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Investing

Newpark Resources (NR) – Read the Article Not the Chart

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By Douglas A. McIntyre Published
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Submitted by CrossProfit

It is amazing how many investors glance at charts in articles and don’t bother to read the text. What at first glance appeared to be a Motley Fool pump for NR in the chart of this article(http://www.fool.com/news/commentary/2006/commentary06120723.htm) is actually a due diligence advisory.

Read the text: “And Robert Olstein owns shares of Newpark Resources. While these are things to like about each of these stocks, it should be said, and so I’m saying it, that these are not recommendations. Instead, they’re ideas that CAPS has generated, which I’m offering up in the name of further research.”

NR is trading at a PE of 36+ compared with 19 for the rest of its peer group. Even if somehow NR manages spectacular Q4 earnings of $0.20 per share (instead of $0.09) this would still yield a PE of 23. In other words if NR beats the street consensus by 110% it is still trading at a premium to its peers! The Yahoo Finance forward PE of 14.5 is a typo.

NR is up – not down – over 15% since the Fool article appeared! You would think that investors would know how to read.

Disclosure: CrossProfit associates have profited from short positions in NR in the recent past and may open new positions today.

http://www.crossprofit.com

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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