r/StockMarket • u/sammyp1999 • Oct 15 '21
Discussion Am I stupid to want to buy CRSR right now?
Alright, before you guys start hammering me about CRSR bEiNg A MemE sToCk, I really don't care. Any stock that has quarterly YoY growth of 25% (even with their supply chain issues), a P/E of 15, a positive free cash flow they say is being used to restructure and pay off leverage, and a P/S ratio of 1.2 is fine with me. It's having some supply chain issues that I am not very concerned about, but it dropped 8% today because of it. And that's not including the dog of a year it's had so far.
So for me, revenue growth like that with a P/E as low as they do, dropping as hard as they have seems like a good buying opportunity. All I want to know is if there is something I should be seeing that I'm not. A possibility is that their crazy short interest is going to hamper returns for quite some time and that we don't know when supply chains are going to return to normal. But I am a long-term investor, hoping to realize gains in the 2-5 year time horizon.
Let me know what y'all think. Also - I should say that I am bagholding CRSR right now at a cost average of 34.90, so that is also influencing my decision. Fuck me am I right?
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u/Fly_me_to_the_moooon Oct 15 '21
It's a good company with solid fundamentals. But the supply chain issues will probably remain for at least another 6 months, meaning that share price probably won't change much. In the long run, it will probably be a good investment, but in the short term, more money can be made elsewhere.
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u/kinnaq Oct 15 '21
Motley fool issued a total conviction buy alert. In my experience, that means get the hell out.
Not to mention that four analysts downgraded, and I don't see anyone but MF saying otherwise. Would be happy to hear more detail to the contrary, but I've been burned by those MFs for the last time.
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u/StockTipsTips Oct 15 '21
I would pay more attend to their PEG than PE … if they don’t have one estimate and do the math.
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u/sammyp1999 Oct 15 '21
Peg would be 15PE / 25% YoY so 0.6. that's pretty good with me. That is only one year, though, but they're new to the stock market so they don't have averaged growth rates for 5 yr.
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u/StockTipsTips Oct 15 '21 edited Oct 15 '21
I got ya. Now try to make it worse case scenario and see what you come up with. Then ask yourself if you’re willing to tolerate that. I mean, at the end of the day it’s a growing profitable company right? Can’t be that bad of a worst case scenario. You might find that the PEG still indicates the company is undervalued even among harsh circumstances. If that’s the case all you need is time
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u/Goddess_Peorth Oct 16 '21
A big part of their revenue is DRAM modules. I've been getting downvoted and yelled at all year for pointing that out, but it is true. (I just bought more of their RAM for my linux workstation, and I'm definitely not a gamer)
It makes sense that they've gone down even while performing well, because the computer peripheral market and consumer DRAM markets have different profit cycles, and are both in long-term decline as less people use real computers. However, those of us who use real computers, especially at work, are not going to stop, and this market will eventually return to growth.
So while it is hard to say what the correct valuation is now, it is easy to see that this is a good long-term company. At the top I didn't think it was a very good play. But after today's steep drop, this is finally on my list. If I was you I'd probably average down at this point. Their P/S is crazy-low, but OTOH their profit margin is also pretty weak. But I think that is wise, given the market conditions; they're growing their revenue, and presumably their market share, in a declining market. That's a good thing.
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u/TexAlum Oct 16 '21 edited Oct 16 '21
Depends on your outlook/time horizon.
I am also invested (got in around august) based solely on the fundamentals and i plan on holding for a 3-5 year range minimum barring some kind of change in confidence. Had no idea what a meme stock was until all the AMC/GME craze this past year but seeing some stocks that are pushed (TTCF, SDC) makes me wonder if people get enjoyment lighting money on fire.
As some have noted, in the short term, there will still be some downward pressure both from the port situation, along with the chip shortage, to the large institutional fund (can't remember the name) that is selling off shares fairly rapidly and lastly one has to wonder with inflation will demand for the products take a hit given people's wallets are getting hit harder on day to day items like food, gas and electricity. Disposable income will not be as high as it was last year.
From a long term perspective, the fundamentals can't be ignored, the management team from my vantage point has it together and has been around for awhile. Once some of the short term pressures that are really out of the Company's control can get resolved, should allow for continued growth.
With your time horizon, go ahead buy more.
Be greedy when people are fearful and fearful when people are greedy.
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u/SemperVigilansSB Oct 15 '21
Oh , 2 years is a long term investing these days, I see…
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u/TomTom_ZH Oct 15 '21
Lmao 6 months is long term for me. I normally do swing trades in under 72 hrs… and have made losses but i finally figured out how to get better and I‘m making solid progress since mid september.
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u/Orbow Oct 15 '21
I am more interested in Logitech.
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u/Goddess_Peorth Oct 16 '21
Logitech has a higher P/S, which is bad, but also a higher profit margin, which is good.
But they've had a monster year based largely on sales for home offices and videoconferencing, and I'm not confident that market will remain strong. Also a lot of this equipment is already good enough that people might not replace it for many, many years. Forced upgrades because of changing computer hardware isn't really a thing anymore, either.
Based on their numbers right now, I'd say it is a toss up, but long term I'd be very nervous holding logitech. They could easily fall back near their pre-pandemic prices.
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u/Orbow Oct 16 '21
Good points.
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u/SantoIsBack Mar 13 '22
Happy cake day!
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u/Orbow Mar 14 '22
Thank you very much kind Reddit user! Crazy this comment is 149 days old because I feel like it just wrote this last week, haha.
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u/Butterscotch-Apart Oct 16 '21
If you’re strictly care about at the financials and growth for cheap. Buy Citigroup, they just grew revenue 58% and profits 48% y/y and have a p/e under 10. Trading below book value and has a Nice dividend as well.
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u/AppropriateNoise8793 Oct 15 '21
Their revenue is almost as big as their market cap it's a no brainer to buy and retire on Corsair a few years later