How to Re-Enter a Runaway Stock Without Chasing It?

One of the biggest mistakes retail investors make: seeing a stock that's already run up hard, and buying anyway out of FOMO. Here's a smarter approach, using a real example from this very sector. The Azad Engineering story: January 2024: P/E ratio around 14x Mid-2024: spiked all the way to nearly 150x as the stock ran up sharply Dec 2025-Jan 2026: corrected back down to 78-80x, well below its own median From that low point: The stock's next leg up began The lesson: The stock didn't need to hit a new low to become attractive again, it just needed to correct meaningfully from its own euphoric peak back toward its historical median valuation range. How to apply this practically: 1. Track the stock's own historical P/E range, not just today's price. A stock with a 5 year median P/E of 100x trading at 150x is stretched; the same stock at 78x is in a very different zone. 2. Don't buy the spike, buy the retracement toward the median. Chasing a stock right after a sharp run-up means buying at the most expensive point in its own history. 3. Confirm the business hasn't changed, only the price has. A valid re-entry needs the underlying growth story intact, check recent order wins, revenue growth, and margins before assuming a price dip is a buying opportunity. The Takeaway: In high-growth, high volatility sectors like Precision Engineering, patience with valuation matters as much as conviction in the story.