Monday, July 25, 2011

7/25/11: $2.28

-0.03 (-1.30%)

Another fairly uneventful day for CNIT, with volume just under 130k. The 50dma is now at $2.21 so we're still a little above. It is clearly acting as the major support area, with the stock once again today dropping briefly to that range ($2.19 to be precise) and recovering within about an hour (on great volume I might add). Here's today's chart (note the early drop, which CNIT's been doing a lot recently, and the high volume as it shot back up to around $2.30).


Since the stock's dwindled a fair bit in the past few weeks, I decided to revisit some fundamentals to ensure I still felt good about it in the long term. Here are some data points (obtained from finviz.com):
  • P/E: 3.30 & Forward P/E: 2.40 - with extremely low price-to-earnings and forward price-to-earnings ratios, this is clearly still a good value investment play.
  • Profit margin: ~22% - not only is this small company making money and growing, but it's posting an impressive profit margin as well.
  • Insider Ownership: 38.87% & Institutional Ownership: 34.46% - when investing in small caps, it's important to make sure that (a) insiders are invested in the company's success (i.e.: they have skin in the game to make sure it succeeds), and (b) institutions show support for the stock. This insider ownership is a very good sign (it's primarily all from the CEO, Lin Jiang Huai, however, who holds over 20M shares). The institutional ownership number is fairly good too, and according to finviz is rising (I'm waiting for detailed institutional ownership data from Nasdaq to see how much actually changed, though, and who the institutions are).
  • Price Target: $9.00 - ok so this is probably not the most reliable data point, but it's worth nothing that the one analyst that does have a price target on CNIT is very bullish for the stock, as $9.00 would indicate nearly 300% upside on the current price.

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