To the dismay of those who abhor repetition, LCA-Vision (LCAV) has gotten a lot of airtime on this site as a potentially undervalued stock. But finally, that potential has manifested itself into reality, as LCAV has nearly tripled in price from when we first jumped on its scent some 10 months ago.
For those who have grown tired of hearing us rave about this stock, your day has come. At the price it hit last week, LCAV will no longer be brought up as a stock with value potential; instead, it gets moved to the “Value In Action” page, where examples of stocks that go from under appreciated to reasonably appreciated reside!
LCAV’s price appreciation did not follow a linear ascent, however. LCAV would fall to just $2 per share in March, a full 33% below the $3 it was when we first discussed it as a potential value play. But despite the price drop, the value had remained steady: the cash balance was preserved and was higher than the company’s market value, the competition was shutting its doors, and the company was cutting its costs. As such, despite the drop in price, the company offered downside protection to investors in the form of its assets.
As consumer confidence returned however (and demand for LCAV’s service is related to consumer confidence), investor sentiment has shifted. The stock is up 100% in the last 3 months, and is at a level where the upside has been decidedly reduced. As such, it now appears to be a good time to cash out and hunt for the next potential value investments.
Disclosure: None
