MobileRead Forums - View Single Post - Major Palm investor urges sale of the company

Alexander Turcic · 02-02-2006, 01:39 PM

Not directly related but closely followed, research house Matrix Investment Research downgraded Palm from "Buy" to "Hold" today and sent the following note to their clients:

PALM's performance remains strong and should continue with the strength of Treo sales and the good acceptance of the new Windows Mobile based Treo but current valuation is starting to fully reflect this and near term, gains in the stock price may be limited with the lack of any other near term catalyst.
PRVit Value drivers remain strong but now are fully valued relative to PALM's Value Score
EVA Momentum at 5.3% is very strong.
PALM has a very strong balance sheet with $8.09 in Excess Cash per Share and no debt.
PALM is trading at a very small 12% discount to our intrinsic value calculation of $44.00 per share. The EV/EBITDAR multiple of 16.3X is 25% above the sector mean of 13X.
We feel the recent run up in share price represents a good opportunity to take profits.
Downgrade From Buy to Hold.

02-02-2006, 01:39 PM	#2
Alexander Turcic Fully Converged Posts: 18,175 Karma: 14021202 Join Date: Oct 2002 Location: Switzerland Device: Too many to count here.	Not directly related but closely followed, research house Matrix Investment Research downgraded Palm from "Buy" to "Hold" today and sent the following note to their clients: PALM's performance remains strong and should continue with the strength of Treo sales and the good acceptance of the new Windows Mobile based Treo but current valuation is starting to fully reflect this and near term, gains in the stock price may be limited with the lack of any other near term catalyst. PRVit Value drivers remain strong but now are fully valued relative to PALM's Value Score EVA Momentum at 5.3% is very strong. PALM has a very strong balance sheet with $8.09 in Excess Cash per Share and no debt. PALM is trading at a very small 12% discount to our intrinsic value calculation of $44.00 per share. The EV/EBITDAR multiple of 16.3X is 25% above the sector mean of 13X. We feel the recent run up in share price represents a good opportunity to take profits. Downgrade From Buy to Hold.