I have a habit of buying small stocks that are barely followed by sell-side analysts, as I think you can find the most inefficiently priced stocks where there are fewer people watching. The downside to that philosophy is above-average volatility, as Sauer-Danfoss (SHS) is ably demonstrating today. While investors were disappointed by the sharp reversal in momentum at this commercial vehicle supplier, the long-term growth picture still supports a substantially higher price.
Pretty Dismal Fourth Quarter Results
To management's credit, the results reported for this quarter were consistent with the lower end of the range they gave with third quarter results. Unfortunately, with no analysts following this stock (apart ValueLine), there really wasn't a consistent voice out there reminding investors of the potential slowdown this guidance implied.
Read the full piece here:
Sauer-Danfoss Pummeled, But Not KO'ed
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