Q: Peter and His Wonder Team
I believe they just had a good quarter and one analyst has raised the target price from $11.00 to $12.00. Today it hit a new high of $10.20 on high volume. I do worry about their debt. I also realize that TD Webbroker always seems to over estimate target prices. I have been very patient with this stock and am up. So I am wondering what the odds are that it will go much higher or should I just sell and be happy and eliminate risk. Your thoughts please! Thank you in advance for your opinion which is always helpful in my decisions.
I believe they just had a good quarter and one analyst has raised the target price from $11.00 to $12.00. Today it hit a new high of $10.20 on high volume. I do worry about their debt. I also realize that TD Webbroker always seems to over estimate target prices. I have been very patient with this stock and am up. So I am wondering what the odds are that it will go much higher or should I just sell and be happy and eliminate risk. Your thoughts please! Thank you in advance for your opinion which is always helpful in my decisions.
5i Research Answer:
The quarter was good with a 9% beat on earnings per share, and estimates have also been ticking up. The stock is up 22% YTD and now trades at a 'not cheap' 22X earnings. Debt is 2.5X cash flow which is on the high side but we would not consider really that problematic. 20%+ EPS growth is expected next year. There is some cyclicality here, but we think there is enough positives to continue to make it a HOLD.