Ann: Profit Guidance, page-9

The EPS market guidance of 20 July was exactly as I predicted in my post of January 2017 (9.0 cents). I say this not to brag, as it is rare that I can predict future profits to that accuracy. I re-post this as it confirms all of the other points I made in January if 9.0 cents EPS was reached.

Since I bought in four years ago, the share price has more than quadrupled. During that time there was a stagnant period of over 18 months when the price went nowhere. It is that kind of stock. The number of shares outstanding has decreased during that four years as well, as surplus cash has been well reinvested in share buybacks. Great for the long term holders. Also, IMO, the earnings seem to be accelerating more now than at any other time since I bought in. This augers well for the next few years.

The share price behaviour this month is so typical. Rockets up on what appears to be a great result, and then settles back as most investors realise that the market was probably predicting the great result before the announcement. So there is no need to fret about the pull back in share price over the last 10 days. It is still on a P/E of around 25, appropriate for a stock appreciating EPS at the rate OCL is able to achieve.