Zachary Scheidt

Brink's Home Security Spinoff: Too Far, Too Fast

NSX - sounds like a deal to me. Let's use closing price 6/30/10 to keep it simple. But I'm wondering if you want to narrow the range a bit...

I'm expecting that $14.75 would mark the floor - and obviously the stock could be above the floor on 6/30 but still have my thesis be correct. By the same token, the stock wouldn't need to go to $55 for you to be right. I think $40 would still prove your point.

So how about this, a close below $20 (a 33% drop) is a victory for me, and a close above $40 (a 33% increase) is a victory for you. If you win, I'll give you a complementary year to the ZachStocks Growth Model (zachstocks.com/zachsto.../) and if I win you hook me up with a security system (base model) with monitoring... and NO, you don't get the access codes :-)

Sound like a plan? I love a good natured competition.
Thanks for a differing opinion with a little humor,
Zach
zachstocks.com

Brink's Home Security Spinoff: Too Far, Too Fast

haha - NSX we definitely need to look into an inverse ETF. Or maybe I could just get you to take the other side of each of my trades... Not all of them work out, but we've had some pretty good success stories... Still, I appreciate your good natured ribbing -

Anyway, I'm not doubting the stable nature of this business. Just the inflated stock price. It's abnormal for a steady (but not rapidly growing) firm to trade at such a premium. One of two things is likely to happen in the coming 6 to 12 monts:

1) The company grows into this multiple by surprising ME and the consensus of analysts and growing earnings relatively quickly in 2010..... OR

2) the stock drops to a point where it is more in line with the current earnings picture.

But my bet is that in a few months we will not see such a high multiple on this stock. So which is it? higher earnings or a lower stock price? Only time will tell.

Thanks for the comments,
Zach
zachstocks.com