To me, ACO is a long-term strong buy. With a company growing Earnings at close to 30% a year and a P/E of 26, the stock seems very cheap to me. Yet, after a great Q4 with increased revenue, sales, EPS, and a strong forward-looking outlook for 2004, the stock has begun a strong sell-off, albeit on light volume, for 10 points now. Any clues on the situation? I want to cost-average in but its hard to catch a falling knife.
Ihave noticed with many of my stocks that someone comes in first thing in the morning and dumps 10,000 -15'000 or so share at a dirt cheap price first trade in the morning. This sends us little guys into panic selling and the stock tumbling and then at noon or the end of the day someone comes in and buys up hundreds of thousands of shares at dirt cheap price.I have seen this pattern over and over.I have seen this by looking at the volume on the intraday chart.I also asked someone who I consider to be an expert "why?" . I was told that its because they are greedy and want to make 30% off these stocks instead of 10 0r 12%.I believe the institutions are puposely knocking the prices down,to buy them cheaper.They are hitting different stocks on different days, so the whole market doesn't go down at the same time.I think most stocks will be hit until they get the price to the point that they want to buy it.I believe this happens every year in Jan. and Feb.Lots of people get run right out of their position in a stock.I also believe that ACO is a stock that alot of institutions wanted to buy into,so they are hitting it hard. I own UPL they have knocked it down bad several times . One of the co. that I own bought a bunch of there shares back..therby reducing the amount of shares available for sale.This pretty much stopped that action.If you look back at any stock chart at this time last year and the previous year,you will see that they all pretty much nose-dived.Most stocks did a double dip last year.I also notice that they find rediculous reasons to pick apart alot of co.'s earnings reports,just to justify the sell-off. Take a look at 3m and Catapillar.I was scrambling to figure out what was wrong with these great earnings reports.I got run out of both of those stocks.I don't think they are finished knocking down either one of those stocks.I do think they are about finished with this stock though.They hammered it too many consecutive days,and it came back up quite abit today.The chart technicals tell me it's going to reverse. I also think the insiders are savy enough that they sell their stock off,before the institutions start knocking it down. Alot of co.s insiders sell off in Dec. or early Jan. As in past years I suspect these stocks will be climbing back up,and they'll be upgrading and telling us to buy ,buy ,buy, real soon.I'm holding on to this one.Because I really think prosperous times are ahead for it, obviously the institutions think so or they wouldn't be hammering it down to buy.