and arbitrariness, we need to get down to the essentials. Upon closer inspection, DNDN has some extremely positive factors going for it. Sales Change % From Same Quarter of Last Year: 1664% 3 Quarters of EPS Acceleration 3 Year Sales Growth Rate: 567% Debt/ Equity Ratio: 11% Gross Revenues Increase From Prior Quarter: 81%
These factors show that, although the technical analysis for DNDN might be horrid (72.1% off 52-week high) it is still a tremendous growth stock. Practically nothing has changed, except now it is a tremendously undervalued growth stock that has seen a significant amount of its speculative traders flushed out. Of course, this hostile environment could mean more volatility in the near-term, so if you are going to invest in DNDN, prepare for a potential rollercoaster ride. [more]
This monumental downgrade and extreme pessimism from credit rating agency Standard & Poor was, I hate to say it, just them doing their jobs. In fact, this downgrade probably reflects the increased objectivity of the rating agency- they had the audacity to give out their caustic opinion irregardless of the fact that volatility is at an all-time high and optimism is nonexistent. That's understandable, even admirable. And I certainly agree with their pessimism about "the capacity of Congress and the administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government's debt dynamics anytime soon." [more]