Thursday, April 5, 2007

MNST (Monster Inc): Yet Another Classic Over-Reaction By The Market

"The parent of the job website Monster.com said in a statement that its revenue for the first quarter ended Mar. 31 is expected to be in the range of $328 million to $329 million, slightly below its $330 million to $338 million forecast issued on Feb. 1. It also said Apr. 4 that it continues to expect the same financial results for the full year 2007 that it had forecast on Feb. 1. At the time, Monster projected revenue of $1.36 billion to $1.41 billion for the year.

Shares of Monster Worldwide Inc., which operates job site Monster.com, continued falling but a number of analysts (a lot of them) said the company will gain from international exposure. Monster backed full-year revenue guidance on Wednesday, but said first-quarter sales will come in below expectations, due in part to weakness in its North American careers unit."

Okay, okay... so what this all mean? It means that they slightly adjusted the guidance and the public over-reacted... as usual. And the result is the public sent the stock down 18%. Translation... Sale!

The North American Market is a little weak now but remember, it's cyclical. But I think as Americans, we don't see the big picture and in this case, it's the world. Monster is just dominating the international landscape and pretty soon, over sea revenue (now 27 percent of revenue) will surpass homeland revenue. But really, the situation at home isn't all that bad so if anything, think of it as an opportunity to get in on a solid stock with growth potential at a relatively cheap price. As always, we'll see.



Notes:
In Portfolio: Entry buy at $40 and will buy more as the stock bottoms out.
Duration: Tighten the leash at $60
Gyroball?: Daisuke Matsuzaka fans 10... Sox win 4-1

1 comment:

Anonymous said...

Good words.