At first, when I saw CPNE's numbers out today (http://biz.yahoo.com/bw/070222/20070222005313.html?.v=1
), I immediately thought I should sell it here on the 3 Stocks on Fire Portfolio
, but as I walked for a coffee I saw it with fresh new eyes, the eyes of someone looking at the stock for the first time.
Those eyes see:
- $0.18 full year 2006 EPS. Means trailing earnings multiple of $3.32/$0.18 = 18.4
- 275% year on year revenue growth
- 4th quarter basic EPS of 9 cents and fully diluted EPS of 8 cents. Multiply this latest number by four quarters, and not considering potential growth, which is a lot, one easily gets to a forward earnings multiple of 10.4.
This looks very cheap to me.
But, there's the possibility of the market, as I and Michael did, expected even more. Today there will be a struggle between people that are new to the stock and see outstanding numbers, and people that were already in the stock and expected even better numbers.
I don't know who will win the fight. I'll let the market speak, and I'll listen. If CPNE.OB starts falling down and prints $3.15, I'll sell my shares held here on the 3 Stocks on Fire Portfolio
, which were bought at $2.08. If the stock opens and starts rising, surpassing the most recent high of $3.48, I'll probably keep holding. Will also listen to the webcast at 11:30 am ET (http://biz.yahoo.com/prnews/070212/lam057.html?.v=82
By all means I'll keep on holding it as a long term investment at the Main Portfolio
, very hard to find such an attractive small cap.
I think today can be ETLT.OB's day to push significantly higher, we'll see. I'll also continue to hold PFSW.
By the way, I welcome your suggestions to cover some more stocks today, thanks