RE:RE:RE:RE:RE:Catching a Knife?There is no question that CRH and NHC are good names, though I'd be more inclined towards NHC and be patient towards CRH at today's valuations and how the latter looks technically. I'd add CXR and GUD into the mix as well. NRI is interesting, though I took a bit off of the table last Friday. Overall, though, I've been fairly light in the health care/pharma/bio tech side for awhile now.
Insofar as CPH goes, I'm looking at 2017 and 2018 earnings forecasts (Thomson Reuters' estimates) and CPH is looking cheaper than a number of the companies mentioned above. Yes, they have a dismal record as to meeting earnings estimates and normally management is at the top of my list when investing, but even when I take a lower future estimate and use a higher discount factor for NPV of FCF I'm starting to like where this company is at. The technicals are the final in the decision to buy.
Styless wrote: icecube wrote: The amount of bashing that is going on, and false accusations being made right now, only increases my confidence that going long at these levels has a high probability of being profitable.
icecube wrote: The sector negativity is a bit of a concern, but sometimes that's the best time to enter a sector.
From a technical perspective it has hit the bottom of the major channel (top of the channel the January 2015 high to the July 2015 high and drawing a parallel line from the April 2015 low.)
It has also hit an important retracement level at $4.80 (though could also hit $4.60 but I'd put the probability of that being hit/broken as being less than 15%.)
Sentiment is extremely negative. Bashing is endless. Oversold? By most measures. Wave count? High probability of it being the 'end'.
Fundamentally, I'm look at how 'next year's earnings' are going to start looking in 2016. In other words, if we're still at this level then we're going to be at a less than 10x 'next year's earnings' (source: Thomson Reuters) in a few months.
I'm not impressed with management's track record as of late but, insofar as I'm concerned, the current price make it interesting to build a long position and I wouldn't be surprised to see it back into the $10 - $14 range sometime next year.
The above information is not meant to be a recommendation of any sort. Do your own due diligence and invest according to your own financial needs and tolerance. Consult with a licensed financial professional in your jurisdiction.
I disagree. Although technically the company is entering the buy area from a technical perspective, i think in these choppy markets, guys want to support winners who can sustain their business and generate real EBITDA and FCF. These names are guys like CRH and NHC. They will get bid up first. while this name got relatively unloved.