Why Are Investors Surprised ?

If you are transportation

Truck convoy-08


  • 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.

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