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RuggedCom Inc T.RCM



TSX:RCM - Post by User

Comment by lr7on May 26, 2009 8:40am
522 Views
Post# 16015708

RE: RE: Prediction! / mjc

RE: RE: Prediction! / mjcmjc, you may be new to investing, but I'm sure you know more than some of the bs'ers on boards like this.

The shares of RCM are down for a simple reason.  Last quarter RCM had spectacular results.  This quarter it didn't.  Nothing wrong with growing net income by 49%, but it pales by comparison with the 193% growth in net income the previous quarter.  It's dangerous buying a stock shortly before results expecting repeats of spectacular results because it's not often achieved.  However, you can see that people were in fact paying very high prices for RCM evidently expecting just that.  So what happens to those types of investors when the earnings announcement comes and results aren't spectacular?  They jump ship en masse (not all jump ship because of their own analysis of the results; some do so because they see others jumping ship).  Nothing goes up in straight line.

The way some people justify their investing decisions that go wrong through conspiracy theories and other bogus explanations is often laughable and should be read for entertainment value only.  RCM at $30 is a very expensive stock in today's market with a trailing P/E of 30.  It's now more reasonably priced, but still not cheap.  If you're looking to buy, there could be buying opportunities closer to $20 than to the current level.  I managed to buy RCM at $11 just a year ago - and there was still opportunity to buy at that level as late as the end of 2008.

As for targets, a target of, say, $33 or $35 usually means a target price after 12 months, not one week.  So that's not a whole lot of upside from the $30 level, especially for the type of momentum player who may have been bailing in the last few days.  But even there take any target price with a grain of salt because it's rare that they turn out to be at all accurate.
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