Update on ARC stock

This is an update on previous posts about ARC's stock.

In one of my previous posts, I suggested that there are at least two ways to make money in the reprographics business: (1) earn money from owning a profitable reprographics company, (2) earn money by owning a piece of another reprographics company (if you buy low and sell for more than you paid for it, of course.) In another previous post, when ARC’s stock price was at $2.68 per share, I said “it does feel like ARC’s stock is definitely undervalued.”

For anyone who bought 20,000 shares of ARC stock (NYSE: ARP) when ARC fell to $2.54 per share, which happened several weeks ago, those 20,000 shares, at the price per-share ARC closed at ($8.15) on Friday May 8th, were worth $112,200 more. (Investment $50,800, Value $163,000, Increase in value $112,200.)

How much did your reprographics company earn you in the past two months? Would you have earned more than that had you bought ARC at $2.54 per share?

Never ceases to amaze me how the stock market works. ARC reported, on Thursday this past week, that its Sales were off around 25%, Q1 2008 vs. Q1 2009. And, in spite of that, ARC's stock price surged well ahead of where the stock has been trading this year. Does that mean that investors believe that the worst is over?