Comments on: WuXi PharmaTech Inc (WX)

By: Jesse

Jesse — Mon, 19 May 2008 06:23:12 +0000

What are your overall feelings about WX as of today. I know their stock slipped quite a bit along with the rest of the market throughout the last few months.

Does you think WX is at a bargain price now or is their something more fundamentally wrong?

By: Jim

Jim — Fri, 09 Nov 2007 15:35:15 +0000

Jim, I am looking for a catalyst for the recent plummet of WX. Have I missed something? Is it the overhang?

Thanks, Doug

By: Alex

Alex — Tue, 30 Oct 2007 00:10:20 +0000

Hi, Zach and Jim,

Thanks for the great discussion. I have been a big fan of WX so far and has made quite a lot of money from it. I have hold the stock since $35 and plan to hold through the earnings. My understanding is that this company truly has something to look forward to and if good news (almost for sure) come out in the earning announcement, it will make investors more confident that it will continue to grow in the future, so this will almost gurantee a increase in the earning announcement day.

Anyway, stock always involves risk so nothing is impossible to some extent.

By: Zach

Zach — Sat, 27 Oct 2007 14:52:21 +0000

I understand, its a tough connundrum. That’s why diversification is so important because there are events that will move a stock through and below your stop point without giving you an out. At the same time, investing involves risk. Academically, that is what we are getting paid for. Theoretically you should be paid more for the amount of risk you are taking. Our job is to find ways to make higher returns with lower quantities of risk.

Good luck with your trading!

By: Bullishjim

Bullishjim — Sat, 27 Oct 2007 14:41:39 +0000

That’s helpful, Zach. Thanks.

As it pertains to small company stocks, this question has been echoing in my brain for the last couple of days after watching VDSI get absolutely gutted when their earnings report was released. I’ve been in and out of VDSI several times- as I often do with IBD 100 stocks- but I thankfully lacked the courage to hold it through earnings. This was a stock with a 99 fundamental rating from IBD. That being the case how can an investor be confident enough in their fundamental assessment of a smallish company to risk losing their shirt on something like VDSI? This is probably more a rhetorical question than anything.

By: Zach

Zach — Sat, 27 Oct 2007 13:54:31 +0000

Thanks for the comment Jim,

I think for the fundamental investor it is key to hold through earnings announcements. These announcements often represent the most important fundamental news events. If you are investing based on a long term view of the company or the industry prospects, these earnings announcements will be the catalyst to tell the world about the fundamental progress the company is making. If your analysis is right, you want to be there at this time to make the money for your research.

That said, if you are purely a technical trader it may make sense to not be involved during announcements because at this time, the stock will react more due to the new information than due to natural ebbs and flows of the stock pattern.

Hope this helps,
ZDS

By: Bullishjim

Bullishjim — Sat, 27 Oct 2007 13:43:38 +0000

Hey Zach-

What is your general feeling about holding through earnings releases? I tend to sell on the eve of announcements to avoid the gap down risk. Not to mention that I buy solely based on charts so I don’t generally know enough about the companies to make that kind of bet. I’d be interested in your thoughts on this.

Jim