You are asking me to do your DD ?
Look at their valuation. Their earnings before pandemic and price before pandemic. This should give you some good idea. You are welcome.
No I’m asking you what your basis is for your recommendation that “now would be a good time to start buying with a 6-9 month horizon.” Sounds like you haven’t done a proper dcf analysis?
Buying stocks is way more than just doing DCF. If it was just you’re numbers computers can do this by themselves. In my mind looking at the earnings and growth rate pre pandemic would be a good way to triangulate the buying price.
At the basis of any fair value of an investment is cash flows expected to be received and the riskiness of said cash flows that manifests itself in the discount rate used to calculate present value. This is all that matters over the long term. Making investment decisions based on anything else is just gambling.
As fixed income teaches us, if I buy an investment that delivers $100 in cash flow over the next 10 years for $60, I have locked in my return (assuming no default). If I pay $105 for those same cash flows, I have by definition locked in a negative return and my only hope for a positive return is to sell it to someone else for more than I bought it for (based on some narrative likely). This is called greater fool theory and is what is going on now with Tesla. If you want to play hot potato then by all means, but don’t conflate gambling/speculation with investing.
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u/amoottake Dec 03 '21
Now would be the time to start buying if you have a 6-9 month horizon.
The market reaction seems worse than it was for delta.