James Cramer was forced to cave in on his NYSE Euronext (NYSE: NYX) pick for the year after the HUGE buy recommendation tanked more each month since he said to back up the truck six months ago. See earlier blog by Brent Archer Cramer switches sides on NYX (for now) for more detail. Cramer has been in love with this stock since it reached a high of $112 in November, made it one of his 2007 picks at $97.51, only to watch it sink to $73.62 after six months for a 24.5% loss. It is down a few cents more today as I write the post.
He still likes the stock, but at lower levels, and he might get back in at somewhere in the $60s. Why is this better? What are the fundamentals now? Why can't it be $50 or $40 or $30? The current P/E ratio (TTM) is 71.47. Gee whiz -- at half its current price, it would have a P/E way higher than that of Google's? You're kidding, right Jim? What fundamentals? The P/S is 8.57 (LFY), and the P/B is 9.1 (LFY). NYX has no debt, and there is a decent ROE of 13.51 but not in relation to the P/E.
So I continue to wonder about all of the things in the stock market that I do not understand, this being one of them -- and stay away. If this stock appeals to you at any particular price then I hope you develop some understanding of where the value will come from, but for now, there are better places for your money -- and today even Jim Cramer agrees.
Those of you who are new to BloggingStocks can check out my other stories and read Chasing Value or Serious Money to find more potential opportunities and verify my track record as well.
Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm. Check out his other posts for BloggingStocks here.
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Reader Comments (Page 1 of 1)
7-03-2007 @ 7:18PM
Michael Levy said...
Any stock expert who say's they know for sure which stock to buy is certain to eventually become yesterdays fool.
7-03-2007 @ 11:00PM
Goods said...
Cramer's great at getting people interested in the market but his picks are all of 50-50 at best, like most other analysts.
I've been studying the technicals hard for months now and I'm just starting to come along. I'll thank Cramer for getting me into stocks but I wish I could bill him for all the money he helped me lose before I picked up a few books.
If people aren't willing or able to make a hard effort at learning the market, best to stick to mutual funds run by the folks who know.
7-04-2007 @ 5:01PM
Brian said...
It's called NYSE Euronext.
have you taken a look at Euronext earnings?
use your calculator and use the plus sign.
It looks like "+" in case you were wondering.
7-05-2007 @ 4:29PM
stockman said...
First of all, the PE is ~30 and forward PE is ~20, with 20+% growth rates, a global business and an eventual entry in US derivatives, it is teh most complete global exchange. i don't see it as being overvalued, its not well understood and being arbitraged because it is the acquirer rather than the acquiree. long term value will be realized after the original members selling is complete
7-10-2007 @ 3:54AM
vi said...
Hey genious, P/E values don't make sense without looking at the growth numbers. Maybe you should buy some housing stocks....all trading at single digit P/E, P/S and P/B less than 1.
7-10-2007 @ 12:40PM
Sheldon L said...
Hey "genius" (vi),
Do we understand you are bragging about following this stock down from $112 or some other point on the way down? The housing stocks are a better value and I would be very comfortable buying PHM at $22 all day long instead of NYX for a long term hold. And you have not done your homework. My track record at stock picking is far better than Cramers and most other people. SEE:
Chasing Value update 3: SCOREBOARD BABY! http://www.bloggingstocks.com/2007/07/06/chasing-value-update-3-scoreboard-baby/
and Chasing down 007 picks: Google leads, Cramer sags, value up!http://www.bloggingstocks.com/2007/07/02/chasing-down-007-picks-google-leads-cramer-sags-value-up/