Q: I’ve heard and read comments that Constellation’s precipitous drop is fuelled by sentiment.
Would the same not be true of its climb?
In retrospect would you say that the $5000 price was overvalued? Was it ever worth that much? What ever “worth” means. Or were investors just chasing the latest thing.
On a positive note, I now no longer have to sell some to rebalance.
Would the same not be true of its climb?
In retrospect would you say that the $5000 price was overvalued? Was it ever worth that much? What ever “worth” means. Or were investors just chasing the latest thing.
On a positive note, I now no longer have to sell some to rebalance.
5i Research Answer:
No, we would not say the same. During the period of 2014 to 2024, CSU's earnings per share rose from $5.17 to $41.45. This big increase in earnings was accompanied by a higher valuation multiple, but the stock move was fundamentally-driven. Looking at consensus estimates, EPS in 2024 ($41.45) is expected to be $67.85 for 2025 when released and $87.44 for 2027. EPS (at least as forecast) is still expected to rise nicely, yet sentiment has cut the stock in half. At $5,000 it was 'expensive' but justified based on its huge growth and non-dilution (no new shares ever issued).