When it Comes to Growth, Try Concor Tech 23 comments
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When going long any stock in the portfolios that I run, I demand growth. Growth of everything that history has proven is needed for a stock to go on a huge monster run.
This weekend, I found many stocks that are full of high-growth characteristics and wanted to start with a gem from the computer-software-enterprise group, an industry that has caught fire the past few months.
Concur Technologies (CNQR) recently showed up on my longs scans in my charting software and after doing some more in-depth research, I have found a stock that I like a lot.
The past eight quarters have been incredible for CNQR, with EPS growth of 100%, 14%, 40%, 14%, -17%, 88%, 71%, and 100% and sales growth of 44%, 40%, 52%, 31%, 24%, 30%, 61%, and 74%. Obviously, this stock is no slouch in the EPS and sales department.
Better yet, YOY EPS estimates for 2008 and 2009 are for growth of 20% and 37%, respectively. That kind of growth is the reason that mutual fund ownership has gone from 94 to 119 to 141 to 150 funds over the past four quarters. That gives mutual funds a 40% stake in the stock, along with management still owning 11%. This shows that the smart money is invested in this stock for the long haul. And I cannot blame them with that growth and only 2% of debt to shareholder equity.
The ROE is only 8% but the total SMR rating in Investors Business Daily is still a top A rating. That A rating goes along with its timeliness rating of A and Acc/Dis rating of B+.
Some might be worried about the P/E being at 72, but considering that the range is usually between 36 and 225, it is obviously near the lower end of the range. Also, an EPS growth rate of 63% indicates to me that the P/E is actually decently priced right here.
However, I never worry about the P/E ratio, as the only thing with a P and E in it that I am worried about is the EPS rating of Investors Business Daily. That EPS number is 99, which means this stock is in the top 1% of all stocks based on price performance. That, along with a stock composite rating of 97 from Investors Business Daily, gives another confirmation that we are dealing with a leading stock in this rapidly strengthening industry group.
While fundamentals make up 80% of the decision of what I go long, the final 20% is up to the chart. And right now we have a solid double-bottom pattern with a strong breakout. If CNQR can continue to base in this range and then breakout to a new 52-week high above the drawn trendline, then I would love to get VERY long. I would also get heavily long with a bounce off the 50 day moving average on very strong volume.
The good news is that the Relative Strength (bottom panel; white line) line is hitting a new high before price is. This is positive divergence and when you take the strong technicals with such great fundamentals, and a stock that has a 13.1 days short-interest, you get a wonderful potential future Monster Stock.
Going long on a market order would also be safe on the bounce or breakout as the stock averages 735,000 shares a day traded and is over $15 a share.
Disclosure: Joshua is not long CNQR but will be on a breakout to a new high or a bounce off the 50 DMA.
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This article has 23 comments:
The growth referred to in the artice during the last year is mostly from an acquisition, and not organic. In fact, the 10Q of CNQR reveals that CNQR and Gelco (the company it acquired as of October 1st 2007 for 168M in cash) did pro forma combined revenue of 43M in the first q of last year. This quarter, the combined company did 50.8M. The real combined growth of the company is 16%, and not 44% as you suggest.
As for EPS growth, not hard to show big percentage gains off of miniscule numbers. Actual EPS for the quarter was 8c, which is identical to that number for last quarter (ie, no growth in eps in the last 6 months since the acquisition). Extapolating that rate of earnings out for the year, gives you .32c.
In fact, the companies guidance is for 53M in revenues (ie flat) for next q, and 211M (ie flat) for the year. The companies own guidance for eps, is 29c for this year.
At current share price levels (about 38/share), you are paying about 125 x earnings, for a company with revenue of growth that is expected to be 10-20% at best. In addition, note that the company has been using its cash to buy back its stock and support the value. In and of itself, this would not necessarily be a source of concern for a well capitalized company whose management viewed their stock as undervalued, but last quarter they spent 30M of their cash buying back stock, while depleting their cash resources to 17M. Seems very questionable to me.
This is one of the most egregiously overpriced stocks on the market today.
I suggest you go to my website and look at my returns. I am FOR SURE THEY BLOW YOURS out of the water.
How many 300%, 500%, 1000%, 2500% have you held?
Your argument SOUNDS good but too bad the fundamentals are what matters and this stock is going to be a great long.
People like you would have kept me out of MXC PDO CSIQ and SOL.
Your investing style is WEAK and will forever lead you to underperformance.
I suggest you read up on CANSLIM. :)
A really good analysis of a potential winning stock. Growth is the biggest driver of a stock's success, and CNQR sure has that.
I've added it to my watch list.
Thanks!
I LOVE THE CHART JOSHUA!!! Seeking Alpha needs more TA. W/out TA you are missing 50% of the game!!!!
Overpriced, wonder if the market will agree with you...
FYI, I dropped my RealMoney subscription since you left. I missed the charts. I think you had 44 pages that I went over and over and over. Thanks for FEED, thanks for SOL, Cramer had me stayin out of China, you showed me a different view. I'm glad you showed up here!! Keep em comin ;-)
As for RM: I miss my charts too :(
You can lead a horse to water, but you cannot make it drink. Joshua is a proven winner. Ron will figure it out in maybe 5-10 years ...LOL
There will ALWAYS be HATERZ like you. Fortunately most are too smart to listen to your hate. I feel sorry for you. God bless you brother. I wish you the best. Get well soon.
On May 20 09:38 AM ronh wrote:
> remarkable number of complements within a very short period of time....hmmm.
>
>
> I notice that you don't let the facts get in the way of arguments.
> good luck. keep on smoking that maui.
WHAT A JERK YOU ARE!!!!! LET ME GUESS, YOU WERE NOT LONG PDO????? GUESS WHO WAS? THAT IS RIGHT! ME!!!!!! YOU ARE A MEAN PERSON.
On May 27 01:34 PM Swiss Miss wrote:
> I do agree with Ron, in that there was a whole lot of festive bull
> banter with little to back up the case on CNQR; other than drinking
> the CANSLIM kool aid mix. At the same time, Ron presented, quite
> possibly, some legitimate concerns facing CNQR's growth and reasons
> that could very well mean the stock will never see one of those lengendary
> runs like DELL or CSCO made during their best years. That being said,
> it's a moot point currently. As it stands; all ye drinkers out there,
> are officially dinked by 8% per the world according to CANSLIM.
btw, anytime you want to have lunch...you can come visit me on my perfect!!!! life on Maui. I am so glad you hate me. I LOVE YOU BROTHER. God bless.
On May 20 08:28 PM pLIBBY wrote:
> re: ronH
> You can lead a horse to water, but you cannot make it drink. Joshua
> is a proven winner. Ron will figure it out in maybe 5-10 years ...LOL
On May 19 02:38 PM User 137954 wrote:
> great commentary and i look forward to more articles from you. those
> that have read william o'neil's books and understand CANSLIM know
> that the stocks that go on to make the craziest gains are the ones
> that may seem expensive to those who pay too much attention to p/e
> ratios.