This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Bill Gunderson's Radio Play of the Day: My Favorite Drone Stock

Although I love strong stock charts and superior performance, I also worry about valuation. I have had valuation paranoia ever since the dot.com bubble. What do I have to pay for this maker of drone parts?

Data from Best Stocks Now App

With a forward PE ratio of 18.8 and an estimated five-year growth rate of 15% per year, I am currently paying a slight premium to the growth rate. The PEG ratio comes in at 1.25. It's hard to ignore that chart and performance, however.

When I calculate a five-year earnings estimate and apply a reasonable multiple, I come up with a target price that is about 75% higher than where the stock trades today. Not bad, but I like 80%-100% upside potential.

It is hard to argue with that chart and performance, however.

Transidgm is a mid-cap stock that is headquartered in the drone capital of the world, Cleveland, Ohio. I wonder if the Patriots will have any drones flying over the Browns' football practices this coming year?

Data from Best Stocks Now App

I like mid-cap stocks right now. Not only are equities a leading asset class, but domestic mid-caps in particular are a very good place to be.

Data from Best Stocks Now App

When I weigh it all out in my mind and apply my formulas to the chart, the performance and the valuation, I come up with a stock that earns a grade of "A" and ranks #72 out of 3,278 stocks. At the current time, clients at Gunderson Capital Mgt. have no position in the stock.

I have my antenna up, however!

Data from Best Stocks Now App

This article was written by an independent contributor, separate from TheStreet's regular news coverage.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
TDG $226.30 2.98%
AAPL $121.30 -0.87%
FB $94.01 -1.26%
GOOG $625.61 -1.10%
TSLA $266.15 -0.24%

Markets

Chart of I:DJI
DOW 17,689.86 -56.12 -0.32%
S&P 500 2,103.84 -4.79 -0.23%
NASDAQ 5,128.2810 -0.5040 -0.01%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs