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Varchild2008 (83.69)

I want my Stock to reach its UNFAIR price!

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June 08, 2009 – Comments (3) | RELATED TICKERS: ANF , BLOKA.DL , MNST

Gee? My stock's undervalued and hasn't yet reached its UNFAIR price....

But seriously... what the heck is a FAIR price?

Setting aside sector P/E multiple differences where Biotechs tend to get ridiculously overinflated multiples while beverage sector is pretty stable around a 15-16 P/E.

How in the heck do you judge what's fair and what's unfair?

I have stocks that beat earnings estimates far better, far greater than other stocks in my portfolio and they carry far less of a P/E multiple....and an Analyst still comes out and says my stock's price is fair? How's that FAIR that even within the same SECTOR:

(HANS) Hansen Natural Corp  gets around a 25+ P/E

and

(KO)
(PEP)
(DPS)   Never traded that high all last year and so far this year?

What makes FRPT suddenly carry an inflated P/E over the average P/E it held all last year and most of this year all of a sudden?

You can say it's growth or expected growth. But, is it?   Hansen Natural Corp comes out with an earnings warning proving that all investors that pumped the P/E sky high basically gave it an UNFAIR price instead of a FAIR one.

But, what exactly is fair?  If you were the GOD of the STOCK MARKET.... wouldn't it make sense to say "Enough is enough" no matter what the stock or sector you all get a 15 P/E!  You want to increase share price?  Get better earnings!

The following are stocks I'd love to see eventually reach their UNFAIR stock prices (I own none of these following stocks):

1)EGY)   VAALCO was on a role hitting a high note of 8.00+  a share.  Earnings woes brought back down near its 52-week low. Isn't it about time this 5 Star Fool stock get its UNFAIR P/E multiple with Gas prices at or just below $3.00 a gallon?  Oil at or near $70 last week?

2)GMGMQ)  Or better yet...whatever the heck the GM stock's ticker symbol is when it emerges out of bankruptcy...Sure would be great to see some profits out of GM for a change and a bright future.....  I can't say that I'd be disappointed if GM succeeded cause any lift to GM will be a good thing for FORD (which is my stock).

3)HOTT, ANF)  Is Aeropostale and "Buckle" the only clothing stores for teens to go to anymore?  America's economy can't be reduced to Shopping Malls in which the only place to buy a T-Shirt is Aeropostale or The Buckle.  Might just be me but I get tired of TEEN Stores looking like "FADS" and going bust right in the middle of a long bull run.  Where's the growth story in these 2 stocks?

4)BBI)  Yes, Blockbuster makes my list of stocks I want to see with an UNFAIR P/E multiple.  But, only because if every video game, book, music CD, movie DVD, and even a bucket of Popcorn is purchased by Downloading it Online to your Console, Mobile DSI, DVR, TIVO, or whatever....Then how in the heck am I to ever see the SUN anymore?  I'd have no reason to step 1 foot outside if everything I wanted can just be "Downloaded."

3 Comments – Post Your Own

#1) On June 08, 2009 at 9:03 AM, Gemini846 (49.69) wrote:

Solid Rant. :) If you have something trading "too dang high" then just hang onto it and be ready to sell when the market figures out what its done.

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#2) On June 08, 2009 at 11:15 AM, dudemonkey (39.74) wrote:

Fair price = intrinsic value / # of outstanding shares

I can't see how you could possibly calculate a fair price any other way.  That could just be me, but the intrinsic value thing has been working out well so far so no need to abandon it.

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#3) On June 08, 2009 at 4:16 PM, Varchild2008 (83.69) wrote:

I'm a fundamentalist and so my rants are geared towards that line of thinking.... Well.. Actually I am an "ULTRA" Fundamentalist... I simply disregard all technicals as *bogus* and begin and end my research based on what I know about the company and its business today, yeterday, and tomorrow.

If I don't know much I don't bother with it.  If I do know a lot or feel that I know a lot... then I may short term trade it like I did with (HOTT) recently and got burned a little.

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