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Money Morning's oversold stock pick of the week is digital display maker Planar Systems Inc. (Nasdaq: PLNR).
Sometimes stocks get beaten down unfairly - but they're actually a great value. The share-price dip then gives investors an amazing entry point into a good long-term investment.
Money Morning Defense & Tech Specialist Michael Robinson likes Planar stock despite its recent downturn. He's convinced the 33% drop in PLNR stock over the past few months is just an overreaction to some minor bad news.
Planar Systems: About the Company
Three employees of Tektronix, Inc. founded Planar Systems Inc. in 1983 in Beaverton, Ore. PLNR became a publicly traded stock in 1993. Since it started, Planar has bought more than half a dozen businesses to broaden its offerings and acquire new display technologies. Planar has focused on high-end commercial displays such as public signage. It also makes rear-projection cubes, touchscreens, and desktop monitors. The company serves a diverse group of markets, including medical, space, security, transportation, retail, and government. Planar operates globally with offices in Asia and Europe as well as North America. PLNR has a market cap of $139 million. The company employs about 300 people.
Planar Stock: Why It's Oversold
Planar stock had an incredible run last year. By Dec. 29, it had soared nearly 145%. So when PLNR stock started to slide, much of the selling probably was due to profit-taking. There was also concern over a report that Planar insiders had sold 31% of their stock. But the situation got worse on Feb. 4 after the company reported earnings. Planar beat expectations on income. But the company had a slight miss on revenue even though it grew 38% year over year. And perhaps of most concern to Wall Street, Planar forecast slower growth in its guidance. That was enough to knock 17% off PLNR stock in one day. A stock downgrade that same day from Zacks Investment Research from "outperform" to "neutral" was not helpful.
"Planar underscores a trend I've seen in this choppy market," Robinson said. "Even a hint of a slight decline in growth and Wall Street goes crazy."
Here's why the rush to dump Planar stock was premature...
About the Author
David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.