Purple Chips by John Schwinghamer

Author:John Schwinghamer
Language: eng
Format: epub
Publisher: Wiley
Published: 2012-03-28T04:00:00+00:00

One month later, in exhibit 4.6, HCBK is still hovering between $9 and $10, and the impact of the latest quarterly release is clearly visible as a break in the upward trend.

Exhibit 4.6 Hudson City Bank (HCBK, April 2011)

In exhibit 4.7 we can see that it often takes a few months for the impact of a significant change in earnings to be reflected in the price of a stock. By November 2011, the stock price of HCBK had fallen below $6.

Exhibit 4.7 Hudson City Bank (HCBK, November 2011)

Once a scenario occurs like the one above, where the earnings trend changes dramatically, the affected company is removed from the list of Purple Chips until it shows seven years of consistent, profitable growth in EPS. Purple Chips is based on trust and dependability, and such a company no longer satisfies these criteria.

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