I am a holder of GEM from $1.30 in my SMSF and do not plan to sell it until there is evidence that their acquisition model is no longer working (which could be a while?).
This sort of stock will IMO gradually shift to a high PE ratio status, similar to other successful acquisition style companies like AUB, ONT, GXL. Once the market works out that that what they are doing is producing material year on year expansion in EPS without debt getting overdone, and there is plenty of market opportunity for continuing acquisitions, then the market is prepared to price at a high end P/E.
These companies in the end become priced for perfection, so therefore will get hammered the first time they miss a growth target, however they are also very hard to sell on the way up...!
GEM appear to be keeping things under control to me, and I will stay for the long term ride. However, in agreeing with the previous poster that it pays not to fall in the love with a stock, at the first sign of trouble, run for the exit.
cheers gosouth
GEM Price at posting:
$3.20 Sentiment: LT Buy Disclosure: Held
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