I'm not sure about you but I smell something very fishy about the recent price action in Diamond Management & Technology (DTPI) and its acquisition by PriceWaterhouse at $12.50 on August 24th.
You might remember we carried Diamond in the Barchart Van Meerten Speculative portfolio for some time but sold it from the portfolio on August 8th at 9.73 after some really crazy and unexplained price action. The stock was in a trading range around 11 a share when after a pretty normal earnings call on August 4th the stock took an unexplained nose dive from around 11 all the way down to 8.33 in just an hour.
Although the stock recovered in the next few days it continued to trade in the 9.29 to 10.29 range but kept trending downward settling in around 9.50. The stock normally traded between 100K and 200K shares a day. I never could find any reason for the stock to drop and there was no negative press to cause it to keep trending lower.
All of a sudden out of nowhere PriceWaterhouse offers an all cash deal at $12.50 which was an almost 32% premium of the 9.50 price and in a matter of minutes 19+ million shares are traded.
Normal earnings calls do not cause a stock to drop 25% in an hour and then settle lower each day until acquired with a hefty premium.
A lot of people lost money by selling out between August 4th and the buyout announcement on August 24th. If you were one of them you have every right to file an SEC complaint that you feel the stock was manipulated.
Jim Van Meerten is an investor who writes on investing here and on Barchart Portfolio Blogs. Please leave a comment below or email JimVanMeerten@gmail.com.
Disclosure: No positions in the stock mentioned at the time of publication
Showing posts with label DTPI. Show all posts
Showing posts with label DTPI. Show all posts
Wednesday, August 25, 2010
Friday, June 4, 2010
A Diamond in the rough - Diamond Management
On Financial Tides we've covered this stock before but Diamond Management and Technology Consultants ( DTPI ) just keeps popping up on my new high list. They are a global management consulting firm that helps leading organizations develop and implement growth strategies, improve operations, and capitalize on technology. Mobilizing multidisciplinary teams from highly skilled strategy, technology, and operations professionals worldwide. Diamond works collaboratively with clients, unleashing the power within their own organizations to achieve sustainable business advantage. They are headquartered in Chicago, with offices across Europe, North America, and South America.
The recent and consistent price momentum deserves a new look. The stock continued to hit 12 new highs in the last 20 trading sessions including 4 in the last 5 days. The stock appreciated 21.05% compared to a loss in the Value Line Index of 8.54%. I use the Value Line Index as my benchmark because it contains 1700 stocks making it broader than the S&P 500 or much narrower Dow 30. Barchart's technical indicators have 12 buy signals out of a possible 13 giving this stock a 96% technical buy score. It trades around 10.40 with a 50 day moving average of 8.73.
Price movement without increases in sales and earnings is meaningless and Wall Street analysts think the company will increase sales 22.40% this year and 12.90% next year. Increases in earnings per share are also forecasted to be a 22.70% increase this year, 22.20% next year and 17.50% a year for the next 5 years. I like double digit estimates of sales and earnings increases. Wall Street has published 4 strong buy recommendations.
The stock has a very positive following on Motley Fool with the CAPS members voting that the stock will beat the market 149 to 4. The more experienced All Stars agree 53 to 1.
This stock continues to ring my bell and I still think it's not too late to get in. The positive points are:
The recent and consistent price momentum deserves a new look. The stock continued to hit 12 new highs in the last 20 trading sessions including 4 in the last 5 days. The stock appreciated 21.05% compared to a loss in the Value Line Index of 8.54%. I use the Value Line Index as my benchmark because it contains 1700 stocks making it broader than the S&P 500 or much narrower Dow 30. Barchart's technical indicators have 12 buy signals out of a possible 13 giving this stock a 96% technical buy score. It trades around 10.40 with a 50 day moving average of 8.73.
Price movement without increases in sales and earnings is meaningless and Wall Street analysts think the company will increase sales 22.40% this year and 12.90% next year. Increases in earnings per share are also forecasted to be a 22.70% increase this year, 22.20% next year and 17.50% a year for the next 5 years. I like double digit estimates of sales and earnings increases. Wall Street has published 4 strong buy recommendations.
The stock has a very positive following on Motley Fool with the CAPS members voting that the stock will beat the market 149 to 4. The more experienced All Stars agree 53 to 1.
This stock continues to ring my bell and I still think it's not too late to get in. The positive points are:
- Recent and consistent upward price appreciation
- Barchart technical buy signal of 96%
- Wall Street forecasting double digit increases in sales and earnings
- A very positive investor sentiment
Jim Van Meerten is an investor who writes on financial matters on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com
Disclosure: No position in DTPI at the time of publication
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