The recent selling pressure reflects the fact that some investors in the market no longer believe the profit guidance.
The key lesson here to the CMP management is that it's never good to over-promise but better to be conservative with guidance and then over-deliver.
The thing with reputation is that it takes a long time to build and it takes a moment to destroy.
Right now, CMP management credibility is in question after missing two consecutive guidance, provided by their very own.
Right now, the valuation, based on guidance, if it still holds, means that P/E is trading in the range of 14-16. Quite attractive for a firm with growth potential.
I value CMP's products and commitment to its core competence through R&D, while being led by the founder. However, I hope the management being more honest an upfront.
If they are unsure, never promise it. If something is a maybe, then it's a no.
CMP Price at posting:
37.0¢ Sentiment: Buy Disclosure: Held
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