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My Personal Finance Journey

Personal finance observation, musing and decisions in a journey toward financial independence by 36 with at least $1 million.

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TRADE #13 - Buy PPD 140s @ $18.25 in Datek (Backlog for August 2, 2002)



[This is a backlog for a previous trading transaction. It may not fully represent my thinking at the time of the trading.]

I doubled my PPD position today after a purchase of another 140 shares at $18.25.

PPD has been in a continuous downward slope since my last purchase four months ago, losing almost 1/3 of the market cap. At the same time, revenue, net income and EPS are on the rise. Especially, management is using lots of cash flow to buy back stocks. I found it's very hard to think that the current subscription base (1.36 million by end of June) will disappear immediately and there will be no new user of the service as shortsellers forecasted. I believe the earnings and free cash flows are strong enough. With next year's EPS most likely above $2.00, my risk is well justified by the 9x EPS price tag, not to mention there is almost $200M advance commission balance.

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