I bought a few shares of Logitech (LOGI) today. I've come to face the reality that I may have to go long on a few of my stocks, or at least go longer than I normally would, to get a good profit off of them. With LOGI, I hear rumors of a Microsoft buyout occasionally, but I find them unlikely. Instead, what I see here is a decent company with a strong historical chart. Let's take a look at the five year chart.
Look above, and you'll see that the stock has always ended the year higher than it began while dipping mid-year. Even with the stock splits in 2005 and 2006, the stock *still* ended those years higher. If you look at the five day chart below, you'll see that the stock hit its 52 week low today. It hasn't been this low since 2006 (see above). While it may drop lower, I initially felt no qualms about buying a stock with a chart history like this. I would likely feel comfortable going long on this stock. --Yes, I realize that they could still be trending down, but still, the price looks dirt cheap. And like I said, historically, this stock always goes up in December.
But, even if the chart makes me feel good about this investment, let's take a look at their last earnings report and a bit of news before getting too overconfident. Let's see... their quarterly profit rose by 42%, but the stock tanked anyway because that gain wasn't enough to suit analysts. They're treasurer made a few bad investement decisions that hurt the company, so they fired the guy. Per the link above, the investments cost the company over five million dollars. Anyways, they're still looking at a 15% growth target for this year, and barring a market crash, I don't see any reason why the stock shouldn't be back up nearer to the $29-$30 mark before the "Christmas rally" (the strongest time of year for Logitech) arrives. Heck, the 52 week high is actually just over $37 a share.
Anyways, they've got a market cap of $4.4 billion, and the make keyboards, mice, headsets, video game controllers, etc. They're a leader in their market. If I had more money, I'd probably load up long at $24.50 and below and wait for the Christmas rebound. Also, if you like to speculate, they've been known to buy out smaller competitors and are talking about doing more acquisitions.
As I'm a small cap player for the most part, this makes me want to buy up some MCZ (a purely speculative buy) or some of the other small caps worth less than $100 million. By my count, only fourteen companies who deal in computer peripherals are worth less than $100 million. And there are only a few of those that LOGI would be interested in. However, I guess there are other market areas LOGI could be interested in that don't show up on the "peripherals" company chart, and I don't think buying MCZ stock is worth the risk.
Anyways, there's some random thoughts on LOGI. If you like to go long, I think the five year chart is pretty self-explanatory. The last conference call was good news too. Too bad analysts hold so much sway and otherwise good companies get hammered for no "real" reason.
--I tried to put some charts in here. They didn't turn out as nice as I wanted. Maybe the TK staff can add an "insert chart" button to the blogs? Trade notes automatically have the chart.