You own 100 shares of ABC Pizza (ticker: ABC). This company makes pizzas that have the ingredients arranged to spell out words of your choice. Yes, it's a goofy idea, but they make good pizzas. You bought them 5 years ago for an average price of $25.00 per share. You have $2,000 and you are considering investing some more as well. However, the share price for ABC has dropped from $31.00 to $26.00 in the last 3 months. With the recent decrease in price, the PE ratio is a bit lower than it normally has been. You do some research but you can't seem to find out any real reason why the stock's price has dropped recently. Sales are consitently growing. Expenses are growing but represent the same percentage of sales. You are wondering if the share price might go back up in the near future. In this scenario, you have 5 choices.
The current share price is $26.00 (Click on the appropriate link below and see what happens next. A new window will open up.)