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Dear Sirs
I have been watching the discussions about reported earnings for this
quarter being less than expectations and why that may mean a correction for
the stock market. I can only comment on what has happened at the company I
work for to illustrate why this line of thinking is very misguided at least
and positively dangerous. The company I work for is followed by many
analysts.
We just reported a very poor 4th quarter, in fact the first quarterly loss
for many many years. The loss was due to heavy restructuring charges and
very bad business conditions. The key fact, however, is that the company is
now resized to meet future business conditions. This is a cycle and in my
industry we have been through a very real and damaging cycle and now we are
coming out of it.
I know what our expected earnings are and I know that they are pretty
realistic. In many of our customers confidence is turning up and the Asian
thing is sorting itself out a bit. I think our own stock price has between
50 and 100% appreciation over the next 18 months assuming the PE ration
doesn't go to hell (I see no reason YET why it will. I am a strong buyer.
Yes there have been plenty or earnings disasters in Q4 but buyers now are
looking out. I am a buyer based on the real information I have at hand.
Respectfully
Douglas Meakin
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