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  • addedupon1 addedupon1 Oct 3, 2011 10:30 AM Flag

    My analysis of ACOM

    my sense is similar to yours, bcwood.

    the supposed BG analysis has been almost refuted by the SP result since the post when ACOM was at $32+. Graham's margin of safety should have protected stock price from falling off a 50% cliff in three weeks.

    the assumed 30% growth rate seemed excessive and was fuel for the sell off. much too optimistic. long term rates are mostly not in control of the FED. LT interest is more about inflation expectations.

    on the other hand, 15%-20% over the next few years, by no means assured, should bring the stock back to $30, assuming no further multiple contraction. anything less will depress the ACOM multiple further and the stock price could flounder in the teens for many years.

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