CK

Buying Blue Nile on Company, Analyst Cautiousness

Nile is ridiculously overvalued even after its drop today. Using 2008 estimates ($1.25 which are definitely too high), you get a PE of 36X. That is an insane valuation given 1) the current consumer environment, 2) they've averaged 24% EPS growth over the last 3 years - that's a 1.5 PEG - this stock isn't cheap!, 3) they are expecting a FLAT year. Paying a 36 multiple for a company that may at best see 10% growth this year is crazy. I agree with LBC that this stock will test the 20s before long. This is SHORT!!!