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Message: PPS

PPS

posted on Apr 06, 2009 12:35PM

One important reason why we have not seen any appeciation in the per share price is that the action in the market, sofar, is focused in the large capitalization stocks. The March rally, most likely, was due to the perception of the bulls that we have already seen the worst and that the market currently presents itself with one in a life time opportunity. Let me give you one example. Take, for instance, GE. Currently it sells at Price/book $1.10; Price/sales $.64; Trailing P/E $6.47; Forward P/E $11.57 and book value $9.933. The price is arpound $11.50. I submit this price is really a oppotunity for the average player who knows nothing about our stock.

Accordingly, the players have not as yet found Edig in their radar. What the management should be doing right now- if they have not done it already- is to articulate a business plan for the future. In effect, there are three alternatives all of which are reasonable and acceptable. First, they can suggest that in the future edig will concetrate in developing new technology and live from the stream of earnings that this can generate. Second, they can also suggest that they are in the business of producing and selling their existing and future stuff and third, they can try to expand through mergers and acquisitions.

Edig is not the first or the last co. that finds itself in this enviable setting. But this strategic decision has to be communicated to its shareholders. By doing so, the mangement will clear the air as to what the future holds, while, at the same time, they do not provide the competition with any professional secret. I fact, they send a notice to all competitors regarding their intentions.

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