Wednesday, November 18, 2015

Market Sentiment

      For long-term fundamental investors the path to superior returns is via market sentiment - both when it is high and it is low.  Gpro has been a constant topic in this blog due to the fact that I long argued that it was vastly overvalued due to market sentiment.  Well things go both ways.  Now, at about $19 dollars per share, I actually think that Gpro is undervalued.  The sentiment has turned so dramatically that its P/E ratio is below the average for the S&P 500.  While it may not have the growth options implied by a $90 dollar price, it does have some.  Ironically, my models suggest a fair value around the IPO price of $24.  Stay tuned as the saga continues.

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