TheKnot.com (KNOT) reported earnings this week and they were good. I mean really good. However, analysts were expecting higher sales based on the Wedding Channel acquisition from last year and the numbers were soft in that area. Internet companies are only as big as their sales and considering the stock's huge run this last year (over 100%), a pull back on the faintest of disappointment was inevitable.
For those who remember, I had recommended KNOT back in summer of last year around the $16-$17 level, and recommended profit taking around $28 a couple of months back. While the stock advanced into the low thirties this year, this pull back vindicates my move to sell. While the stock still remains a take-over candidate, the market looks a little weak - specially Internet. This stock will probably see $22 before $30. On a pull back to $22, I might considering buying, but it depends on how the rest of the market and sector is behaving.
-- Faisal Laljee
Full Disclosure: I do not own shares of KNOT but my position might change anytime without notice.