Perception And Pricing

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valueplays
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“Davidson” submits:

See 2017 Hedge Fund Letters.

Knowing that prices are reflections of market expectations of the future, do you trust the market perception of anticipated underlying financial performance of IRTC over GIS?

IRTC is ~15 x Revenue which is a wild price to pay for anything without a business history (same for TSLA) and has a negative Cash Flow, negative Net Inc

GIS is ~1.6x Revenues, carries ~10 Price/Earnings(real Net Income), more than 4% Dividend and an extensive business history working through periods like the current one in which sales slowed. Also a large factor of slowing sales is US$ strength due to global political fears which is now reversing.

Momentum Investors are trusting the price-trend and favor IRTC.

Irhythm Technologies vs General Mills - Perception And Pricing
Value Investors like myself who know how to value the businesses behind the price will favor GIS. I own GIS.

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Todd Sullivan is a Massachusetts-based value investor and a General Partner in Rand Strategic Partners. He looks for investments he believes are selling for a discount to their intrinsic value given their current situation and future prospects. He holds them until that value is realized or the fundamentals change in a way that no longer support his thesis. His blog features his various ideas and commentary and he updates readers on their progress in a timely fashion. His commentary has been seen in the online versions of the Wall St. Journal, New York Times, CNN Money, Business Week, Crain’s NY, Kiplingers and other publications. He has also appeared on Fox Business News & Fox News and is a RealMoney.com contributor. His commentary on Starbucks during 2008 was recently quoted by its Founder Howard Schultz in his recent book “Onward”. In 2011 he was asked to present an investment idea at Bill Ackman’s “Harbor Investment Conference”.

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