Why Are Investors Surprised ?
May 17, 2012 1 Comment
If you are transportation
company….
- working on a net margin of 3%,
- trading on a P/E ratio of 14 (vs. the underlying index P/E of 11),
- when Goodwill equals a figure that is half of your Market Cap,
- dealing in a fragmented marketplace with rising fuel and wages costs and
- that has negligible free cash flow;
why are investors surprised when the stock falls 15% on bad news?
In capital markets, it is difficult to pick an investment winner but it should be easy to figure out what to avoid.
Advertisements
Indeed and servicing industries and sectors that are at their nadir . But the question was asked by you – where to park extra capital ?