On October 8, 2014, when GoPro (GPRO) was trading at $89.93, we said the stock had a conservative downside target of $68.93 and an extreme downside target of $31.28. On December 23, 2014, after falling to the mid-range target of $45.50, we thought that the rout in the stock was over, for the most part. Although we thought that there was resistance at the $60 level, we figured an investment from the December 23rd level was acceptable with only a portion of the intended investable funds. We suggested “…putting only ¾ of the intended amount into GPRO with the remaining ¼ for the ‘unlikely’ event of falling to $31.28.”
Unfortunately, GPRO was never able to sustain the initial $60 level and fell as low as $37 before making a discernable rebound. It was from this level ($37), that GPRO did make a surge to $65. However, the $65 level was not to last as GPRO declined to the extreme downside target that was indicated as early as October 2014.
Now that GPRO has declined to the extreme downside target, a cursory review of Value Line Investment Survey is in order. Based on the October 2015 Value Line, GPRO is short on meaningful data. However, the analyst for Value Line has the following thoughts:
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Sales are surging
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costs and expenses are declining
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Bottom line figures are now in the positive
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2015 earnings have been increased
The analyst for Value Line has the closing remark that “…the recent price correction may afford risk-tolerant accounts an attractive entry point…” At the current price, we can’t argue about attractiveness but the future risks are the only concern.