WIN ON WYE?

WYE

I put through a limited order for a bit of WYE at 44.75 and did not get filled. I would like to buy some due to the same reason of purchasing ADS. WYE had a great quarter, expectation exceeded, outlook raised, numbers upped by sell-side analysts, yet stock tumbled by almost 3%. Not exactly a panic selling, rather a healthy profit-taking. Valuation is reasonable at about 14X of its 06 earnings, a discount compared to its peers and S&P, unwarranted, in my view, as the company is growing at approximately 10%. I believe it should be traded at a premium of 20X. At minimum, it should traded at S&P average, which would be at 16X. I also like the sector, defensive and OUT OF FAVOR. I am not pressing though today as the market is up strongly. I would wait for weakness, preferably under $45, before I add this one to my portfolio. (It got filled).

I am bit of concerned about JNPR’s pricing action today. It appears that it did not participate this very strong rally, indicating distribution from institutions. While the quarter was great, it is not cheap and the pricing action did not give me much comfort. Given that I bought this on margin and for a TRADE, I am incline to sell it here. One of the worst scenario would be to turn this TRADE into an investment, a losing investment!.