|Don't Chase it, Buy on Dips|
|Friday, 08 June 2012 08:37|
I don’t like to buck the trend, especially when new highs are made on good volume. But, in this case, we have to fire a warning shot across the bow. InnerWorkings Inc. (NASDAQ – INWK - $12.90) has been on a major tear recently. You may find this hard to believe but people still print a lot these days. INWK has major clients that hire it for its outsourced print procurement services such as promotional materials, direct mail, etc.
INWK is becoming a real player in the outsourced $500B printing space and the numbers for the company are on the rise. Big time. Hence, the rise in the stock.
Revenue is expected to jump from $634M in 2011 to $793M in 2012, with EPS leaping from $0.32 to $0.43. Moreover, big growth is expected next year as well, with EPS forecasted to reach $0.59.
The Company’s fundamentals are strong, and the chart is great. However, in the near term, the stock looks like it is near it is short term full value, with a FY12E EPS P/E of 30 and P/E of 21x FY13E EPS.
So, the moral of the story is watch it, pick it up on dips, but don’t chase it.
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