Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 2
With CNXS exploding past $23 today to $24.41, I've officially reached my second HG two-bagger (the first being Mine Safety). Two of the most boring of the HG stocks ... I love it.

However, that said, I do have a valuation concern about CNS. As recently as April 18th, the stock traded at $14.15. Then they announced a good quarter on April 28th, and the next day the stock closed up $2.53 to $18.78. Subsequently, the stock has traded consistently over 100,000 shares a day to get to this point.

Currently, the EV of CNXS is $267M, with FCF around $12M (according to Yahoo ... I'm not always confident about their stats, but ...). That gives us a EV/FCF ratio around 22. That seems very optimistic to me for a business that hasn't been growing very fast. I'd personally like to see Fiber Choice continue it's growth run, along with either Breathe Right growing better or a third product showing promise before according this kind of valuation.

Has enough happened in the last two quarters to justify a double in the stock? Are we seeing the entrance of 1 or 2 institutional buyers who are a little overexuberant? Is Matt Richey backing up the truck to make himself look good? How high is up?

Any thoughts would be appreciated.

Regards,

Tom

P.S. BTW, we have blasted past Matt's target price of $18-$21 by September 2006.
Print the post Back To Top
No. of Recommendations: 2
I have to agree that I never expected $24 this soon, but I would say that this stock has finally attracted the type of interest we have always expected. The PE remains in reasonable territory, up from the disrespecting levels it had back in the $10-12 range when I bought in. By the way, thanks to everyone who sold back then. I really appreciate it. Thanks for the double.
Print the post Back To Top
No. of Recommendations: 0
Perhaps I've found part of the reason ...

http://tinyurl.com/aox9y

MINNEAPOLIS--(BUSINESS WIRE)--July 6, 2005--CNS, Inc. (Nasdaq:CNXS), the Breathe Right(R) company, has been added to the Russell 2000(R) Index, as well as the new Russell Microcap(TM) Index, effective immediately. Russell reconstitutes its indexes annually, ranking companies in the U.S. stock market by market capitalization. CNS' current market capitalization is approximately $310 million.

Regards,

Tom
Print the post Back To Top
No. of Recommendations: 0
Making the Russell Index is great stuff. The big question is whether these pricing levels are sustainable in the short term. Will we see a pull back soon?

Unfortunately, I bought in a bit late and have a few points to go in order to hit my double. Right now, I have rounded first base and am 2/3 the way to second.

DHeavy
Print the post Back To Top
No. of Recommendations: 1
almost every stock is bound to drop in the short term. If you hate to see that, then take the $ and run. Of course it's silly unless you need the $ and like giving GWB more of your $ (he does seem to need it, as he's spending 350B more than he brings in).

Dan
doubled on cnxs and absolutely expecting it to drop in the short term.
Print the post Back To Top
No. of Recommendations: 0
statsguy

There are other forums on which to vent politically. In the past HGs has not been used for this. I would love to respond though.

Thanks

charlie long CNXS and a third HG double-- FARO and TKTX are other two.
Print the post Back To Top