SNPS

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I hold SNPS at a 2.01% weighting in the total portfolio.
And in the US only portfolio, SNPS weighting is 5.04%. The other two individual portfolios are Income and Balance.
SNPS has risen quickly lately….and my reading it is related to AI as its “software automates the chip design process, enhancing design accuracy, productivity, and complexity in a full-flow end-to-end solution”
But there is chatter that the current price, $449, and the fair value might be as low as $310.
Question for me….do I trim back or just ride this out??……..What says StockTrade???…….Thanks for your insight…………..Tom

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Asked on June 6, 2023 4:12 pm
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Hey Tom. You are correct in the fact that this company is relatively overvalued on pretty much all metrics. The AI craze is certainly something that is taking over and any company that has any exposure to the area has skyrocketed in value.

To me, the company's prospective growth just doesn't justify its current valuation. However, it's not like it is egregiously overvalued. It's trading at a pretty hefty premium on all fronts and it will have to put up some big numbers to justify these valuations. However, I'm not necessarily sure I'd be looking to exit either. AI stocks can run up much more than they currently sit at, there's no question about it.

Have you ever considering a trailing stop limit order to get the best of both worlds? You participate in any further upside, and can shield yourself from downside potential by placing a price you'd like to sell the shares at, one that automatically adjusts if the stock continues to go up. Trailing stop losses are what I typically put on companies I feel are valued a bit too high but don't want to quite exit my position yet.

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Posted by Dan Kent
Answered on June 9, 2023 3:21 pm