Q: Thanks for all your good insight. I have a good position on NEO purchasing it at $10. Sold 20% of my holdings at the high this morning but wondering how high this stock may go. What is the potential for UCU. I just purchased it recently and wonder if it has the potential of NEO.
5i Research Answer:
NEO is 21x earnings. The average target is $39.52. Under good market conditions, we think that is a reasonable outlook but without accelerating earnings that would be an expensive multiple at that point. UCU has potential, but it is not yet producing so in the short term it will move with the sector and specific company news more than anything else. Average target is above $14, which seems a bit too aggressive to us. But, the sector is crucial and we think the sector outlook remains good.