Share |

Wednesday, August 4, 2010

A Big 0 Mistake

Shares of ATPG Oil & Gas Corporation (ATPG) skyrocketed 10% to $13.2 per share, continuing the strong uptrend for the third straight day. The stock has already gained more than 30% in just two weeks. However just last month JPMorgan analyst was bearish on the stock while another analyst cut the price target by 41% to $10 per share. At that time ATPG was trading at as low as $9.14 per share and it was probably the best time to buy the stock.

insider transactions of the stock shows the directors have been bullish on the stock recently and have been buying around $9.17 per share. There is no selling even after the negative comments from the analysts. So do you believe the insiders? Or do you believe the analysts?

Well it turned out that the analyst actually made a huge mistake as the analyst thought ATPG would need $500 million of funding. The mistake is that extra 0 at the end and that extra 0 at the end change the valuation of the stock completely. At the moment $13 per share for ATPG may even seem cheap.

So again do you believe the insiders? Or do you believe the analysts? The lesson learned here is to always do your homework and check multiple resources. And the golden rule applies "When everybody is fleeing, it is the best time to buy".


Post a Comment

Subscribe to Post Comments [Atom]

<< Home