This disparity, a falling stock price in a growing company, spells opportunity. The company's fiscal year ends at the end of January. In February, we will find out how well Borders did in the fourth quarter. Borders blew away the third-quarter estimates. As a result, Wall Street is raising its earnings estimates for future quarters.
Borders is a perfect example of what value investing is all about.
We buy stocks when they are down and when Wall Street's expectations for the company are dismal. Then, when expectations rise, the stock delivers extraordinary gains in our portfolio. Borders' new CEO, Greg Josefowicz, has his work cut out for him, but he also has a great company and a big opportunity. The challenge is the Internet. When it comes to books, buyers usually go where the price is lowest.