One Investment Timing Strategy for Value Investorsby InvestorGuide Staff
It is not uncommon for a company to have great earnings over a period of 6-8 years and, then decide its time to take the business public. After a great IPO, the business may stagger and fail to meet earnings or revenue expectations. As a result, the stock may nose dive and fall out of favor with the investment community. Value investors, however, see this as a potential opportunity: solid and sustained earnings growth is no accident - the company knew what it was doing before, and one or two bad quarterly reports don't necessarily spell disaster. In fact, they may be due to massive investments in the company that may result in increased profits, higher dividends, and higher stock prices in the not-so-distant future.