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Strategies & Market Trends : Speculating in Takeover Targets
CTG 7.075-2.5%3:59 PM EST

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To: richardred who wrote (5518)9/11/2019 1:18:42 PM
From: E_K_S1 Recommendation

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richardred

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UNFI gaining traction w/ good vol. I am holding for earnings and if on track, I think this is a $30/share stock. Have high cost shares at $14/share and a few at $17.50/share but avg cost at $10.50/share.

I use the Grahm No. valuation model which is all based on earnings. That will be key what they say for forward guidance. Range is $1.60/year to $2.00/year . . Using a BV= $29/share and $1.80/share the GN value is $34/share.

The problem is there may be more write downs (ie goodwill) and/or from asset sales that moves the stated BV lower. If you adjust the valuation model for a BV=$20/share and use the $1.80/share earnings, the GN valuation is still $28.50/share.

So you can see why my Buys at $17.50/share and $14.00/share seemed like bargains at the time.

If the market believes that the $1.80/share is there w/ growth, stock s/d sell North of $30/share.

Never bad to book gains. However, to get full value, it takes time and a change in market expectations.

EKS
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