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Does anyone own shares of COGN. They are a Canadian software company whose price has recently gone up (25%) on speculation that they woukd be acquired. (Fall out from Oracle's attempted take over of BEAS.) It's current PE is 31 and it's PEG is nearly 3. Are you holding or selling. It seems that whatever premium an acquirer would pay for the stock, is in the current price. Thanks for any input.
Pat Landers
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I don't own Cognos, but I took a quick look using Take Stock. Take Stock gives COGN a Quality Rating of 1.6. That is in the "not acceptable" range. Drilling down, EPS has declined for two years, and that's a big part of the story.
As you also note, "investor" interest in the company is "hot."
So, I wouldn't be interested in owning the company based on any fundamental analysis. Also, as a speculator, if you've already waited through a 25% appreciation in the price, it's probably not a good time to buy it. But, it I owned it ... this might be a good time to take that 25% and move on ... |
Joe |
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Pat, since there is no specific offer yet on
Cognos, at least that I could see, the possibility for further escalation in
price if it becomes the object of a bidding war might make it worth holding on
to. It is not in a buy range right now. You would
probably need to stay pretty diligent, in case interest in them cools, which
could then lead to lowering stock price. Where is that crystal ball when
we need it? ;-) Gene Rooks, Orlando
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Joe Craig wrote:
>
COGN's 1.6 rating is not surprising since Take Stock currently gives a not acceptable rating to 8466 out of 8611 stocks in the Hemscott database (~98%).
Moreover, some 5140 stocks or a whopping ~61% of all the Hemscott stocks currently rate a big, fat ZERO.
Those statistics are unbelievable...and potentially untrustworthy!!
Armin Fields
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Could you explain the "potentially" part?
In the case of Cognos, you can drill down in Take Stock and the low quality rating is related to the lack of high quality earnings growth. Cognos earnings declined in the two most recent years. Prior to that there are a couple of declines. Steady earnings growth has not been Cognos' claim to fame.
In terms of owning quality growth stocks, what might attract you to Cognos? |
Joe |
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>
Sure....
I meant, as if you didn't already know, that with 98% of the Hemscott data base deemed unacceptable by Take Stock, relying on its analysis is "potentially" misleading and unreasonable.
I don't believe (A) that 61% or 5140 stocks warrant a ZERO for quality or (B) that 98% of all 8500 stocks are unacceptable, at least not if you use some common sense! Do you?
Armin
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Posted By armin fields on 11/03/2007 8:07 PM
COGN's 1.6 rating is not surprising since Take Stock currently gives a not acceptable rating to 8466 out of 8611 stocks in the Hemscott database (~98%).
Moreover, some 5140 stocks or a whopping ~61% of all the Hemscott stocks currently rate a big, fat ZERO.
Those statistics are unbelievable...and potentially untrustworthy!!
Armin--
We've been running the Complete Roster of Quality Companies for several years. Each month, roughly 120-150 or so companies pass the minimum standard for inclusion -- which is that the Take Stock Quality Index is "acceptable" or better. So with 146 currently being rated as "acceptable" right now, there doesn't seem to be any particular cause for concern. The Take Stock Quality Index is not meant to be a casual indicator, but a stringent standard that only high-quality companies will meet.
Doug
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Posted By armin fields on 11/05/2007 6:47 PM
I meant, as if you didn't already know, that with 98% of the Hemscott data base deemed unacceptable by Take Stock, relying on its analysis is "potentially" misleading and unreasonable.
I don't believe (A) that 61% or 5140 stocks warrant a ZERO for quality or (B) that 98% of all 8500 stocks are unacceptable, at least not if you use some common sense! Do you?
I screened all stocks using Stock Prospector and found some interesting things:
27% of the companies now active on the major exchanges have Current EPS of zero or less.
47% of all companies have 1-year EPS growth of 0% or less.
I could go on, but once you understand that the Take Stock Quality Index considers growth as a prime consideration, followed by profits, and weights more recent years and quarters, it's easty to see why so few companies meet the grade. Take Stock Quality isn't the same as S&P Quality or Value Line Quality -- it's designed to consider much different factors.
"Common sense" says that most of the companies trading today on the major exchanges shouldn't have lots of investors interested in them, but yet they do....
Doug
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Actually I do believe that makes sense!
A number of years ago, I believe it was Phil Keating who pointed out that only a few hundred or less stocks merited serious consideration. With that in mind, 2% of the 8500 stocks is 170 companies. As Doug has pointed out. Take Stock identifies between one and two hundred sompanies as acceptable.
I think that it is self-consistent. Coupled with the fact that you can drill down to determine why Take Stock's results are what they are, I'm quite confident. And, when I don't understand ... I can always read Ellis' book and/or review the detailed help information that comes with Take Stock.
I think that it's you who needs to convince me that Take Stock DOESN'T make sense.
BTW ... I just had dinner with a former colleague on the CGAB. During the conversation she said things like ... "once you get into this, you really don't have to work too hard" and "I can just look at the data and see if this is a good company or not." Those aren't direct quotes, to be sure, but they do capture the essence of the conversation. |
Joe |
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Yes , that's what I would expect a screening tool to do. Weed out the underperformers. Even 170 is too many for me to research. I use a dividend component for my research also, so my pool of stocks is even fewer. I own between 15-20 stocks in my Roth and taxable accounts and usually look to add to positions before adding new stocks. Current example is BAC.
EMR got pushed out of my range with today's 5% bump
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Rank: Advanced Member
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Well, the speculation time is over:
"International Business Machines Corp. said Monday it will acquire business-software developer Cognos Inc. for $5 billion in cash, a move aimed at keeping up with rivals in the increasingly attractive field of business intelligence.
Under the agreement, IBM will pay $58 for each share of Cognos"
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And, from the FWIW Department ... Pat asked his question on 11/3. Cognos' closing price was $50.37 on 11/2, and didn't quite hit $54 last week.
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