Value: Value is a measure of a stock's current worth. CRM has a current Value of $10.77 per share. Therefore, it is overvalued compared to its Price of $38.39 per share. Value is computed from forecasted earnings per share, forecasted earnings growth, profitability, interest, and inflation rates. Value increases when earnings, earnings growth rate and profitability increase, and when interest and inflation rates decrease. VectorVest advocates the purchase of undervalued stocks. At some point in time, a stock's Price and Value always will converge.
From the same document - which one is right and why?
Recommendation (REC): VectorVest gives a Buy, Sell, Hold recommendation on every stock, every day. CRM has a Buy recommendation. REC reflects the cumulative effect of all the VectorVest parameters working together. These parameters are designed to help investors buy safe, undervalued stocks rising in price. They also help investors avoid or sell risky, overvalued stocks falling in price. VectorVest recommends that investors buy high VST-Vector, Buy-rated stocks in rising markets.
GRT (Earnings Growth Rate): GRT reflects a company's one to three year forecasted earnings growth rate in percent per year. CRM has a forecasted Earnings Growth Rate of 30.00%, which VectorVest considers to be excellent. GRT is computed from historical, current and forecasted earnings data. It is updated each week for every stock in the VectorVest database. GRT often foretells a stock's future price trend. If a stock's GRT trend is upward, the stock's price will likely rise. If GRT is trending downward, the stock's Price will probably fall. VectorVest favors the purchase of stocks whose GRT is rising and is greater than the sum of current inflation and interest rates, (9.63%).
I thought that you didn't agree with $10.77 - or have we talked you around to that figure now.
I think it's worth $12 intrinsically without calculating growth options or professional services. I am willing to accept that value the growth options + professional services is > $25, I might not buy, but I'm not selling either.
I see your point that a lot of shorts here are knockle heads. But so are the longs. I see your point on why this stock is fairly valued. Here is the only problem with your argument, you need a very complicated discussion and assumptions to see this stock trading where it is. The key in your analysis is growth assumptions. The people who are buying this stock are buying it because of technicals and momentum, and end of quarter mark up. Once the markup is over, your long knuckleheads will sell the shares they pushed short knuckleheads up with. The stupid money will be flushed. Also even for your analysis, the price to sales is extreme on this stock. I like buying tech stocks, but I buy them when they hit some problems that I can see how they can work through them. I buy them before they bottom, and I sell them way before they top. I noticed that it's not worth to be greedy, and I like ease of entering and exiting positions when the market is still going against you (buy down and sell up). I have positive slippage, and I can accumulate big size at good prices. I know people trade momentum, it's just not working for me. I like value and counter trend trading.
So your argument is:
Ha Ha I'm right. I know I am, I am , I am , I am. Therefore the market will do as I say.
Very clever. I wish I was as clever as you are.
Which of the VectorVest reccomendations did you pick by the way - the one that said it was overvalued or the one that said BUY ?