3SOF

Hi :)

I would like you to give me suggestions of stocks to analyze. Just write the ticker symbol as a reply to this thread, or if you want to, provide additional information.

I'll go making the analysis, one per trading day, looking to know more and more stocks and therefore finding investment opportunities.

Today I'm going to write (or make a video) on MCZ because la-onda had requested this one a few days ago and I'm interested in taking another look at it.

Thanks :)

BMRN

CNXT please. Thanks.

DUK,if you please. No hurry,i'm in this long term.

SHSN

HMSY please.

I chatted with Ramsburg the other day, and the chart looks bullish.

(http://selfinvestors.com/tradingstocks/uploads/Image/9607_hmsy.gif)

Jacky

1. Profile

Mad Catz Interactive, Inc. (MCZ), together with its subsidiaries, engages in the design, manufacture, marketing, and distribution of accessories for video game platforms in the United States. Its products include video game controllers and accessories, such as control pads, steering wheels, joysticks, memory cards, video cables, light guns, dance pads, microphones, car adapters, and carry cases. The company also markets game enhancement software and publishes video games. Mad Catz Interactive markets its products in the United States, Canada, and Europe. The company was founded in 1989.

2. Stock Price History
2.1. Chart since IPO

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40245;image)

I guess there's some anomaly in this chart back in 1999, since in stockcharts.com I see the company's IPO at around $3.5 in November 1999.

MCZ fell 90% from the early 2000 high of $3.5 to the April 2001 low of $0.30. Then a recovery began which took the stock to a high of $1.98 in August 2001 (a 560% advance in just 4 months). It's interesting to note that the company's fundamentals justified these wild moves, because revenue shrank from $72 M in 2000 to $55 M in 2001. Then it rebounded to $85 M in fiscal 2002 (which started in April 2001) and the company returned a $0.02 EPS for the year. The stock price moved as expectations changed.

But then the market thought that a $1.98 stock price was too high for just $0.02 in EPS (the P/E ratio was 99) and the stock fell back down to a low of $0.43 in early 2003 (here the P/E was a more normal 21.5). Then another recovery phase and another dip back down to values below $0.5.

The 2nd big advance phase began in mid 2004 and lasted until early 2005. This was a 325% rise. Again, it was fully justified by the fundamental landscape, because EPS rose from $0.02 in 2004 to $0.08 in fiscal 2005 (which ended in March 2005). However, because the company couldn't sustain profits and indeed posted a ($0.12) loss per share in fiscal 2006, the stock fell 84% to $0.30, its all time low. This was in August 2006.

Now, one year later, MCZ closed at $0.99. The company reported EPS of $0.07 in fiscal 2007, so the trailing P/E is 14, which is moderately attractive.

2.2. Short term chart

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40246;image)

In mid May, 2007, MCZ started a meaningful 100% plus rally. There weren't any news to justify the change, I guess it was just that the stock was too cheap. Earnings were out on August 14 and the market wasn't particularly interested, even though they were positive from a gross margin basis, as the company achieved a record 32% gross margin. Sales were down 19.6%, as expected.

I view the results as positive because MCZ's problem isn't the level of sales, but its low margins. The company is now a $55 M market cap company.

Technically, as we look at the chart since the IPO, it sure looks like another cyclical downturn is happening that will only stop, as usual, at around $0.30. However the short term chart shows support at the 200 days SMA.

3. Fundamental Analysis

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40247;image)

As you probably know my valuation model has 4 variables, which are the white lines, the yellow lines are known facts and the dark yellow lines are calculated automatically by Excel.

1) Dilution Factor

Historically, and for the past three years (http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?Symbol=mcz&lstStatement=10YearSummary&stmtView=Ann), there wasn't any share count increase in MCZ, so I considered just 1% as the dilution factor (1.01 on the model).

2) Revenue CAGR

Since revenue in the fiscal 1st quarter of 2008 fell 19.6% from the year ago levels, I think revenues will be about 15 - 20% lower three years from now than what they were in fiscal 2007. This means fiscal 2010 revenue of about $85 M and 0.95 as revenue CAGR in the valuation model.

3) Net Profit Margin

Net profit margin was 3.7% in fiscal 2007 and I expect it to expand to about 7% over the long term. I don't think MCZ has a business model that will bring it more than 10% net profit margin, there's intense competition in its space and it has no pricing power. Except perhaps for the its new product, the Hybrid Earphones, but they will be selling for such a high price ($99.99), I don't know if there will be strong demand for them. It's an open question.

4) EPS multiple estimate

Here I put the Toys & Games industry average P/E, which is 17.9 (http://finance.yahoo.com/q/co?s=MCZ).

5. Conclusion

The valuation model results tell me MCZ is undervalued, but not extremely attractive, with an expected share price CAGR of 25%. The optimal selling price (the price at which the share price CAGR falls below 16%) given by my valuation model is $1.25, that is, about 26% higher than the current share price, which is attractive, but not enough to buy for a concentrated portfolio like the Main.

Overall I think this stock moves wildly with changes in EPS, but I don't see EPS growing much more than the $0.07 the company reported in 2007, unless there's a fundamental change of some kind, like truly innovative products. The hybrid earphone is a good promise, but I would wait to see if it sells or not. As for the rest of the product portfolio ... I don't find it particularly interesting.

My current opinion on MCZ is moderately positive. Good luck if you own it and please let me know if there's new, relevant, information.

Tomorrow I'll write about BMRN, requested by Capricho.

It's been a while since INSM was hit on before... INSMED has come a long way since those last discussions, all speculation of how the court case would go is now behind them. Test Phases are soon to be bringing new speculative excitement on several fronts, ROP, HARS, MMD, ALS, FOB... 

9 NEW positions, 15 INCREASED positions, and only 3 sold out is a complete turnaround in institutional sentiment...
http://www.nasdaq.com/asp/Holdings.asp?F...

How about AVCI, looks like a good one for long-term hold.

Quote from: capricho on September 10, 2007, 09:13:14 AM
BMRN

1. Profile

BioMarin Pharmaceutical, Inc. (BMRN) develops and commercializes biopharmaceuticals for serious diseases and medical conditions. The company's product portfolio comprised of approved products and various investigational product candidates. Approved products include Naglazyme (galsulfase), a recombinant form of N-acetylgalactosamine 4-sulfatase enzyme used for the treatment of genetic disease called mucopolysaccharidosis VI; and Aldurazyme that is used for the treatment of mucopolysaccharidosis I caused by the deficiency of a lysosomal enzyme called alpha-L-iduronidase. It also develops various investigational product candidates for the treatment of genetic diseases, including Kuvan (sapropterin dihydrochloride), formerly referred to as Phenoptin, a proprietary oral form of tetrahydrobiopterin (6R-BH4 or BH4), for the treatment of Phenylketonuria (PKU); and Phenylase (phenylalanine ammonia lyase), an enzyme substitution therapy for the treatment of phenylketonurics, who are not 6R-BH4 responsive. Further, BioMarin Pharmaceutical evaluates preclinical development of various other enzyme product candidates for genetic and other diseases, as well as an immune tolerance platform technology to overcome limitations associated with the delivery of existing pharmaceuticals. The company also holds rights to receive payments and royalties related to Orapred (prednisolone sodium phosphate) and Orapred ODT (prednisolone sodium phosphate orally disintegrating tablets) subsequent to the sublicense of North American rights. It sells its products to specialty pharmacies, hospitals acting as retailers, and pharmaceutical wholesalers in the United States, Japan, and European Union. BioMarin Pharmaceutical, Inc. has strategic alliance with Merck Serono. The company was founded in 1996 and is headquartered in Novato, California.

2. Stock price history since IPO

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40271;image)

BMRN's IPO was back in 1999 and the stock debuted at $15. Today it stands at $22.23, a 48% rise in about eight years. However, the company's value, given by the market cap, increased a lot more than that, because the share count rose every year (the numbers in red below the price chart are the share count - in millions).

In 1999 the market cap was $15*35 M = $525 M. Today it is $22.23*96 M = $2.13 B, that is, 306% more than in 1999.

This is just for us to understand what dilution makes to returns over the long term.

BMRN being a biotechnology company with dilutive habits I would reject it right away, but I must say that generally I dislike the biotech sector (also because I don't know how to value it well). But let me try to take a look at BMRN with an open mind.

The rise on point 1 was due to the late 1999, early 2000 technology bubble. Back then the company had $12 M in annual revenue and $37 M in losses. The bubble collapsed and BMRN fell 91% on phase 2 on the chart. Phase 3 was a 283% rebound in about a year. I don't see any fundamental reason for this rise, other than the stock had been down 90% plus previously. Because there wasn't a fundamental back up BMRN fell back down in phase 4, to a low of $3.88 in November 2004. That was the low, the stock rose ever since ...

2.1. Medium term chart

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40272;image)

I see revenues rising and losses diminishing quarter after quarter. Here are analysts expectations for the current year and 2008:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40273;image)

So, we're talking about $0.36 EPS estimate for 2008. This means the forward earnings multiple is 62. I don't understand this valuation, I think it is absurd, like I do for most biotechnology companies, I'm sorry.

3. Conclusion

Perhaps BMRN's pipeline of new drugs, or existing drug's potential justifies this kind of valuation, but I don't have enough knowledge to value that.

I try to avoid businesses I don't understand, especially if the company is a "diluter".

My overall opinion on BMRN is negative, even though I recognize it is made out of insufficient knowledge. Good luck if you know it well and own it :)

Tomorrow I'll write about CNXT, requested by sfhappyfish88. Thanks for your suggestions :)

Quote from: sfhappyfish88 on September 10, 2007, 09:17:07 AM
CNXT please. Thanks.

1. Profile

Conexant Systems, Inc. (CNXT) designs, develops, and sells semiconductor system solutions for broadband communications worldwide. It offers semiconductor devices, software, and reference designs for use in broadband communications applications that enable high-speed transmission, processing, and distribution of audio, video, voice, and data to homes and business enterprises. The company's broadband access products include digital subscriber line products comprising digital signal processors, network or communication processors, integrated software on silicon, analog front-end chips, line drivers, and reference design guides. Its broadband media processing products comprise various broadcast audio and video decoder and encoder devices, as well as front-end communications components that capture, display, storage, playback, and transfer of audio and video content in digital home and small office products, such as personal computers, television set-top boxes, gaming consoles, personal video recorders, and digital versatile disk applications. The company offers universal access products, including analog modem chipsets that connects users to the Internet through their desktop and notebook personal computers; and dial-up modem chipset, which include mixed-signal intensive, controllerless modem chipsets, and software modem solutions. Its wireless networking products comprise radio frequency transceivers, analog base-band integrated circuits, digital base-band and media access controller chips, and reference design guides. The company sells its semiconductor products and system solutions directly to original equipment manufacturers of communication electronics products; indirectly through electronic components distributors; and to third-party electronic manufacturing service providers. It operates in North America, South America, Europe, Africa, the Asia-Pacific region, and the Middle East. The company was founded in 1996 and is headquartered in Newport Beach, California.

2. Stock price history

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40301;image)

Nobody would thought, from just reading the profile of the company, that the chart since the IPO would look like the above.

I identify two major phases in CNXT, the run up of the technology bubble and the subsequent collapse. This is one of those stocks that never recovered ...

Fundamentally the company had $2.1 B in revenues in 2000 and just $970 M in 2006, so business declined over the years (even though it was up from a 2003 low of $599 M in revenues).

The company lost $2.4 B over the last five years, gee :o

2.1. Short term chart

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40302;image)

Phase 1 happened because CNXT posted three quarters in a row of positive EBITDA (starting in Q2 2006) and even managed to show a very small positive net income number in Q4 2006.

It looked like the company was turning profitable ... but this was a turnaround that failed and Q1 and Q2 in 2007 showed sharp losses, again. So the stock came off to where it was before the run up.

Analysts expect revenues to decline and more losses in 2007 and 2008:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40303;image)

And who am I to say it's going to be different? Or, putting it in another way, what do I know about the company that gives me confidence that analysts' negative outlook is wrong? I know nothing.

The stock recently got a boost because the company changed its CFO to one which previously worked with FSL, which was acquired by BlackStone, so I guess that fueled some speculation she'll come to work on a sale of the company. This is hardly a sound fundamental reason to start an advance phase.

3. Conclusion

CNXT is currently a $670 M market cap company which lost $2.4 B over the past five years. Revenues are expected to shrink after a rebound in 2005 and 2006, to about 35% of what they were back in 2000, so this company isn't able to grow.

Even if it somehow turns profitable, I believe its margins will always be slim.

I guess shappyfish88 owns the stock, or is interested in it, so I hope I'm wrong, but I don't see anything that attracts me in CNXT.

Tomorrow I'll write about DUK on soxguy's request.

hi David,
please check IMOS again:
http://www.3stocksonfire.org/trading/index.php?board=2.0
(updated informations: http://www.3stocksonfire.org/trading/index.php?board=2.0 )

AKNS now on the Nasdaq!
please check AKNS instead of IMOS!
http://www.3stocksonfire.org/trading/index.php?topic=10250.msg106017#msg106017

thanks
Oliver

WRLS...looks very attractive with latest guidance update. ;D

David,
Could you pls relook at LAYN? Its done pretty nicely for me since we last discussed it..i think it goes higher..

http://www.3stocksonfire.org/trading/index.php?topic=9240.0


Thanks,
Nick

Hi David don't post here too often but always checking for stocks... Great job on your analysis, if you could can you do an analysis on CREE ? thanks

Hi David,

thank you for your great analysis: can you check IOM if you have time?

Thanks,

A.

Morning David, or in your case, good afternoon!

FSTR please.

thanks.

Quote from: ygtrdr on September 17, 2007, 09:39:21 AM
Morning David, or in your case, good afternoon!

FSTR please.

thanks.

FSTR - good one. I'm holding some.

SIMC - trading at a forward P/E of about 8 and a P/S of less than 0.5.

Quote from: soxguy on September 10, 2007, 09:37:34 AM
DUK,if you please. No hurry,i'm in this long term.

1. Profile

Duke Energy Corporation (DUK), together with its subsidiaries, engages in the natural gas and electric businesses in the Americas. The company operates in six divisions: Franchised Electric, Natural Gas Transmission, Field Services, Duke Energy North America (DENA), International Energy, and Crescent Resources. The Franchised Electric division generates, transmits, distributes, and sells electricity in central and western North Carolina and western South Carolina. The Natural Gas Transmission division provides transportation and storage of natural gas in the eastern and southeastern United States, and in Ontario and British Columbia, Canada. This division also provides natural gas sales and distribution service to retail customers in Ontario; natural gas gathering and processing services to customers in western Canada; and other energy-related services. The Field Services division gathers, compresses, treats, processes, transports, markets, and stores natural gas; and fractionates, transports, markets, and stores natural gas liquids. The DENA division operates and manages power plants, and markets electric power and natural gas in the United States and Canada. The International Energy division operates and manages power generation facilities, and sells and markets electric power and natural gas. The Crescent Resources division develops and manages commercial, residential, and multifamily real estate projects primarily in the southeastern and southwestern United States. In addition, Duke Energy owns and operates a fiber optic communications network in the Carolinas serving wireless, local, and long distance communications companies; Internet service providers; and other businesses and organizations. The company also provides insurance and reinsurance of various business risks and losses. Duke Energy was founded 1916 and is headquartered in Charlotte, North Carolina.

2. Stock Price History

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40364;image)

Thinking of the main movements and major events, I identify four phases for DUK:

1) The long term bull market, from 1980 (that's how far my Metastock database goes, but I think the company's debut in the market was prior to 1980) until April 2001, when the stock peaked at $47.7.

My fundamental data only goes back to 1994, but I can see justification for the bull run until 2001. Revenue in 1994 was $4.49 B and in 2001 it was $59.5 B. EPS grew a lot less than revenue, going up from $1.13 in 94 to $2.44 in 2001.

2) Then, on phase marked with a 2 on the chart above, the stock went through a bear trend, which took it down 74% to a low of $12.21 in March 2003. Revenue also fell 62% in the period to $22.5 B and EPS turned to a negative ($1.30).

3) Phase 3 is a recovery phase, with DUK climbing 182% to a December 2006 high of $34.5. EPS was $1.54 in 2004, $1.88 in 2005 and $1.57 in 06.

4) The point marked with a 4 on the chart is related to the following spin-off:

«On January 2, 2007, Duke Energy completed the spin-off of its natural gas businesses (Spectra Energy Corp. (Spectra Energy)), including its wholly-owned subsidiary Spectra Energy Capital, LLC (Spectra Energy Capital, formerly Duke Capital LLC), and Duke Energy's 50% interest in DCP Midstream, LLC (DCP Midstream, formerly Duke Energy Field Services, LLC), to shareholders.»

3. Short Term Chart

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40365;image)

Since the spin-off the stock has been stuck in a trading range between $16.97 and $21.3.

Here are analysts' expectations for DUK:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40366;image)

$1.16 EPS in 2007 means the stock is trading at 16 times earnings, which is roughly in line with the general market average.

DUK is a $23.5 B market cap company, so it is already a giant ... a giant that isn't growing, at least not over the last few years. Let's check my best effort in terms of estimates in my valuation model.

4. Fundamental Analysis

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40367;image)

As you probably already know, the yellow lines are known facts, the dark yellow lines are calculated automatically by excel and the white lines are my four working estimates. So let's see why I have the values you see in the white lines.

1) Dilution Factor

1.06 means I expect the share count to increase 6% a year, on average. That has been the average over the past 10 years (http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?Symbol=duk&lstStatement=10YearSummary&stmtView=Ann).

2) Revenue CAGR

Revenue in 2006 was $15.18 B. As you can see on the table above, analysts are expecting just $12.77 B in 07 and $13.29 B in 2008. I think I'm being somewhat optimistic thinking revenues in 2009 will be about the same as they were in 2006, considering analysts projections, but let's leave it this way.

3) Net Profit Margin estimate

I think net profit margin will be basically the same it was in 2006, around 13%. This is already high for an electric utility company, so I don't expect it to expand (also because I expect revenues to be about the same as they were in 06).

4) EPS multiple estimate

Here I've used the electric utilities average P/E ratio for my estimate (http://finance.yahoo.com/q/co?s=DUK). 

5. Conclusion

The valuation model says that if estimates are met, DUK will rise 13.3% a year, on average,  between now and early 2010 and that's considered not attractive, since I look for at least 16% share price CAGR.

DUK is already a $23.5 B mammoth. Unless it's going to be GE, I don't see what's the point of investing in it, unless you're a mutual fund running billions of dollars looking for relative safety and plenty of liquidity. 

But this was just a brief analysis, I may have missed several important aspects of this company. Good luck soxguy :)

I'm still going to write about SHSN today, on visualjourney's request.

Quote from: visualjourney on September 10, 2007, 01:03:45 PM
SHSN

1. Profile

Shearson Financial Network, Inc. (SHSN.OB) operates as a direct-to-consumer mortgage broker and banker in the United States. It originates mortgage loans and home equity loans. The company's products include Conforming Mortgage products, which are adjustable and fixed rate loan programs; Alt A Mortgage products for institutional investors; Second Mortgage Program, a fixed rate amortizing and fixed rate with a balloon payment programs; JUMBO Loans, a adjustable and fixed rate loan program for loans that exceed the loan limits set by the FNMA and the FHLMC; and Non-Conforming loans, which are fixed rate first mortgage loans that are amortized over a fifteen or thirty-year period. As of December 31, 2006, Shearson Financial Network had 13 retail branches licensed in 33 states. The company was founded in 2000. It was formerly known as Blue Star Coffee, Inc. and changed its name to Consumer Direct of America in 2002. Further, it changed its name to Shearson Financial Network, Inc. in 2006. Shearson Financial Network is based in Henderson, Nevada.

2. Stock Price History

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40435;image)

You're a little devil visualjourney, asking me to write about SHSN.OB, which is not only an OTCBB traded stock, but directly involved in the high risk mortgage sector >:D

But of course, I welcome your request, this can be interesting.

Well, looking at the chart, it is a normal penny stock chart which suggests there was plenty of dilution over the years, which of course is a situation I dislike. Unfortunately my source for the historical share count doesn't have OTCBB stocks in its database, so I have to open a few 10-Q to know about the share count evolution.

Ok, on September 30, 2005, the company had 36,960,650 shares of common stock outstanding. Wow, on April 7, 2006, it had 96,198,027 shares. And even more WOW, on the latest count, June 30, 2007, they had 765,942,337 shares outstanding.

I think this analysis may very well stop here. I can see management has absolutely no respect for shareholders and common shares are a worthless piece of paper for them. Whatever value common shares have, they'll take it. Whatever positive news that may be release have just one purpose: to attract potential investors to sell some more shares.

And this stuff is still worth 765,942,337*$0.14 = $107 M.

No way.

3. Conclusion

Even though SHSN.OB is down 99% from its highs I see it going down another 99%. The recommendation for the stock is avoid.

Hi David,

Do you think you could perhaps revisit ASTI.

Thank you,

Ken

Quote from: n1notesguy on September 20, 2007, 12:04:37 PM
Hi David,

Do you think you could perhaps revisit ASTI.

Thank you,

Ken

Yeah, sure, I should have never sold it and may very well buy it back a lot higher, perhaps tomorrow. The $11 warrants issue is behind us, so probably there are more 6 million shares or so. This puts the market cap in the $220 M or so range (I'll make more exact calculus tomorrow).

But, with Norsdk Hydro's help, a $52 B market cap company, I see ASTI's products in the new buildings of the future. If those Chinese solar companies, like JASO and TSL, can have a $1.5 B market cap selling just traditional solar panels, I wonder how much a true innovator in the space like ASTI can be worth?

If I buy and recommend it, I won't sell it for at least three years. From now on there won't be more weak hands. Just in ASTI the cost of having weak hands was 100%. I've had enough of that.

David,

Please at least take a look at SIMC sometime soon.  It has been rising rapidly lately and will probably continue to do so for a while.  As I said earlier:

trading at a forward P/E of about 8 and a P/S of less than 0.5.

Quote from: Jim897 on September 20, 2007, 12:41:41 PM
David,

Please at least take a look at SIMC sometime soon.  It has been rising rapidly lately and will probably continue to do so for a while.  As I said earlier:

trading at a forward P/E of about 8 and a P/S of less than 0.5.

Looks cool, awesome bull run lately, congrats Jim897 :)

Fundamental trends are also very powerful, but I wonder where did you get the forward P/E of about 8? I see the company earned $0.21 over the latest quarter, which was a lot higher than in  previous quarters. If we multiply this by 4 quarters we get $0.84. Since the stock is trading at $12.21, the "natural" P/E is about  14.5, which is still cheap. Do you think there's going to be more strong growth? Backlog was up just 8% from the year ago level.

At first sight I would say SIMC has perhaps more 30% to go before being fairly valued. I wish I had seen it earlier though, it was obvious from the fundamental change that the stock would head a lot higher over the short term.

Give me a hand Jim, why do you call for $12.21/8 = $1.52 EPS over the next twelve months? Thanks :)

Quote from: David Randolph on September 20, 2007, 12:55:02 PM

Quote from: Jim897 on September 20, 2007, 12:41:41 PM
David,

Please at least take a look at SIMC sometime soon.  It has been rising rapidly lately and will probably continue to do so for a while.  As I said earlier:

trading at a forward P/E of about 8 and a P/S of less than 0.5.

Looks cool, awesome bull run lately, congrats Jim897 :)

Fundamental trends are also very powerful, but I wonder where did you get the forward P/E of about 8? I see the company earned $0.21 over the latest quarter, which was a lot higher than in  previous quarters. If we multiply this by 4 quarters we get $0.84. Since the stock is trading at $12.21, the "natural" P/E is about  14.5, which is still cheap. Do you think there's going to be more strong growth? Backlog was up just 8% from the year ago level.

At first sight I would say SIMC has perhaps more 30% to go before being fairly valued. I wish I had seen it earlier though, it was obvious from the fundamental change that the stock would head a lot higher over the short term.

Give me a hand Jim, why do you call for $12.21/8 = $1.52 EPS over the next twelve months? Thanks :)

David, I might be mistaken but I'm pretty sure you looked at SIMC several months ago per somebody's request, and acknowledged that the stock was very undervalued, but it was too illiquid for you too buy for some reason?

QuoteDavid, I might be mistaken but I'm pretty sure you looked at SIMC several months ago per somebody's request, and acknowledged that the stock was very undervalued, but it was too illiquid for you too buy for some reason?

I don't remember, but it is probable. It goes to highlight the fact that technical aspects are irrelevant and shouldn't be considered on anyone's analysis. I've been learning to trust fundamental analysis more and forget the chart.

I know you once wrote you didn't like the 3 Stocks Premium service anymore because you were interested more in learning technical analysis and I was getting too fundamental and long term oriented. But of course, I don't do my job to please everybody, I do it the way I think is the best to achieve an above average performance in a scalable and sustainable way. By scalable I mean it can be done as well with $50 K as with $50 M. It has been an evolving process.

But I'm glad you're still here and welcome your support and always constructive criticism :)

David, I'm clearly not correct at these levels. I said that when the stock was trading below 10.  I don't have the data at my fingertips, but I've seen it said that eps for 2007 is likely to be .90 - .95.  I don't know estimates beyond that.

I know you once wrote you didn't like the 3 Stocks Premium service anymore because you were interested more in learning technical analysis and I was getting too fundamental and long term oriented. But of course, I don't do my job to please everybody, I do it the way I think is the best to achieve an above average performance in a scalable and sustainable way. By scalable I mean it can be done as well with $50 K as with $50 M. It has been an evolving process.

But I'm glad you're still here and welcome your support and always constructive criticism :)
[/quote]

There's nothing wrong with being fundamental and LT oriented, if thats what you really are. I just have a great deal of trouble understanding what you are all about now and WHAT you are evolving into, whatwith the turnover and of  many stocks at inopportune times?

I will be here until either you boot me off or if the number of quality member/contributors keep declining. No you can't please everyone, but I will give you no more criticism, it is after all YOUR site.

Quote from: David Randolph on September 20, 2007, 12:33:51 PM

Quote from: n1notesguy on September 20, 2007, 12:04:37 PM
Hi David,

Do you think you could perhaps revisit ASTI.

Thank you,

Ken

Yeah, sure, I should have never sold it and may very well buy it back a lot higher, perhaps tomorrow. The $11 warrants issue is behind us, so probably there are more 6 million shares or so. This puts the market cap in the $220 M or so range (I'll make more exact calculus tomorrow).

But, with Norsdk Hydro's help, a $52 B market cap company, I see ASTI's products in the new buildings of the future. If those Chinese solar companies, like JASO and TSL, can have a $1.5 B market cap selling just traditional solar panels, I wonder how much a true innovator in the space like ASTI can be worth?

If I buy and recommend it, I won't sell it for at least three years. From now on there won't be more weak hands. Just in ASTI the cost of having weak hands was 100%. I've had enough of that.

Thank you David. I thought it was a great pick the first time around. I did sell 1/2 my shares at that time. I was considering purchasing them back after it pulls back from this run.

Ken

David: 

When you get a chance could you take a look at SIMG and see what you think?  I bought some in the mid 5's.

Thanks, Poli

David, here's another stock that I'd like you to analyze, UTVG.  It is a great growth story.  It is a leading air travel and air cargo transportation agency in Southern China.  The company (or analysts - I'm not sure which) is estimating .24 eps for 2007 and analysts are estimating .39 for 2008.  It currently trades at 3.45 and has been very bullish lately.

SIGM, this stock seems holding up very well during the latest pullback.

David, care to comment on this? I got SIGM from this guy, and his talking fits your thesis pretty well ...

http://www.changewave.com/freecontent/2007/09/freetobymain20070919.html

Hi David,

If you have time could you look into CHCG. Thank you.

Ken

Quote from: jackyw on September 10, 2007, 03:01:59 PM
HMSY please.

I chatted with Ramsburg the other day, and the chart looks bullish.

(http://selfinvestors.com/tradingstocks/uploads/Image/9607_hmsy.gif)

Jacky

1. Profile

HMS Holdings Corp. (HMSY), through its subsidiary, Health Management Systems, Inc. (HMS), provides cost containment, coordination of benefits, and program integrity services to government healthcare programs in the United States. Coordination of benefits services route claims already paid by a government program to the liable third party, which then reimburses the government payor. Cost avoidance services provide validated insurance coverage information that is used by government payors to reject claims that are the responsibility of a third party, typically a group health plan sponsored by a beneficiary's employer. Program integrity services review claims paid by government programs, identify payments errors, and then recoup the erroneous payments. The company also provides Medicare bad debt cost reporting and Disproportionate Share claiming services to healthcare providers. These services enable customers to increase revenues, reduce costs, and ensure regulatory compliance. The company's customers include State Medicaid agencies, government-sponsored managed care plans, child support agencies, SCHIP programs, the Veterans Health Administration, and other public programs. It helps these programs contain healthcare costs by identifying third party insurance coverage and recovering expenditures that were the responsibility of the third party, or that were paid in error. HMS Holdings was founded in 1974 and is headquartered in New York, New York.

2. Stock Price History

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40518;image)

HMSY had its debut in the stock market in December 18, 1992, at $7.77 per share. Today it closed at $24.85 and this represents an average annual return of 8%. I identify four phases in the stock's history:

1) 1993 - 96

Revenue and EPS were growing nicely until mid 96, when net profit margin declined sharply.

2) 1996 - 2000

HMSY declined 97.8% between the mid 1996 high of $37 and the December 2000 low of $0.81. How's that for a "safe" investment in a company with close ties with the US government?

Fundamentally what happened was that a $0.39 profit per share in 96 turned into a loss per share of ($1.09) in 2001.

3) 2001

This was the bottoming phase. It is curious to note that the bottom in the share price coincided with the company's most horrible losses. Should we buy shares when companies are losing money? Well, yes, if there's some perspective of a turnaround.

4) 2002 - Now

There certainly has been a fundamental turnaround at HMSY, with EPS going from $0.05 in 2002 to $0.22 in 2006. Analysts expect $0.55 EPS in 07 and $0.73 in 08 (http://finance.yahoo.com/q/ae?s=HMSY).

This means the 2007 earnings multiple is $24.85/$0.55 = 45, which is quite high.

3. Short Term Chart

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40519;image)

The short term technical trend is certainly bullish. I wonder what happened in the volume spikes on points 1 and 2.

I don't see any news out on point 1, I guess volume spiked because the price was coming down and this attracted buyers. On point 2, when the stock rose nearly 20% in one day, the news out was the following:

• HMS Holdings Corp. Announces Second Quarter 2007 Results; Raises Guidance For Full Year 2007 (http://biz.yahoo.com/prnews/070802/nyth139.html?.v=94)
PR Newswire (Thu, Aug 2)

I see there was a 103% revenue growth in Q2 2007 when compared to Q2 2006, but that was at least partially due to an acquisition.

There's no doubt fundamentals are improving but that seems completely priced in, in my opinion, since the stock is trading at 45 times future earnings.

Since the company had wild fluctuations in its revenues and earnings in the past, I think its business isn't as predictable as one could think. Therefore I believe the stock is expensive at this point.

4. Conclusion

HMSY looks fully valued or even overvalued to me, even though the technical trend is bullish. I'm neutral on the stock and not interested in investing in it.

Thanks anyway jackyw, good luck if you own it :)

Next I'll cover INSW on sctrben's request.

Hi David would you please take a look to EEE Evergreen Energy...Looks bullish to me but I don`t know the fundamentals
Thank You

Has anyone suggested SLP?  La -onda (Oliver) and kslifka have been following this one. It has been up big. It has pulled back on low volume to support and might offer a good buying opp.  It showed up on one my filters a few weeks back, along with GSB.

Kent

Hi David
I was wondering about NTRZ?
It's come down quite a bit and I keep seeing good news.
Thanks and Best
GMan

Quote from: ygtrdr on September 17, 2007, 09:39:21 AM
Morning David, or in your case, good afternoon!

FSTR please.

thanks.

David, along with this could you also do LOCM when you get the time?

thanks

Quote from: sctrben on September 10, 2007, 07:19:05 PM
It's been a while since INSM was hit on before... INSMED has come a long way since those last discussions, all speculation of how the court case would go is now behind them. Test Phases are soon to be bringing new speculative excitement on several fronts, ROP, HARS, MMD, ALS, FOB... 

9 NEW positions, 15 INCREASED positions, and only 3 sold out is a complete turnaround in institutional sentiment...
http://www.nasdaq.com/asp/Holdings.asp?F...

1. Profile

Insmed Incorporated (INSM), a biopharmaceutical company, engages in the development and commercialization of drugs to treat metabolic diseases, endocrine disorders, and oncology. Its lead product candidate IPLEX, a recombinant protein product candidate, is in Phase II clinical trials for the treatment of myotonic muscular dystrophy, the common form of adult-onset muscular dystrophy. It is also conducting a Phase II clinical study for investigating IPLEX as a treatment for HIV associated adipose redistribution syndrome; a Phase I clinical study investigating IPLEX as a treatment for retinopathy of prematurity, a disease where the small blood vessels in the back of the eye and the retina grow abnormally; and an expanded access program in Italy to provide IPLEX to physicians for patients with amyotrophic lateral sclerosis, a neurodegenerative disease that affects nerve cells in the brain and the spinal cord. In addition, Insmed is developing INSM-18, a small molecule tyrosine kinase inhibitor that is under Phase I/II clinical trials for the treatment of breast, lung, pancreatic, and prostate tumors; and rhIGFBP-3, a Phase I clinical product candidate for the treatment of breast, prostate, liver, ovarian, and colon cancers. The company has license and collaborative agreements with Fujisawa Pharmaceutical Co., Ltd. to use IGF-I therapy for the treatment of extreme or severe insulin resistant diabetes; and a license to Pharmacia AB's portfolio of regulatory filings pertaining to rhIGF. Insmed was founded in 1999 and is headquartered in Richmond, Virginia.

2. Stock Price History

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40567;image)

Before I begin let me start by saying that I dislike biotechnology stocks in general, and the reason for that is simple, I dislike them because most of them keep diluting shareholder's value. This happens because most biotechnolohy companies don't sell anything and have huge losses, so to survive they need a continuous flow of capital. They get this capital by issuing and selling new shares to investors. Every time a new share is printed existing shareholders see the value of their shares being diminished as they represent less of the company.

On this issue INSM looks like the champion of dilution, with the share count rising 122 fold since 1999. The company printed 21 million new shares just in the first half of 2007.

A second issue, as I look to INSM's profile, I see it has changed. When I first met this company and was still an ignorant on fundamental analysis (I guess that one year from now I'll consider I was an ignorant now), the company was developing IPLEX to cure children whom had a rare disease which made them abnormally small. I see IPLEX is being studied for other uses now.

I don't know enough to know the potential market for these other uses of the drug, or how long they are from being marketed. I just know that whatever rise the stock may have, it will be used to sell some more shares. This has been the history of this company and I don't see any change in the near or medium term future.

This isn't to say it is impossible for INSM to double or triple if there's some of those "bombastic" news releases which characterize biotech stocks. But will it be sustainable? I doubt it.

Anyway, I see sctrben made his analysis on the stock and likes it, so I just wish I'm wrong or incomplete, good luck :)

What do you think about JRJC

It's been on fire for the past week...

Just wondering what everyone thinks, especially David, about the sky rocketing Chinese stocks and ADR's recently, many on NO news at all.   O.K., we all knowabout the solar stocks and others like JRJC, CPSL, EFUT etc., but then there's CEA, SSRX, XFMC, ATV, ZNH, SDTH to name just a few.

Is it irrational exuberance or is there more to it?

Todays rockets in order of gain (52 to 15%) include INTN, CRGI, CBAK, JADE, ORS, KUN, CDS, FSIN, YTEC, NWD, NINE, FFHL.

Quote from: BigSully1 on September 26, 2007, 07:54:53 PM
Just wondering what everyone thinks, especially David, about the sky rocketing Chinese stocks and ADR's recently, many on NO news at all.   O.K., we all knowabout the solar stocks and others like JRJC, CPSL, EFUT etc., but then there's CEA, SSRX, XFMC, ATV, ZNH, SDTH to name just a few.

Is it irrational exuberance or is there more to it?

Todays rockets in order of gain (52 to 15%) include INTN, CRGI, CBAK, JADE, ORS, KUN, CDS, FSIN, YTEC, NWD, NINE, FFHL.

I took a brief look at all the stocks you have in this list and I think each case is different, even though they're moving as a group in what seems to be the start of a speculative fever which worries me.

I guess all stocks in your list rose because they're "Chinese", but some have sound and attractive fundamentals and others don't. Of all the stocks in your list the one which attracted me the most was YTEC and I'm going to make a more in depth analysis on it and possibly buy it for the Main Portfolio today.

Thanks BigSully1 :)

My fundamental data service had the data for YTEC wrong, the market cap is double of what I thought it was. I also see a 227% increase in the share count from the prior year and, because of that, a decline in EPS, even though net income rose.

This pretty much puts YTEC aside as a long term investment, even though it can fly some more today.

I'm overwhelmed by your list BigSully1 and I dislike to have to hurry or miss the train ... the fact that those stocks are moving so fast doesn't bode well for the future. I guess what's moving them is that the Chinese will be able to buy shares traded in foreign exchanges (I read legislation will change - and that explains the enormous rally in the Hang Seng). So it is a liquidity driven move, not value driven.

I'm going to have to study some more on the issue. I won't run after speculative stocks with "not so good" fundamentals, just because they're flying high. The risk is also high. Good luck to the ones who will join the "Chinese" fever.

I wonder when the Chinese market will crash? Before or after the the '08 Olympics?

Quote from: Terliso on September 10, 2007, 10:35:36 PM
How about AVCI, looks like a good one for long-term hold.

1. Profile

Avici Systems, Inc. (AVCI) provides high-speed data networking equipment that enables networking service providers to transmit data, voice, and video across their networks in North America and Europe. Its primary routing product family consists of three chassis platforms and various line cards. The company provides three equipment configurations, such as the Terabit Switch Router product for the stresses of carrier core routing in large Internet protocol (IP) networks; Stackable Switch Router, a rack-mountable scalable router for service providers with smaller core networks; and Quarter-rack Scalable Router. Its routers are designed to provide high performance across large IP-based core networks; stability and interoperability; and in-service modular scalability to enable non-disruptive incremental capacity additions to the network. The company's products provide these benefits through its proprietary technologies, including its application specific integrated circuits, Velociti switch fabric and distributed system design, IPriori system software, Composite Links, and Non Stop Routing technologies. In addition, it offers support and maintenance, as well as installation and service. The company was founded in 1996 and is headquartered in North Billerica, Massachusetts.

2. Stock Price History

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40604;image)

The long term chart above could suggest the existence of heavy dilution, but the small numbers in blue below the price line, which tell you the number of shares outstanding (http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?Symbol=avci&lstStatement=10YearSummary&stmtView=Ann) (in millions), shows that wasn't the case.

AVCI's problem was of another nature: heavy losses over the years (http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?Symbol=avci&lstStatement=10YearSummary&stmtView=Ann). But, after losing $425 M between 1997 and 2005, the company posted its first ever positive net income number in 2006, which makes this stock quite an interesting case.

Let's study the last couple of years in some more detail.

3. 2006 and 2007 history

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40605;image)

Wow, so many brutal gaps. Let me try to find out what happened in those gap days.

1 - In April 20, 2006, the stock rose 84% in one day, with 10.8 million shares changing hands. The company reported 1st quarter earnings on that day:

«"Strong first quarter order volume coupled with the initial positive affects experienced from our business restructuring and cost structure re-alignment have resulted in Avici's highest quarterly revenue since mid-2001 and produced our first ever positive bottom line result, before special charges," said Bill Leighton, Chief Executive Officer.»

Non gap EPS was $0.15, which made people think $0.60 for a full year and made the stock close at $8.02 for a 13.4 earnings multiple.

After this big news the stock came off on low volume, almost to the initial point before the news.

2 - Then on July 21st, 2006, second quarter results were out, and again, AVCI opened with a blast, rising 34% at the open. The news was:

«"Due to a surge and acceleration in demand this quarter's revenue and bottom line results have far exceeded our expectations and resulted in the company turning cash flow positive. We expect to continue to see strong revenue and bottom line results in 2006, but caution that the business conditions driving this increased demand can change significantly. As we have previously announced, we have restructured our business to be profitable at what we believe is a reasonable going forward revenue baseline over the near term in a multi-vendor environment, even though we expect that 2006 will substantially exceed those levels," said Bill Leighton, Chief Executive Officer.»

These results were much better than the 1st quarter, with GAAP EPS of $0.58 for the quarter. But the stock rose less, initially, because people were burned from buying this stock on a very big gap up. The stock didn't change much until February 2nd, 2007, when ...

3 - There were reports of an institutional investor, Dimensional Fund Advisors, was holding 661,706 shares of the company, or 4.78%.

This piece of information moved the stock from $7.54 to a high of $13.96, when ...

4 - There was a 33% fall at the open, due to the following news:

• Avici Slips on Soapstone Shift (http://us.rd.yahoo.com/finance/external/tsmfe/SIG=12bre5c5s/*http://www.thestreet.com/_yahoo/newsanalysis/technetworking/10351494.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA)
at TheStreet.com (Thu, Apr 19)

This is very interesting, the company changed its business model completely, because management saw router orders from AT&T drying in the near future (this probably explains the recurrent low earnings multiple). Those orders presumably would go to Cisco or Juniper. AVCI had $70 M in cash and management said they move the company to the software business.

Let's see what we have over the next few chapters.

5 - Point 5 isn't on the chart, but you can see the gap down between points 4 and 6. This happened as a response to the following news:

Strange, I can't find any news to explain this sudden 26% decline. Ah, ok, I found it later, it was because of the ex-dividend date of a $2 cash dividend.

6 - AVCI rose 35% on the following news release:

• Avici Systems Reports Second Quarter 2007 Results (http://biz.yahoo.com/bw/070719/20070719005273.html?.v=1)
Business Wire (Thu, Jul 19)

Earnings for the quarter were spectacular, but because they came from discontinued operations, the stock fell back down to close the gap and then some. AVCI paid a $28 M cash dividend and still had $61 M in cash at this point.

4. What do we have now?

We now have a $151 M market cap company with $61 M in cash entering a new business. The past isn't any guide for the future in this case, because a few quarters from now AVCI will be an entirely new business (SoapStone Networks will be the new name).

So, the issue is, how much is SoapStone worth? More or less than $151 M - $61 M = $90 M?

I've read some press releases about SoapStone and the company's website at www.soapstonenetworks.com and unfortunately I don't understand the product very well and can't judge its market potential.

As Buffet says, "invest only in businesses you understand". This clearly isn't my case with AVCI. Perhaps one of you guys is a telecommunications engineer and knows something about the need for this SoapStone product.

5. Conclusion

AVCI's old business is ending and the market currently values its new business at $90 M. I don't know if that's a lot or if it's well below fair value, because I don't understand and can't judge the product, its price, or its market potential. An investment in AVCI shares would be a complete shot in the dark for me. My opinion is neutral.

David,

Could you pls relook at SVA, one of your old pic, if you remember?

Its doing pretty nicely the few last days.

Thanks

Phabrux

Quote from: guitarman on September 25, 2007, 07:16:34 PM
Hi David
I was wondering about NTRZ?
It's come down quite a bit and I keep seeing good news.
Thanks and Best
GMan

guitarman,
Dont get into NTRZ..the dilution is scary..they have over 100m shares outstanding and they barely make a penny per share. Theyre good at issuing pr's..thats it.
jmo. Nick

Quote from: la-onda on September 12, 2007, 05:14:30 PM
hi David,
please check IMOS again:
http://www.3stocksonfire.org/trading/index.php?board=2.0
(updated informations: http://www.3stocksonfire.org/trading/index.php?board=2.0 )

AKNS now on the Nasdaq!
please check AKNS instead of IMOS!
http://www.3stocksonfire.org/trading/index.php?topic=10250.msg106017#msg106017

thanks
Oliver

1. Profile

Akeena Solar, Inc. (AKNS) engages in the design, integration, installation, marketing, and sale of solar power systems for residential and small commercial customers in the United States. It principally focuses on the design and integration of grid-tied solar power systems, which are electrically connected to the utility grid so that excess energy produced during the day flows backwards through the utility's electric meter. The company also works on solar thermal or solar pool systems. It serves commercial customers, including schools, and housing and owner occupied businesses consisting of wineries and small commercial offices, as well as residential customers, including high-income professionals. Akeena Solar sells its products through print, Web, and radio advertisements, as well as through participation in industry trade shows, individual consultations with prospective customers, and sales force. The company was founded in 2001 and is headquartered in Los Gatos, California.

2. Stock Price History

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40633;image)

AKNS had its IPO in August 31st, 2006, through a reverse merger with Fairview Energy Corporation, Inc.

On September 14, 2006, AKNS had 15,136,136 shares outstanding. The stock closed at $2.95 on that day, so the market cap was $44.65 M.

After a series of PIPEs (Private Investments in Public Equity), the number of shares outstanding rose to 23,625,941 in August 8th, 2007:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40634;image)

The current market cap is $189 M.

All this "strengthening financial foundation" activity caused 56% dilution in one year to existing shareholders. AKNS needed the money, because, even though revenues are growing very rapidly ...

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40635;image)

... the company keeps losing money and it appears that the more it sells, the more it loses. In Q2 2007 the company beat two records, the sales level (at $7.5 M) and the losses level (at $1.9 M).

I'm not sure why this happens. Perhaps it is because AKNS, being at the top of the value chain ...

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40636;image)

... is squeezed on its margins by the producers and the consumers.

I think I'm starting to get this business. AKNS is like a retailer, but one of those that has to take the product to your house and then install it, or else, it wouldn't sell anything. This adds to costs and lowers the margins. It appears to me that the business also has very low barriers to entry. If I wanted to I could start a company similar to AKNS in not much more than a month, I would just have to buy the solar panels, hire people to install them, make some marketing and then start selling. In my opinion this will always be a low margin business, say, 5% net profit margin at best.

With the available information I've derived the usual estimates for my valuation model.

3. Valuation Model

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40637;image)

1 - Dilution factor of 20%

Since we've had 56% dilution in the past year I see management's propensity to dilute shareholder's value. Also because I expect the company to keep losing money, at least for another year, it will probably keep doing PIPE deals and other types of financing and stock options incentive plans. I see the share count rising from about 24 million now to 41 million in early 2010.

2 - Revenue CAGR

Management already said it expects 135% revenue growth in 2007, from the 2006 level of $13.4 M. I guess this kind of revenue growth will continue in 2008 and 2009 and therefore I see 2009 revenues of $179 M, growing from about $31.5 M in 2007. This is exceptional revenue growth, but I fear there's the risk of growing losses too, since this has been the recent history of the company.

3 - Net profit margin

Net profit margin in the 6 months so far in 2007 was -20.7%. I hope this improves a lot, but I don't think it will ever exceed 5%, and this is what I have in my valuation model.

4 - EPS multiple

I put 25 there just because solar energy is a hot sector now and I expect it to remain that way for years to come.

The final results tell me AKNS isn't an attractive long term investment at this point, because if my fundamental estimates are met, the share price will decline 13% a year between now and mid 2010.

4. Conclusion

To me, AKNS's problem is its low profit margins and the fact that losses are rising as revenue grows. It shouldn't be that way, if the business had healthy fundamental trends.

Anyway, solar energy is very hot in the stock market now and at first sight AKNS looks like a great investment opportunity (when I started looking at the company's website I got excited and went talking to my wife about setting an AKNS franchise or something here in Portugal - like I had nothing more to do ;D).

But, on a second thought and after some study, I must say that not everything in the solar energy space is a great investment. Companies need to have an innovative technology and a reasonably fat net profit margin perspective to be outstanding long term investments.

So, my final take on AKNS is that the chart is bullish and it can rise some more, but I think over the long term, dilution, competition and it being a low margin business will put the advance in check. I believe it has a poor reward/risk ratio.

I can be wrong though, good luck la-onda and thanks for bringing this one to my attention :)

good morning or afternoon to you over in Europe. :)
can you look at SFEG.OB?

All this per the interview from the Christian Financial Radio Network on Podcasts.
MIO environmentaly friendly resources owned by the company's inground value is substantial.
per the CEO production has not been announced.
MIO is widely used in europe not so widely used in USA yet since here we have mainly used Zinc instead.
MIO is also less expensive to produce.


Open 0.00
Previous Close 0.58
Day's Range 0.00 - 0.00
52 - Week Range 0.22 - 1.445
9/11/07 - 3/28/07
Avg Volume (10 days) 256,970
Price / Earnings (TTM) 0.0x
Earnings Per Share(TTM)  0.00
Market Cap 39.9 M
Shares Outstanding 68.8 M
Beta 1.3
Dividend Yield 0.00%
Declared Dividend 0.00
Ex-Dividend Date --
Dividend Payable Date --

12 month target price is 3/share

stock price decline- "...since march of this year we've been issuing stock to pay down convertible notes in connection with the 3.5 million dollar financing we completed last year. recently we elected to repay the remaining 1million in cash rather than in stock..." qouting the CEO
per ceo value of inground assets are substancial and he approximates value of 400million after extraction therefore he sees the projected price of $3/share pretty conservative.
santafegoldcorp.com (http://santafegoldcorp.com)

they are also planning on adding more to their company. aquasitions.



Thanks.

Hi David,could you possibly have a look at tattf for me? I got in a couple weeks ago in low 12's and it's almost 14 now,seems very strong but not a lotta shares traded. Thanks,Randy

Quote from: kslifka on September 12, 2007, 07:25:24 PM
WRLS...looks very attractive with latest guidance update. ;D

1. Profile

Telular Corporation (WRLS) engages in the design, development, manufacture, and marketing of component elements, and telecommunications equipment assemblies and other complementary products. These products provide the capability to connect alarm panels, telephones, fax machines, and data modems directly to cellular networks. It primarily offers Fixed Cellular Terminals and Fixed Cellular Phones that are used in various applications, such as wireless security, Internet access, least cost routing, machine-to-machine, wireless basic telephone services, and cellular public phones. Its customers include security system installation companies, and security system distributors and dealers in the North and South America, El Salvador, Guatemala, Mexico, India, South Africa, and Venezuela. Telular was founded in 1986 and is headquartered in Chicago, Illinois.

2. Stock Price History

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40662;image)

In the 13 years period between 1994 and 2006, WRLS lost money in 12 of those years. It was profitable only in 2001. This is the primary explanation to why the stock is down 93% from its IPO price back in 1994. The second explanation is dilution, since the share count rose from 7.9 million in 97 to 18.3 million shares outstanding now.

However, it seems something is changing, because Q2 2007 was marginally profitable (the first profitable quarter going back 11 quarters):

• Telular Corporation Reaches Profitability in the Third Quarter of 2007 (http://biz.yahoo.com/bw/070724/20070724005101.html?.v=1)
Business Wire (Tue, Jul 24)

3. Short Term Chart

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40663;image)

The reaction to the earnings news is marked with a 1 on the chart above. I think the "juice" in the press release is:

«We continue to serve the residential cellular security market with our leading, cellular security product, Telguard Digital, and with less than eight months left until the "sunset date," when analog cellular networks will be deactivated, we are starting to experience an acceleration of analog to digital upgrade activity and receive significant orders. Based on this demand and increased backlog, we currently expect sequential growth in revenue from our Telguard products of over 30% in the fourth quarter.»

A couple of months later they raised guidance for the fiscal 4th quarter:

• Telular Raises Telguard Revenue Guidance Due to Strong Demand For Digital Cellular Communicators (http://biz.yahoo.com/bw/070912/20070912005110.html?.v=1)
Business Wire (Wed, Sep 12)

The reaction originated the gap up marked with a 2 on the chart. The talk is:

«During the current fiscal fourth quarter, Telular has seen a dramatic increase in sales of its fully digital line of security products fueled by the approaching analog cellular sunset date. Previously, Telular estimated Telguard product revenue was expected to grow 30% sequentially for the fourth quarter and now estimates that growth to exceed 90% sequentially.»

You see, the problem of all this is that the revenue growth is being fueled by a temporary effect. When the "sunset date" passes, there's going to be an hangover and revenue will decline to the previous level or even lower.

4. Conclusion

WRLS wasn't a good investment before, since the company lost money in 12 out of 13 years (and diluted shareholder's value for cash) and it probably won't be a good investment in the future, after the temporary effect of the change from analog to digital alarms is gone. The short term positives seem to be baked into valuation, with the stock up 100% over the past 6 months or so.

So, my long term outlook for WRLS is neutral at best.

Quote from: nicknite20 on September 12, 2007, 08:47:04 PM
David,
Could you pls relook at LAYN? Its done pretty nicely for me since we last discussed it..i think it goes higher..

http://www.3stocksonfire.org/trading/index.php?topic=9240.0

Thanks,
Nick

1. Profile

Layne Christensen Company (LAYN) provides drilling and construction services and related products to water and wastewater infrastructure and mineral exploration markets. It also produces unconventional natural gas for the energy market. The company operates in four divisions: Water and Wastewater Infrastructure, Mineral Exploration, Energy, and Other. The Water and Wastewater Infrastructure division provides a range of water-related services and products, including hydrological studies, site selection, well design, drilling and well development, pump installation, and well rehabilitation. It also offers design and construction of water treatment facilities, and the provision of filter media and membranes to treat volatile organics and other contaminants, such as nitrates, iron, manganese, arsenic, radium, and radon in groundwater. This division also offers environmental drilling services to assess and monitor groundwater contaminants. The Mineral Exploration division provides a range of drilling services for the mineral exploration industry. Its aboveground and underground drilling activities include various phases of core drilling, diamond, reverse circulation, dual tube, hammer, and rotary air-blast methods. The Energy division focuses on the exploration and production of unconventional gas properties. The Other division offers specialty energy services. The company operates in North America, as well as Africa, Australia, Europe, Canada, Mexico, and South America. As of January 31, 2007, the company had 361 net producing wells. Its customers include municipalities, investor-owned water utilities, industrial companies, global mining companies, consulting and engineering firms, heavy civil construction contractors, oil and gas companies, and agribusiness. Layne Christensen was founded in 1981 and is headquartered in Mission Woods, Kansas.

2. Stock Price History

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40684;image)

I think the video analysis I made in April 4, 2007, explains fairly well LAYN's history between 1992 and 2004:




In my forecasts I expected LAYN to rise about 20%, on average, for the next 10 years. However, the stock is up 43% over the last 6 months, that is, since I made the analysis, so why the stronger pace?

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40685;image)

Before I try to give a plausible explanation, let me give my congratulations to nicknite20 for buying and holding LAYN, it has been a great investment. His posts at the Stock Picking board (http://www.3stocksonfire.org/trading/index.php?topic=9240.msg94367#msg94367) have some motives for the steep bull trend.

One plausible explanation could be that I used to work under a 10 year valuation model, instead of the current 3 year model, which I believe can capture medium term fundamental swings better. If, instead of the 10 year calculus I had made a three year forecast, since the last three years average revenue growth was 39% (not 25% as I have in the video analysis), the model would return a higher than 20% share price CAGR.

Also, when I made the initial analysis I didn't pay enough attention to the business model, I was more concerned about the fundamental trends. I still didn't get as far as trying to understand the true nature of the business. Today, when I make an analysis, I'm much more dedicated to understanding the business and its potential. I look to the future in a more subjective way, instead of just extrapolating the past financial trends into the future.

Or else I would have probably seen that drinkable water is a scarce good and it would be in high demand for years to come. The market has been paying a high price for companies in this industry, because it understands the value of drinkable water and its scarcity.

The following article, posted by ravenquork, explains this quite well:

An Arid West No Longer Waits for Rain (http://www.nytimes.com/2007/04/04/us/04drought.html?_r=1&ref=todayspaper&oref=slogin)

But enough of that analysis, what to think of LAYN now?

We've already seen that the business sector is quite appealing. The company is a $938 M market cap company, and it is expected to have revenue of $842 M in 2007 and $916 M in 2008. EPS estimates are $1.99 in 07 and $2.18 in 08. This means the stock is trading at about 26 times next year earnings. Did I say the market is paying a high price for this type of companies?

Let me make a new valuation model, this time for the next three years:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40686;image)

I've derived these estimates using my sensibility and some of the available information. I see about 21% annual return for 2008, 2009 and 2010, on average. I would like to put a higher revenue CAGR number, but since analysts are forecasting just 8.8% growth for 2008, probably that's because they see some of the company's businesses with softening demand (the CEO himself mentioned that). 30% seems the maximum we can hope for. The positive surprise could come from a larger than 5% net profit margin in the future, net profit margin is hard to predict though. Much easier to grasp the demand factors (revenue) than how a specific company will handle its costs.

3. Conclusion

I still think LAYN is an attractive long term investment in more or less the same way as I did before. I probably should have bought it earlier, but now I'm not willing to pay 26 times next year earnings for this type of company, even though I understand the appeal of the "find drinkable water" industry.

Continuation of a good investment nicknite20 :)

david can you look at prgn    it is a shipping company

David,
Thanks a lot for the analysis, and very happy to see a positive endorsement from you.
Also, thanks for words of encouragement.
Nick

Quote from: BigSully1 on September 26, 2007, 07:54:53 PM
Just wondering what everyone thinks, especially David, about the sky rocketing Chinese stocks and ADR's recently, many on NO news at all.   O.K., we all knowabout the solar stocks and others like JRJC, CPSL, EFUT etc., but then there's CEA, SSRX, XFMC, ATV, ZNH, SDTH to name just a few.

Is it irrational exuberance or is there more to it?

Todays rockets in order of gain (52 to 15%) include INTN, CRGI, CBAK, JADE, ORS, KUN, CDS, FSIN, YTEC, NWD, NINE, FFHL.

Maybe not the thread for it, but;
Starting a list of Chinese/Asian U.S. traded stocks acoording to year to date rate of gain as of yesterday. Todays movements change the whole rankings, like KUN's 50% move today.

Symbol Name YTD Change
1 JRJC China Finance Online 878%
2 CEA China Eastern Airlines 389%
3 ZNH China Southern Airlines 280%
4 TSL Trina Solar 234%
5 CHNR China Natural Rsrcs 226%
6 ACH Aluminum Corp. of China 223%
7 JASO JA Solar 202%
8 MHJ Man Sang Holdings 194%
9 BIDU Baidu.com 184%
10 YGE Yingli Green Energy 180%
11 YZC Yanzhou Coal Mining 166%
12 LDK LDK Solar 153%
13 SVA Sinovac Biotech 147%
14 SYUT Synutra International 144%
15 WX WuXi PharmaTech 142%
16 CAF MS China A Sh. Fund 116%
17 HRBN Harbin Electric 116%
18 EJ E-House 103%
19 CHL China Mobile 99%
20 EDU New Oriental Education 93%
21 KUN China Shenghuo Pharm. 92%
22 MR Mindray Medical Int'l 88%
23 LFC China Life Insurance 85%
24 CEO CNOOC 78%
25 FMCN Focus Media 77%
26 PWRD Perfect World 76%
27 GIGM GigaMedia 75%
28 CTRP Ctrip.com 74%
29 SNDA Shanda 73%
30 SINA Sina Corp. 71%
31 FXI FTSE/Xinhua China ETF 70%
32 SOHU Sohu.com 68%
33 PGJ Halter USX China ETF 66%
34 SHI Sinopec Shanghai 66%
35 YTEC Yucheng Technologies 61%
36 CMED China Medical Tech. 59%
37 CHA China Telecom 54%
38 CHN China Fund Inc. 50%
39 HNP Huaneng Power Int'l 49%
40 ATS APT Satellite 48%
41 CHU China Unicom 44%
42 CYD China Yuchai 44%
43 GSOL Global Sources 38%
44 SNP Sinopec 37%
45 PTR PetroChina 35%
46 ATV Acorn International 35%
47 JFC JF China Region Fund 35%
48 TBV Tiens Biotech 31%
49 GSH Guangshen Railway 30%
50 CHDX Chindex International 29%
51 CTDC China Tech. Development 25%
52 ASIA AsiaInfo 24%
53 STP Suntech Power 21%
54 CBAK China BAK Battery 20%
55 JOBS 51job 19%
56 JADE LJ International 19%
57 SOLF Solarfun Power 18%
58 SCR Simcere Pharmaceutical 17%
59 INTN INTAC International 15%
60 JST Jinpan International 11%
61 TCM Tongjitang Ch. Medicines 10%
62 SSRX 3SBio Inc. 8%
63 SMI Semiconductor Mfg. Int'l 3%
64 SPRD Spreadtrum Comm. 3%
65 CN China Netcom 3%
66 COGO Comtech 1%
67 AOB American Oriental Bio. 0%
68 CSUN China Sunergy 0%
69 NCTY The9 0%
70 HMIN Home Inns & Hotel Mgmt -3%
71 CSIQ Canadian Solar -4%
72 ADY American Dairy -7%
73 SORL Sorl Auto Parts -9%
74 NTES NetEase -11%
75 MPEL Melco PBL Entertainment -11%
76 CPSL China Precision Steel -11%
77 NINE Ninetowns Internet Tech. -12%
78 DSWL Deswell Industries -13%
79 PACT PacificNet -13%
80 HRAY Hurray! -14%
81 NTE Nam Tai Electronics -15%
82 CHINA CDC Corp. -17%
83 XING Qiao Xing Univ Telephone -19%
84 KONG KongZhong -19%
85 QXM Qiao Xing Mobile -19%
86 LONG eLong -21%
87 TSTC Telestone Technologies -26%
88 CNTF China Techfaith -26%
89 ACTS Actions Semiconductor -27%
90 CAAS China Automotive Sys. -28%
91 LTON Linktone -29%
92 NWD New Dragon Asia Corp. -31%
93 SEED Origin Agritech -32%
94 XFML Xinhua Finance Media -35%
95 FFHL Fuwei Films -39%
96 EFUT eFuture -44%
97 GRRF China GrenTech -46%
98 VIMC Vimicro International -48%
99 ASTT ASAT Holdings -53%
100 UTSI UTStarcom Inc. -54%

David
Got a new tip.

How does MVIS look to you?

Thanks and Best
GMan

David,

On Sept 20th I requested time permitting if you could take a look at SIMG.  I imagine you are really busy but If you get a chance in the next week or two could you take a look and see what you think?  I bought it in the mid 5's.

Thanks, POLI

Quote from: poli on October 08, 2007, 01:52:28 PM
David,

On Sept 20th I requested time permitting if you could take a look at SIMG.  I imagine you are really busy but If you get a chance in the next week or two could you take a look and see what you think?  I bought it in the mid 5's.

Thanks, POLI

Sure Poli, SIMG is in 8th place on the requests list, so probably eight trading days from now I'll write an analysis on it. But it looks attractive at first sight, nice catch poli :)

I've been kind of slow in making new analysis, especially now that I have to write 15 daily updates ... today my wife showed some openness about me expanding my working hours a bit, so I'll try to write the updates right after the market close (at least a few), so that I have more time in the morning to cover new stocks.

Thanks for your interest :)

David,

Could you take a look at ABAT?  It is moving to the AMEX tomorrow and is up 1200% ytd.  It is a Chinese stock.  BigSully, you should add it to your Chinese stock list.  I think I also did not see UTVG there, another one to pay attention to.

Jim

The sticker for ABAT tomorrow will be GBT.

I've made a good amount of money in the past month with YGE and wonder what you think of it.

David look at this good stock  CHL  it's a chines company ...

Quote from: johnle1024 on September 13, 2007, 02:02:13 PM
Hi David don't post here too often but always checking for stocks... Great job on your analysis, if you could can you do an analysis on CREE ? thanks

1. Profile

Cree, Inc. (CREE) develops and manufactures semiconductor materials and devices primarily based on silicon carbide (SiC), gallium nitride (GaN), and related compounds. The company produces light emitting diodes (LEDs), SiC and GaN material products, and high-power products using its SiC and GaN materials. Its LED chip products include blue and green devices made from GaN and related materials grown on SiC substrates. These LEDs are electronic components that are used in various applications, including backlighting for mobile products, automotive interior lighting, electronic displays, gaming equipment, consumer products, and other electronic equipment. Cree's high brightness packaged LEDs comprise high brightness LEDs for lighting applications and surface mount devices; and through-hole LEDs for signage, gaming, and other applications. The company's materials products consist of SiC and GaN wafer and epitaxy products, which are used to manufacture products for optoelectronic, microwave, and power switching applications, as well as bulk SiC materials used for gemstone applications. Its high-power products comprise SiC power devices, which are used in power conditioning and power switching in power supplies and motor control applications; and RF and microwave devices. Further, Cree provides foundry services for wide bandgap monolithic microwave integrated circuits that are used in various wide bandwidth communications applications, high-power radar amplifiers, electronic warfare, and wireless infrastructure. The company markets its LED products to customers who incorporate them into packaged lamps for resale to original equipment manufacturers and in packaged products; and SiC and GaN materials products to corporate, government, and university research laboratories. It sells its products primarily in Japan, Malaysia, Hong Kong, Korea, Taiwan, Europe, China, and the United States. The company was founded in 1987 and is headquartered in Durham, North Carolina.

2. Stock's History

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40877;image)

CREE's IPO happened in February 1993 at a split adjusted price of $1.25. With the stock closing at $29.46 yesterday, the average annual return of this investment was 23.5%, which is attractive.

However, of course, at the technology bubble's peak in 2000 the average annual return was a lot higher, let me see just for curiosity, it was 73% :o Clearly, there was a time to sell this stock ... what Warren Buffet is doing with his PetroChina stake also tells me that when stocks enter the "bubble land" and decouple a lot from the fundamentals, it is better to take the profit. There's a time to buy and sell stocks, only a very limited number of stocks rises steadily for 30 years or more without getting a bubble-like valuation in the process. Coca-cola is one of those rare examples.

Going back to CREE, I see the share count rose 6.34% a year, on average, since 1998, and rose 10.4% so far in 2007. This will matter for the dilution factor in my valuation model.

The current market cap is $2.5 B, so, we're not going to discover anything new here, this is a medium cap stock widely followed by analysts (twelve are providing estimates for it).

As for the revenue trend:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40878;image)

The trend has been ascending over the years, with two declines in 2002 and fiscal 2007 which ended in June 2007. But analysts are expecting a return to growth in fiscal 2008 and 2009. The last five years revenue CAGR was 20.5% and the Price to Sales Ratio (using 2007 number) is 6.34, which seems high, since the company's industry has an average sales multiple of 1.68 (http://finance.yahoo.com/q/co?s=CREE).

As for EPS, the evolution was:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40879;image)

EPS declined for three years in a row, from $1.18 in 2005, to $0.98 in 2006 and $0.72 in 2007. For 2008 analysts expect a further decline to $0.39 and then a recovery in 2009 to $0.55.

This means that CREE is trading at a 2008 estimated EPS multiple of $29.46/$0.39 = 75.5, which is extremely high. The Semiconductor Equipment & Materials industry (http://finance.yahoo.com/q/co?s=CREE) trades at 20 times earnings.

3. Conclusion

According to the most widely used valuation metrics CREE seems very overvalued. I would avoid the stock, because even if there are positive fundamental surprises, that's already priced in by the lofty valuation.

David, when you get a chance check out SEED

its a china company that was recently mentioned in Forbes as one of the best under a billion dollar companies.  They have 23 million shares outstanding and are buying back their shares.  Also they are expected to do over $100 million in revenues in 2008.

Thanks 

Quote from: mbaugh on October 10, 2007, 01:45:33 PM
David, when you get a chance check out SEED

its a china company that was recently mentioned in Forbes as one of the best under a billion dollar companies.  They have 23 million shares outstanding and are buying back their shares.  Also they are expected to do over $100 million in revenues in 2008.

Thanks 

Should be worth a look. Up 45% today.

Quote from: BigSully1 on October 10, 2007, 02:38:15 PM

Quote from: mbaugh on October 10, 2007, 01:45:33 PM
David, when you get a chance check out SEED

its a china company that was recently mentioned in Forbes as one of the best under a billion dollar companies.  They have 23 million shares outstanding and are buying back their shares.  Also they are expected to do over $100 million in revenues in 2008.

Thanks 

Should be worth a look. Up 45% today.

I went ahead and bought a little, got my feet in the door, even though it already had a 45% runup. At least I looked just a little before buying this time. Should be a great sector to be in, after all, these emerging countries have to have a way to feed all those people without relying so heavily on imports. Now I need to take a closer look. Ag baby!

SEED still trading heavily in A.M. Up a whopping 83% today if including A.M. Nice Mbaugh, and thanks.

Quote from: BigSully1 on October 10, 2007, 05:58:01 PM
SEED still trading heavily in A.M. Up a whopping 83% today if including A.M. Nice Mbaugh, and thanks.

No Problem BigSully, I'm glad you were able to get in early.  We're all Family here at 3stocksonfire, so it feels good to help the family out. ;D

By the way David, Excellent Job on the portfolio!!!! 

Good night!
Mbaugh

Great job David. I am sure 3SoF will be soon featured in Forbes. We need 3SoF IPO [preferrably filed from China], and we all will be onboard. Or atleast for 83% in first day.  :D

Quote from: BigSully1 on October 10, 2007, 03:52:57 PM

Quote from: BigSully1 on October 10, 2007, 02:38:15 PM

Quote from: mbaugh on October 10, 2007, 01:45:33 PM
David, when you get a chance check out SEED

its a china company that was recently mentioned in Forbes as one of the best under a billion dollar companies.  They have 23 million shares outstanding and are buying back their shares.  Also they are expected to do over $100 million in revenues in 2008.

Thanks 

Should be worth a look. Up 45% today.

I went ahead and bought a little, got my feet in the door, even though it already had a 45% runup. At least I looked just a little before buying this time. Should be a great sector to be in, after all, these emerging countries have to have a way to feed all those people without relying so heavily on imports. Now I need to take a closer look. Ag baby!

I really do believe that the ag/feed/food sector in China is a great place to be. I already talked about the severe shortage of pork driving prices, and large contract between China and Smithfield foods as just one of the reasons I bought SDA - the largest Brazilian meat producer, on the member boards. I don't think anyone really paid attention though  :(

Quote from: mbaugh on October 10, 2007, 09:47:46 PM

Quote from: BigSully1 on October 10, 2007, 05:58:01 PM
SEED still trading heavily in A.M. Up a whopping 83% today if including A.M. Nice Mbaugh, and thanks.

No Problem BigSully, I'm glad you were able to get in early.  We're all Family here at 3stocksonfire, so it feels good to help the family out. ;D

By the way David, Excellent Job on the portfolio!!!! 

Good night!
Mbaugh

Yes Mbaugh, I like to think of us a family or team, collectively helping each other. I like your attitude and applaud (again)

Now about SEED, I think it does have excellent potential. I'm not buying more (just yet), but I'm not selling what I already have either. Thanks again.

I think David's new thread right on the the Main Board at the forefront is a very good idea. Good and honest new ideas can be brought forth without trying to distinguish between the "pumps/dumps" of the free boards. After all, we are a "family" right?

I really do believe that the ag/feed/food sector in China is a great place to be. I already talked about the severe shortage of pork driving prices, and large contract between China and Smithfield foods as just one of the reasons I bought SDA - the largest Brazilian meat producer, on the member boards. I don't think anyone really paid attention though   

I've been invested in SDA for long term since last Feb and also holding for
almost a year in:

FXI - several chinese companies.
ACH - Trading it frequently for the last two years (nice Aluminum/China combo)
           as I wrote in the corresponding thread
YCZ -    EWZ   -   BG (soy traders + other agric commodities & investors in biofuel)

Cheers & good picking.

Jorgegr

Can someone help me out on SEED.  On MSN money it says SEED EPS for 9-30-07 was over $3.  Am I reading this right.  The balance sheet looks great in terms of growing revenues.   I'm trying to determine what the actual EPS and forward P/E is?  I appreciate all the help I can get.

Mbaugh

http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?Symbol=SEED&lstStatement=Income&stmtView=Ann

YGE!

Quote from: mbaugh on October 12, 2007, 04:41:19 PM
Can someone help me out on SEED.  On MSN money it says SEED EPS for 9-30-07 was over $3.  Am I reading this right.  The balance sheet looks great in terms of growing revenues.   I'm trying to determine what the actual EPS and forward P/E is?  I appreciate all the help I can get.

Mbaugh

http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?Symbol=SEED&lstStatement=Income&stmtView=Ann

No Mbaugh. You're looking at EPS for the 9 months ended 9/30/06. MSN shows eps for last Q at 1.59/1.50 basic/diluted and the previous Q -1.34/-1.34. If you combine the 2 Q's, you have .25/.16 for the 2Q's. I think this is this screen you want to look at.

http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?Symbol=SEED&lstStatement=Income&stmtView=Qtr

It's hard to extrapolate an actual current P.E. at this time, or for that matter even a forward P.E.  I haven't had time to really delve into it yet, there's alot to study here, and likely won't have time for several weeks with earnings season starting in earnest now and several other matters I need to attend to.

I only bought enough to get me interested. But without more study, I won't be buying more yet and would only rate it speculative with very good potential. You're doing the right thing studying beforehand.

I guess you  know that the single analyst slashed EPS estimates for both 2007 and 2008 after last ER? That doesn't deter me from being highly interested here though.

I like the institutional support with some quality names. Royce seems to be in many of the best holdings that I'm in. Galleon is a hedge fund run by an Indian guy, can't remember his name, something like Saj?, known for it's very high performance and also a mutual holder with some of my other holdings. This is  NOT a good reason to buy though, nor is the Forbes endorsement.

Thanks for your help.  Here's some info from the investor conference.  I'm only gonna trade this stock, not hold for the long-term.  I believe it can reach its previous high of 18 since volume is at an all time high.  This stock has never had high volume before and last week volume was huge, surpasing all the other china stocks on fire.  Good Luck!

http://sec.gov/Archives/edgar/data/1321851/000115752307009251/a5495471ex99_2.htm

Quote from: terainvestment on September 17, 2007, 08:45:39 AM
Hi David,

thank you for your great analysis: can you check IOM if you have time?

Thanks,

A.

1. Profile

Iomega Corporation (IOM) and its subsidiaries engage in the design and marketing of various portable data storage products in the United States and internationally. Its products enable customers to store, protect, secure, capture, and share their digital content and data. The company offers various consumer products, such as Zip drives and disks, external hard disk drives, CD-RW drives, DVD rewritable drives, micro mini USB flash drives, and external floppy disk drives. It also provides various business products, such as REV drives, REV-based autoloaders, network attached storage servers, and network hard disk drives. In addition, the company offers various services, including managing firewalls, virtual private networks, and secure remote access for small businesses. Iomega's customers include retailers, direct marketing resellers, distributors, original equipment manufacturers, online vendors, value-added resellers, system integrators, and end users. It also sells its products and services through its Web site, www.iomega.com. The company was founded in 1980 and is headquartered in San Diego, California.

2. Stock Price History

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41009;image)

This is curious, IOM had a bubble, but it wasn't in 2000, the stratospheric rise you see on the chart happened in 1996. Back then IOM earned $1.05 per share and in May 1996 it was trading at 130 times forward earnings. The inevitable decline followed, but interestingly, it wasn't due to dilution, but to shrinking sales over the long term (http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?Symbol=iom&lstStatement=10YearSummary&stmtView=Ann). Look in the link how sales went down from $1.7 B in 1997 to $229 M in 2006.

IOM's business has been shrinking dramatically over the years. I'm not sure if this is because of falling demand in the data storage industry or due to competitive pressures, but I think it is because people don't need the company's products (http://www.iomega.com/direct/main/home.jsp?FOLDER%3C%3Efolder_id=26891273&ASSORTMENT%3C%3East_id=63191&bmUID=1192435713118) all that much anymore, because the computer disk's space increased a lot and people send big files over the internet, they don't move data by saving it to an external data storage device and then carry it to another computer, as they used to do.

Analysts are optimistic about the immediate future, though:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41010;image)

They expect a return to revenue growth and profitability. I wonder why the shift ... anyway, with the stock trading at $5.07, it is valued at 34 times 2006 earnings and 17.5 times 2008 expected EPS, which isn't cheap, especially for a company with declining revenue on an historical basis and what seems to be an obsolete product offering.

3. Short Term Chart

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41011;image)

Over the short term things look better, with the stock up about 100% from the lows in about 12 months, as there's some revenue growth and profitability:

«"I am pleased with our financial and operational results for the second quarter which is historically our seasonally weakest quarter," said Jonathan Huberman, Chief Executive Officer. "We posted our fourth consecutive quarter of net income and third consecutive quarter of year-over-year revenue growth; and we continued to execute on our 2007 goals."»

So, IOM is a turnaround play. But the turnaround appears to be losing momentum, as analysts have been lowering estimates:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41012;image)

4. Conclusion

My take is IOM was able to have a "fundamental and technical rebound", but I'm not a believer in storing data in external devices to our computers. I believe we'll save everything in the hard disk and if we want to transport it, we'll just send it over the internet, using GlobalScape's products (http://www.globalscape.com/), for example.

GlobalScape is the future, Iomega is the past. Iomega's products will continue to be used, but not widely. The company needs to restructure its product offering to grow over the long term.

I can be wrong though, or not seeing the whole picture, good luck :)

David, could you please study CXPO?

I see a low share count stock, under decent accumulation, because of recent turn around in EPS because of a new gas well.

Quote from: ygtrdr on September 17, 2007, 09:39:21 AM
Morning David, or in your case, good afternoon!

FSTR please.

thanks.

1. Profile

L. B. Foster Company (FSTR) engages in the manufacture, fabrication, and distribution of products for the rail, construction, energy, and utility markets in the United States. It operates in three segments: Rail Products, Construction Products, and Tubular Products. The Rail Products segment provides heavy and light rail, relay rail, concrete ties, insulated rail joints, rail accessories, and transit products to industrial plants, contractors, railroads, mines, and mass transit systems. Rail accessories include trackwork, ties, track spikes, bolts, angle bars, and other products to install or maintain rail lines; and transit products consist of power rail, direct fixation fasteners, coverboards, and special accessories primarily for mass transit systems. The Construction Products segment offers sheet, pipe, and bearing piling products for public works and the private sector; fabricated highway products, such as fabricated structural steel, bridge decking, aluminum and steel bridge rail, and other bridge products to contractors for state, municipal, and other governmental projects; and precast concrete buildings to national and state parks. The Tubular Products segment provides fusion bond and other coatings for corrosion protection on oil, gas, and other pipelines; supplies special pipe products, such as water well casing, column pipe, couplings, and related products for agricultural, municipal, and industrial water wells; and sells micropiles for construction foundation repair and slope stabilization. The company was founded in 1902 and is headquartered in Pittsburgh, Pennsylvania.

2. Stock's History

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41093;image)

It's amazing how this stock didn't participate in the 1982-2000 bull market, the biggest in the US history, and then made a 10 fold rise in the five years between 2002 and 2007.

The current market cap is still about $500 M, so still just a medium size company.

I see the fundamental improvement since 2002, with revenue rising from $257 M (http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?Symbol=fstr&lstStatement=10YearSummary&stmtView=Ann) to $502 M expected for 2007. EPS rose from $0.35 in 2003 to $1.71 expected for 2007 and $2.18 for 2008 (http://finance.yahoo.com/q/ae?s=FSTR).

The stock traded at about 10 times earnings for most of its past, and now it is trading at 27.6 times 2007 estimates. It's natural that after a 10 fold advance the stock isn't cheap anymore.

3. Short term chart

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41094;image)

What a remarkable advance for FSTR, a basic materials company, and the US economy is weak, so they say. The 2nd quarter results were particularly strong:

• L.B. Foster Reports Record Second Quarter (http://biz.yahoo.com/prnews/070726/neth028.html?.v=12)
PR Newswire (Thu, Jul 26)

Then there was this terrific news on September 5:

• Foster Announces Sale of DM&E Interest (http://biz.yahoo.com/prnews/070905/new075.html?.v=20)
PR Newswire (Wed, Sep 5)

FSTR was up 10.8% on this big news day and kept going higher since then. This transaction brings the following amount to FSTR:

«For Foster, the acquisition will result in a payment of approximately $151.5 million at closing ($14.24/share), approximately $41.6 million ($3.90/share) upon commencement of construction of the PRB, and up to $84.2 million ($7.90/share) upon achieving milestones related to PRB coal tonnage thresholds.»

Management intends to use the cash to:

"The proceeds generated from this transaction will be used to pay down certain debt and help fuel key long term strategic growth initiatives designed to bring continued profitability and maximize value to our shareholders", Mr. Hasselbusch concluded.

If we sum it all up, it gives FSTR $277 M in cash. I'll discount the $55 M in non-current debt and get $222 M in cash. This is $20.89 cash per share.

If we take out these $20.89 of cash of the current share price, we get $26.27. Divided by the $2.18 EPS expected for 2008 we get an earnings multiple of 12, which is attractive, for a company expected to grow earnings by 27.5% in 2008.

4. Conclusion

I don't get overly excited about buying a stock after rising 10 fold in just five years, but as Livermore says, no stock is too high to begin buying or too low to begin selling.

My overall opinion on FSTR is positive, good luck ygtrdr and BigSully1 :)

David,
Could you pls take a look at HLIT?? looks very interesting..Im adding here under 12..

http://biz.yahoo.com/ibd/071012/tech01.html?.v=1

I'll spend some time on it tonight, and let u know more.
Thanks,
Nick

David,

ACH and YZC are doing very well, how long do you think this will last??
Pls take a look at them.

Nick'

I bought 2000 shares in August for 8.38.  This is one that David bought and sold in January, you will find it under closed trades.  I made a bunch of money on this company in 1999 and have been following it again since David gave his analysis in January and decided to buy it again as well as others during the August swoon.  David thanks for all your hard work.  I am still patiently waiting for your analysis on SIMG.

Poli

Quote from: Jim897 on September 20, 2007, 12:41:41 PM
David,

Please at least take a look at SIMC sometime soon.  It has been rising rapidly lately and will probably continue to do so for a while.  As I said earlier:

trading at a forward P/E of about 8 and a P/S of less than 0.5.

1. Profile

Simclar, Inc. (SIMC) operates as a contract manufacturer of electronic and electro-mechanical products primarily in the United States. It provides electronics manufacturing services to original equipment manufacturers in the data processing, telecommunications, instrumentation, and food preparation equipment industries. The company offers printed circuit boards (PCBs), finished products, subassemblies, molded and nonmolded cable assemblies, wire harnesses, injection molded, and electronic assembly products. Simclar provides a range of PCB products, such as pin-through-hole assemblies, and low and medium volume surface mount technology assemblies; and mixed technology PCBs, which include multilayer PCBs. It also offers cable and harness assemblies, such as multiconductor, ribbon, coaxial cable, and discrete wire harness assemblies. In addition, Simclar offers contract manufacturing, and systems assembly and integration services, as well as delivers test engineering and materials management services. Further, it provides reworking and refurbishing services, which comprise redesign, rework, refurbish, and repair of materials and subassemblies; backplane interconnect solutions to customers in the markets as such as network, wireline and wireless infrastructure, and defense and electronic data processing; and manufacturing services that includes computer integrated manufacturing and engineering services, quick-turnaround manufacturing and prototype development, materials procurement, inventory management, developing customer oriented manufacturing processes, and tooling and test sequences. The company was founded in 1976. It was formerly known as Techdyne, Inc. and changed its name to Simclar, Inc. in 2003. Simclar is based in Hialeah, Florida. Simclar, Inc. is a subsidiary of Simclar Group Limited.

2. Stock's History

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41131;image)

It's curious to note that SIMC went down in the 1996-2000 period, while the general market was booming. I guess this happened because EPS went down from $0.27 in 1995 to ($0.43) in 2001.

Since 2001, even though not in a linear way, fundamentals improved substantially, with revenues rising from $36 M to about $136 M expected for 2007, and EPS rising to $0.44 in 2006 and about $0.62 expected for 2007 (this estimate was made just by doubling what the company achieved in the 1st half, there are no analysts covering the stock - later in the analysis I've changed this expectation).

The current market cap is $72 M.

3. Short Term Chart

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41132;image)

We can see on this short term chart that the all time high around $13.85 has been a tough resistance. But let's study what happened in the pivotal points marked with numbers:

1) On May 15, 2006, SIMC rose 19.7% on volume above average of 439,300 shares. This happened because the company filed its 10-Q for the 1st quarter (http://www.sec.gov/Archives/edgar/data/764039/000114420406020360/v043200_10q.htm), showing revenue rising 78% from the year ago level and EPS rising to $0.11 from $0.05. With $0.11 in one quarter investors thought $0.44 for a full year (which later proved to be accurate), so the stock closed at $5.7/$0.44 = 13 times earnings on that day, which was attractive.

Eventually it went as high as $13.85, or 31.5 times earnings, which was somewhat expensive.

2) On August 15, 2006, the stock plunged 35% due to the following news:

«Simclar, Inc. is unable to file on a timely basis its Form 10-Q for the
quarter ended June 30, 2006 due to the discovery of accounting errors in its
Mexican operations during 2005 and the first quarter of 2006. The Company has
not yet been able to conclude whether these errors had a material effect on its
financial statements included in the Company's quarterly report on Form 10-Q for
the quarter ended March 31, 2006 or its annual report on Form 10-K for 2005.
The Company's efforts to identify and correct those errors necessarily affect
its ability to prepare and file on a timely basis its quarterly report on Form
10-Q for the quarter ended June 30, 2006, both because of the diversion of the
time and effort of its accounting staff to the identification and correction of
the errors, and also because such corrections may affect the preparation of its
financial statements for the second quarter.»

The previous rise was put into question and the stock came off to the previous level.

3) Then, on October 12, 2006, SIMC rose 76% :o. The news was:

• SIMCLAR INC Files SEC form 8-K/A, Results of Operations and Financial Condition, Non-Reliance on Previous Financials, (http://biz.yahoo.com/e/061012/simc8-k_a.html)
EDGAR Online (Thu, Oct 12)

They made the following adjustments:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41133;image)

Because Q1 EPS was revised down from $0.11 to $0.08, expectations for the full year went down to $0.32, so at that day's close of $8.94, the stock was trading at 28 times earnings, which is expensive for a company making accounting errors and saying it has deficient internal controls. The stock came off to completely close the gap originated by the 76% one day rise.

4) On April 2, 2007, SIMC had another gap up, this one of smaller proportions, on the following news ... actually, there weren't any news on that day, at least not released by SIMC, perhaps it was some competitor's news or something. Anyway, in a few weeks time that gap was also closed.

5) The current advance phase, which took the stock from a low of $5.27 to a high of $14.14, had the following catalyst:

• Simclar, Inc. Announces Results for Second Quarter 2007 (http://biz.yahoo.com/pz/070814/124965.html)
PrimeNewswire (Tue, Aug 14)

«Net income for the three months ended June 30, 2007 was $1,372,346 or $0.21 per share, compared to $709,033 or $0.12 per share in the same period in 2006.»

Naturally, with $0.21 EPS in one quarter investors immediately saw $0.84 for a full year, and with the stock trading at $6 when the news was out, inevitably it had to go higher, since the perceived earnings multiple was just 7. With the stock at $14 the multiple rose to 17, so that coupled with the $13.85 resistance level given by the previous all time high was enough to motivate bears to take the stock down to a low of $10.1 on Tuesday.

SIMC closed at $11.13 yesterday, so, with the current information of that one single quarter and extrapolating that for a full year, the current valuation is 13.25 times earnings, which is below the historical average. I guess investors, because they were bruised before, have attached a lower earnings multiple to Simclair, because of the fluctuations in revenue and earnings.

4. Conclusion

SIMC looks cheap at this point and if it can have a more stable fundamental improvement it will certainly rise. Investors have been positively and negatively surprised by this company a lot in the past, and that partially explains the low valuation of the company, despite its strong EPS growth.

Anyway, looking at SIMC's business, number of employees, revenue level and competitors (http://finance.yahoo.com/q/co?s=SIMC) I must say that it doesn't look like it's worth just $72 M. I say that with the current fundamental information the stock looks undervalued and it is bound to go higher.

Good luck if you own it Jim897 :)

David, a while ago when you started the video portfolio, you said you planned to expand the main portfolio to 20 stocks in 2008, is that still the plan? I am considering to "fit" my portfolio to the main entirely now, or leaving some cash by the end of 2007 in anticipation for the other 5.

Thanks.

Quote from: realcoolhead on October 18, 2007, 08:41:13 AM
David, a while ago when you started the video portfolio, you said you planned to expand the main portfolio to 20 stocks in 2008, is that still the plan? I am considering to "fit" my portfolio to the main entirely now, or leaving some cash by the end of 2007 in anticipation for the other 5.

Thanks.

That's an excellent idea realcoolhead, thanks for reminding :)

I like it specially because I'm getting tired of writing 15 daily updates ... I like it a lot more to cover new stocks. I would start writing two new analysis per trading day, instead of one, as I look for new picks, and would only select 5 holdings to be updated, according to if there were meaningful price swings, relevant news out or a change in the trading plan.

But I don't think the reward/risk ratio changes much with 20 stocks instead of 15. I believe 15 holdings is diversified enough ... it is actually quite balanced in my view (I also read a study on the subject some years ago, which concluded that 15 different holdings was the ideal number for an individual investor portfolio). Anyway, 20 sounds fine too. 

Thanks for the suggestion, I'll probably follow it, I'll just have to talk to Ramsburg before any strategic changes. I'll let you know.

Quote from: poli on September 20, 2007, 04:30:33 PM
David: 

When you get a chance could you take a look at SIMG and see what you think?  I bought some in the mid 5's.

Thanks, Poli

1. Profile

Silicon Image, Inc. (SIMG) engages in the design, development, and implementation of semiconductors for the secure storage, distribution, and presentation of digital content. The company's solutions facilitate movement of digital content between and among digital devices across the consumer electronics, personal computers (PC), and storage markets. Its products are used in various devices, including digital television, digital versatile disc (DVD) players, high definition and Blu-ray DVD recorders, set-top boxes, audio/video receivers, game consoles, high definition camcorders, and digital still cameras. The company offers various consumer electronics products, including high-definition multimedia interface transmitters and receivers, as well as products that connect PCs to digital displays. It also offers storage controllers, bridges, and processors. The company markets its products to the consumer electronics, personal computer, display, and storage markets. It also provides semiconductor intellectual property solutions for digital multimedia and data storage applications. The company sells its products to distributors and original equipment manufactures worldwide directly through direct sales force; and indirectly through a network of distributors and manufacturer's representatives. Silicon Image has strategic relationships with Hollywood studios, such as Universal, Warner Brothers, Disney, and Fox; and consumer electronics companies, such as Sony, Hitachi, Toshiba, Matsushita, Phillips, and Thomson. The company was founded in 1995 and is headquartered in Sunnyvale, California.

2. SIMG's history

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41189;image)

We can identify 4 phases in terms of stock price for SIMG:

Red - It was the technology bubble run, with SIMG rising from its debut price of $11.5, in October, 6, 1999, to a high of $66 in February 16, 2000, a 474% advance in five months.

Back in 1999 the company had $21 M in revenue and $7 M in losses. The share count was 51.5 million (http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?Symbol=simg&lstStatement=10YearSummary&stmtView=Ann), so at its high the market cap was 51.5*$66 = $3.4 B, incredible.

Blue - The inevitable collapse came, and SIMG fell 98.4% to an all time low of $1.03, set in October 23, 2001. Fundamentally things got really bad, with 2001 revenue at $51 M and losses at $76 M. However, the bad fundamentals seemed priced in, as the market cap at the low point was 63.5*$1.03 = $65 M.

Green - Then a recovery phase, with SIMG rising almost 18 fold between late 2001 and late 2004. Revenue rose from $51 M to $173 M in 2004. There weren't any more losses, as the company posted break even results. The market cap at the 2004 high was 78.1*$18.37 = $1.4 B. The Price to Sales Ratio was quite high, at 8.1.

Yellow - Somewhat strangely, the stock started trending down again. I say that's strange because fundamentals kept improving. Probably it was just that the stock got too expensive and couldn't keep up with expectations.

In October 16, 2006, SIMG still closed at $14.52, so let's take a closer look at what happened since then.

3. SIMG's short term chart

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41190;image)

I want to know what was the cause for the wild price swings and huge volume in points 1, 2 and 3:

1 - On October 27, 2006, SIMG fell 17%, with 6.5 million shares changing hands. The news out that day was:

• Silicon Image Warns (http://us.rd.yahoo.com/finance/external/tsmfe/SIG=126jfi8hs/*http://www.thestreet.com/_yahoo/newsanalysis/techsemis/10317992.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA)
at TheStreet.com (Thu, Oct 26)

Because the company blamed seasonality for the revenue weakness, the stock came back up to close the gap over the next few weeks. However ...

2 - The actual results for the 4th quarter 2006 came in weaker than expected and 2007 guidance was cut. The stock dived 24% to $9.24.

3 - On August 3, 2007, SIMG fell 25.3% with 9.2 million shares volume, due to the following news release:

• Silicon Image Reports Second Quarter Results (http://biz.yahoo.com/prnews/070802/aqth138.html?.v=10)
PR Newswire (Thu, Aug 2)

Guidance was the main problem:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41191;image)

Anyway, with analysts expecting $311 M revenue in 2007 and $338 M in 2008:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41192;image)

... this gives me a Price to Sales Ratio of 1.7, which is well below the 8 the company achieved at its 2004 high, and much more closer to the sales multiple it had at its low point ($1.03 in late 2001, when the sales multiple was 1.27).

4. Valuation Model

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41193;image)

According to my fundamental estimates, I would expect SIMG to recover back up to $11.34 in late 2010, rising 22% a year, on average. Given this, the optimal selling price today (the price where the expected return would fall below 16% a year), calculated by the model, is $7.25, that is, 16% above where it is now.

5. Conclusion

I believe SIMG is moderately attractive at this point, good luck poli :)

Quote from: Jim897 on September 21, 2007, 08:40:04 AM
David, here's another stock that I'd like you to analyze, UTVG.  It is a great growth story.  It is a leading air travel and air cargo transportation agency in Southern China.  The company (or analysts - I'm not sure which) is estimating .24 eps for 2007 and analysts are estimating .39 for 2008.  It currently trades at 3.45 and has been very bullish lately.

Yeah, I know that stock. I've covered it when it was trading at $0.9 and I was very positive on it (http://www.3stocksonfire.org/trading/index.php?topic=8906.msg87936#msg87936), but failed to buy it :-[ (it was very thinly traded back then).

1. Profile

Universal Travel Group (UTVG.OB) provides domestic and international airline ticketing services and cargo transportation agency services primarily in the People's Republic of China. It also offers hotel reservations, packaged tours, and air delivering services. In addition, Universal Travel Group owns an aviation network, cnutg.com, which provides an air tickets sales network. The company is based in Los Angeles, California.

2. UTVG's stock market history

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41467;image)

Man, UTVG.OB is up six fold since my initial analysis (http://www.3stocksonfire.org/trading/index.php?topic=8906.msg87936#msg87936), what a miss :-X

Let's see what we have now. The current market cap is 34,934,285*$5.54 = $193.5 M.

I see the company made several acquisitions recently:

• Universal Travel Group Announces Closing of the Acquisition of Xi'an Golden Net Travel Serve Service Co., Ltd. (http://biz.yahoo.com/prnews/070806/nem043.html?.v=16)
PR Newswire (Mon, Aug 6)

«The price for the acquisition was $1,800,000, of which $1,542,000 was paid in cash. The remaining $258,000 was satisfied by the issuance of 151,765 shares of newly issued Universal Travel Common Stock.»

«The company had revenue of $5,500,000 and net income of $490,000 for 2006, and expects an 80% increase in revenue and net income for 2007.»

3.7 P/E ratio :)

• Universal Travel Group Announces Closing of the Acquisition of Shanghai Lanbao Travel Service Co., Ltd. (http://biz.yahoo.com/prnews/070808/new040.html?.v=13)
PR Newswire (Wed, Aug 8)

«... announced today that it has completed the acquisition of Shanghai Lanbao Travel Service Co., Ltd. for US $3.920 million, of which $2.828 million was paid in cash and the remaining $1.092 million was satisfied by the issuance of 600,000 shares of newly issued Universal Travel Common Stock.»

«The company reported US $1.1 million in revenue and US $730,000 in net income for 2006.»

Net profit margin of 66% :o Earnings multiple paid was 5.4.

«"Due to the completion of these two acquisitions, we revised our previously announced guidance. We now expect to report 2007 revenue in the range of approximately $35 million to $36 million, up 250% to 260% from $10.01 million reported in fiscal year 2006. Net income for the 2007 fiscal year is expected to be in the range of $8.2 million to $8.5 million, or $0.23 to $0.24 earnings per share, an increase of 222% to 233% from $2.55 million reported in fiscal year 2006."»

WOW!

I'm dizzy, I really am, with this company's potential and my huge miss when it was trading at $0.9.

• Universal Travel Group Newly-acquired Subsidiary Xi'an Golden Net Reports $4.4M Revenue for the First Six Months of FY '07 (http://biz.yahoo.com/prnews/070918/netu020a.html?.v=1)
PR Newswire (Tue, Sep 18)

• Universal Travel Signs Agreement to Acquire Foshan Overseas International Travel Service Co. Ltd. (http://biz.yahoo.com/prnews/070921/nef037.html?.v=17)
PR Newswire (Fri, Sep 21)

«The price for the acquisition will be $6.5 million, of which $3.15 million will be paid in cash. The remaining $3,346,500 will be satisfied by the issuance of 1,122,986 shares of Universal Travel stock.»

«Foshan reported unaudited sales revenues of $11.9 million in FY 2006 with a net income of $930,000.»

So, the P/E of this acquisition was 7. Still cheap.

• Universal Travel Group Signs Agreement to Acquire 90% of Tianjin Golden Dragon International Travel Service Company (http://biz.yahoo.com/prnews/071017/new140.html?.v=5)
PR Newswire (Wed, Oct 17)

«The purchase price for this majority stake will be $7,889,000, of which $3,600,000 will be paid in cash and $4,289,000 will be satisfied by the issuance of 1,053,800 shares of Universal Travel stock.»

(the share part used to pay for the acquisitions is increasing).

«The company reported unaudited sales revenue of $16.17 million and net income of $1.13 million in FY'06.»

Again, P/E paid was 7.

«Jiang continued, "We estimate that the packaged tours segment will contribute about a substantial amount of Universal Travel Group's revenue. At present, China's tourism market demand is $150 billion, with a projected increase of 10% in the next five years. This represents broad development prospects for our company and a wonderful opportunity for further growth. In addition, we believe that the 2008 Beijing Olympics will further boost the overall business performance of UTVG."»

3. Valuation Model

I've derived some rough estimates, which are my best guess into this company's prospects:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41468;image)

According to my estimates, UTVG still looks extremely attractive, even after a 6 fold advance in less than a year.

4. Conclusion

I've never seen a company growing so rapidly, through organic growth and acquisitions, as UTVG. The way I see it, management has been buying fast growing and very profitable companies for as low as 7 times annual earnings or less. US stock market investors are willing to pay at least triple for the same companies.

It is somewhat annoying to buy a stock 500% plus higher than I could have bought in the beginning of the year, but given the fundamental information there's nothing else I can do but buy UTVG.OB as soon as possible.

Trading Plan:

Buy UTVG.OB, 6.66% of capital as usual.

David:  As a paying premium member, I would like to see more analyses on demand.  Maybe we could even go back to the one per day and the voting system.  I know it takes time to analyze these stocks, but 1 per day is feasible, right?

Quote from: realcoolhead on September 21, 2007, 11:37:16 PM
SIGM, this stock seems holding up very well during the latest pullback.

David, care to comment on this? I got SIGM from this guy, and his talking fits your thesis pretty well ...

http://www.changewave.com/freecontent/2007/09/freetobymain20070919.html

Yes, I fully agree with the macro views inside this article. And SIGM has been doing reasonably well :)

1. Profile

Sigma Designs, Inc. (SIGM) offers silicon-based digital media processors primarily for Internet protocol (IP) video technology, connected media players, high-definition televisions, and personal computers add-in and other markets. Its REALmagic video streaming technology is used in various consumer applications providing integrated solutions for decoding of H.264, MPEG-4, MPEG-2, MPEG-1, and Windows Media Video 9. The company offers silicon-based media processors for Internet protocol television set-top boxes, digital media receivers, high definition DVD players, high definition television, and portable media players. It also provides video and audio decoding chips under the names of EM8400 series, EM8500 series, EM8610 series, EM8620L series, and SMP8630 series for the IP video technology market and connected media player market, as well as the PC add-in market. In addition, the company offers development kits, engineering support services, and chipset customization engineering development. Sigma Designs sells its products to consumer equipment manufacturers, distributors, value-added resellers, and corporate customers through direct sales force and distributors. The company was founded in 1982 and is headquartered in Milpitas, California.

2. SIGM's History

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41489;image)

SIGM traded within a range for twenty years, between roughly $5 and $20. It broke out of this 20 year old range in late 2006, and more upside followed.

I notice that the share count doubled between 1998 and 2007 and the current market cap is 24,398,318*$58.59 = $1.43 B.

I think the crucial question in SIGM's historical analysis is: "What was the catalyst for the late 2006 breakout?"

As usual, the answer is given by a change in the fundamentals. Revenues were more or less flat for 10 years, but in 2006 quarterly revenues and profits began to improve dramatically:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41490;image)

3. Recent Developments

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41491;image)

I've selected points 1 and 2 to get a feel of which are the news driving the stock higher:

1 - In August 30, 2006, SIGM rose 17% to $13.73, on volume of 4.3 million shares. The news out that day was:

SIGMA DESIGNS, INC. REPORTS SECOND QUARTER RESULTS (http://www.sec.gov/Archives/edgar/data/790715/000126645406000395/sigma_8k-ex9901.htm)

«Net revenues for the second quarter were $20.1 million, up 36% from $14.8 million for the previous quarter and up 153% from $8.0 million reported for the same period last year. The increase in revenue and selected financial results was primarily attributable to increased chipset sales to manufacturers of IPTV set-top boxes.»

«"We are pleased to report another 36% sequential increase in revenue resulting in a year-over-year revenue growth of 153%. This further demonstrates the inflection point in demand for IPTV based deployments at a widening set of telco carriers as well as Sigma's dominance in this market. We are now shipping media processor chips for volume consumption in every major region of the world and believe that our SMP8634 chipset is becoming a defacto standard for IPTV set-top boxes.»

2 - Exactly one year later, in August 30, 2007, SIGM rose 10.5% on 10.5 million shares changing hands, due to the following news:

• Sigma Designs, Inc. Reports Second Quarter Results (http://biz.yahoo.com/bw/070829/20070829005999.html?.v=1)
Business Wire (Wed, Aug 29)

«The increase in net revenues was primarily attributable to increased SoC sales to manufacturers of IPTV set-top boxes, Blu-ray Players, and HDTVs. Net revenues for the first two quarters of fiscal year 2008 were $78.6 million, up 125% from $34.9 million for the same period in the prior fiscal year.»

So, after 20 years asleep, SIGM landed a very fast growing market, chips for IPTV set top boxes. It appears telcos want to replace cable companies in our homes, through IPTV. I saw some commercials here in Portugal, with Sonaecom (a mobile phone operator), offering TV in a similar way cable does, and thought it was strange, but now I see it had to do with IPTV already being in the marketplace.

4. Valuation

There's no doubt SIGM is in a very hot sector and it has been growing revenues and profits in a spectacular way. The stock reflected this growth by rising 500% over the last 12 months. The question now is: "Is there more to come or SIGM is fully valued now?"

To try answering this question first let me consider analysts estimates:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41492;image)

They're expecting $1.94 EPS in the fiscal year ending in January 31st, 2008. So the Price/Earnings Ratio is 30. I think the fiscal 2009 estimates are way too conservative, since they're expecting just 7.7% growth, which is ridiculous in my opinion. I think this sort of thing happens because analysts are fast in upgrading the current year estimates (due to positive earnings surprises), but they "forget" to raise next year's estimates as quickly:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41494;image)

As usual I'm going to use my valuation model and my best guesses to determine if SIGM is attractive and if so, by how much:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41495;image)

Considering 5% share count CAGR, 50% revenue CAGR, 25% net profit margin and 25 times earnings multiple, SIGM's shares will rise roughly 33% a year, to $137.65 three years from now.

And I'm being fairly aggressive in my estimates, because, let's see, I have 5% dilution factor, while the historical share count growth rate is 8.2%. I have 50% revenue CAGR, but analysts are expecting just 34% growth in fiscal 2009. I estimate net profit margin will remain at 25%, but in the latest earnings release management said the following:

«The Company expects a continued increase in demand for its products with over 20% growth in net revenues for the third quarter. The Company's gross margin target remains within 200 basis points of 50% with some variance expected due to the timing of its cost reduction efforts and pressure from its customers to lower its selling prices as their order levels grow.»

And an earnings multiple of 25 is above the general market average which is about 15.

5. Conclusion

33% a year is attractive, but considering my goals for the Main Portfolio, which are "at least 30% average annual growth", it just barely beats the objective. I need to own stocks which I expect to rise a lot more than 30% a year to compensate for the ones that will rise less, or not even rise at all.

The ideal time to buy SIGM was in August 2006 when the stock jumped above $13 on better than expected earnings, since back then it was already clear that was due to an emerging trend, IP TV.

Now, even though the stock is still quite attractive, it seems a bit late for my goals. I don't think making chips for IP TV set top boxes can ever be a $5 B business, $2 B - $3 B is the top in my opinion. And of course, there are risks (there are always risks), IP TV can be a flop, with not a lot of market acceptance, or there can be competition for SIGM's chips. Moreover, what happens after every potential consumer already has an IP TV set top box? While telcos providing the IP TV service have recurring revenues (monthly subscriptions), the set top box is sold only once every 5 years or more. This can put pressure in the earnings multiple in the future.

Balancing the potential and the risks I wont invest in SIGM's shares at this point, but good luck if you own it :)

Hi David,
I see, you know how to do research for compony
in tech sector.
Maybe not the SIGM but company from "internet TV" sectom
is very good.
In USA for TV cable is $50-150 a month,
for internet TV is $1.99-30 a month.
All computers manufacturs are sell computers with HDTV boards and wide
LCD monitors for HDTV
Thanks
Gogo

Hey David, check out new chinese IPO CISG. They sell underwritten insurance policies and as you know the insurance market in china has huge growth potential.

Hi David, could you possibly take a look at NM sometime if you think its worth it.

Cheers

uc.

Quote from: usedcasting on October 31, 2007, 11:57:58 AM
Hi David, could you possibly take a look at NM sometime if you think its worth it.

Cheers

uc.

NM looks very attractive at first sight, better than TBSI and EXM. Perhaps this will be my chance of getting back into the Shipping industry, thanks usedcasting :)

Quote from: David Randolph on October 31, 2007, 03:45:14 PM

Quote from: usedcasting on October 31, 2007, 11:57:58 AM
Hi David, could you possibly take a look at NM sometime if you think its worth it.

Cheers

uc.

NM looks very attractive at first sight, better than TBSI and EXM. Perhaps this will be my chance of getting back into the Shipping industry, thanks usedcasting :)

I was excited about NM and even though of buying it today, but when I saw the following heavy dilution ...

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41544;image)

... and further plans for a spin off:

• Navios Maritime Holdings Inc. Announces Filing of Registration Statement for Initial Public Offering by Navios Maritime Partners L.P. (http://biz.yahoo.com/prnews/071026/nyf085.html?.v=81)
PR Newswire (Fri, Oct 26)

I got less enthusiastic.

I'll have to take it easy and keep studying new stocks until I find the appropriate long term holdings for the Main Portfolio. I dislike when management has this tendency to dilute shareholders value, especially when they don't need to, as is NM's case.

David, thanks for the input. Yes I to saw that dilution. To bad.

Thanks again!

uc.

Hey David, This one looks real interesting. SPRD - Spreadtrum Communications. Chinese. Don't know anything about, just read the ER this morn.

Spreadtrum Communications, Inc. Announces Third Quarter 2007 Results: Robust Increase in Baseband Shipments Drove Strong Revenue Growth
Wednesday October 31, 4:05 pm ET 
Third Quarter 2007 Financial Summary: -- Total revenue increased 20% sequentially and 44% year-over-year to US$38.6 million. Baseband revenue grew 25% sequentially and 118% year-over-year. -- Gross margin increased to 45.6% in 3Q07 from 43.2% in 3Q06 and 45.5% in 2Q07. -- Operating margin increased to 11.7% in 3Q07 from 7.9% in 2Q07 but decreased from 13.8% in 3Q06. -- Net income increased 118% sequentially and 64% year-over-year to US$6.1 million. -- Diluted earnings per American Depositary Share (ADS) was US$0.13, up 86% from US$0.07 in 2Q07 and 18% from US$0.11 in 3Q06.
Third Quarter 2007 Business Highlights: -- The Company began sampling its SC6600H product, a new baseband chip that is optimized for the music mobile phone with high-quality music playback functionality that enables CD sound quality playback. -- The Company began sampling its SC6600R product, a new high performance baseband chip with high-end functions that is targeted at the mainstream mobile phone market. -- The Company began sampling its SV6111 product, which the Company believes is the world's first commercial AVS audio/video decoder chip. -- Set-top boxes using the Company's SV6111 chip successfully passed China Netcom's commercial trials. -- The Company entered into a TD-SCDMA strategic partnership agreement with Zhongxing Telecommunication Equipment Co., Ltd (ZTE). -- The Company hosted its first Technology Forum in Shanghai, at which the Company and its customers, suppliers, and business partners convened to exchange thoughts and perspectives on, among other topics, recent achievements, market trends, and strategies for future growth and development in China's wireless semiconductor and communications industry.


SHANGHAI, China, Oct. 31 /Xinhua-PRNewswire/ -- Spreadtrum Communications, Inc. (Nasdaq: SPRD; the "Company"), a fabless semiconductor company that designs, develops, and markets baseband processor solutions for the mobile wireless communications market, today announced its third quarter 2007 financial results. Under accounting principles generally accepted in the United States of America (US GAAP), diluted earnings per ADS was US$0.13 in the third quarter of 2007 (3Q07), an increase of 18% from US$0.11 in the same period in 2006 (3Q06) and 86% from US$0.07 in the second quarter of 2007 (2Q07). Net income for 3Q07 was US$6.1 million, an increase of 64% from US$3.7 million in 3Q06 and 118% from US$2.8 million in 2Q07.
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US GAAP net income for 3Q07 included US$1.5 million of share-based compensation expense. Excluding the share-based compensation, the Company's non-GAAP net income for 3Q07 was US$7.6 million. Diluted non-GAAP earnings per ADS in 3Q07 was US$0.16.

Commenting on the results, the Company's President and CEO, Dr. Ping Wu, said:

"We are pleased with our performance in the third quarter. We have experienced two consecutive quarters of 37% growth in the shipments of our baseband semiconductors and believe that we are continuing to gain share in the Chinese mobile handset market. Our shipments of baseband semiconductors for the nine-month period already exceeded our shipments for all of last year.

On the new product front, the results of our recent strategic R&D investments became more apparent as we refreshed our portfolio with several product extensions that should position us well for next year. In the third quarter, we announced and began sampling three new chips--our SC6600H and SC6600R baseband chips and SV6111 AVS audio/video decoder chip. The SC6600H is designed to enable CD sound quality playback on music mobile phones, while the SC6600R is a high-performance, high-function baseband chip targeted at the mainstream mobile phone market. The SV6111, which we believe is the first decoder chip to support the Chinese AVS standard, successfully passed China Netcom's commercial trial tests in October.

On the 3G front, we continue to work towards the commercialization of the TD-SCDMA standard. We entered into a strategic partnership agreement with ZTE, the largest TD-SCDMA equipment supplier in the first phase of TD-SCDMA deployment. We are cooperating with ZTE in a number of projects designed to improve the functionality of TD-SCDMA system and terminals and introduce additional TD-SCDMA commercial products. This month, we announced sampling of our SC8800S chip, a TD-SCDMA/GSM dual-mode baseband chip designed to support HSDPA/EDGE and dedicated for the data card market. Also in this month, ZTE used our TD-SCDMA baseband to demonstrate the feasibility of multimedia broadcast multicast services (MBMS) over a TD-SCDMA network."

Third Quarter 2007 Financial Review

Revenue

Revenue in the third quarter totaled US$38.6 million, representing increases of 44% from 3Q06 and 20% from 2Q07. Revenue from baseband semiconductors was US$34.2 million, or 89% of revenue, up from 59% of revenue in 3Q06 and 85% of revenue in 2Q07. Revenue from turnkey solutions was US$4.4 million, which represented 11% of revenue, down from 41% of revenue in 3Q06 and 15% of revenue in 2Q07.

Revenue from baseband semiconductors increased by 118% from 3Q06 and 25% from 2Q07 to US$34.2 million. Unit shipments of baseband semiconductors increased by 37% from 2Q07. Nearly all baseband semiconductor shipments in the third quarter were 2G/2.5G related products. The average selling price per unit for baseband semiconductors declined by 9% from 2Q07.

Revenue from turnkey solutions decreased by 60% from 3Q06 and 9% from 2Q07 to US$4.4 million, as a result of the Company's prior decision to phase out its SP7000 series handset boards by the end of 2006 and gradually phase out its SM5100 series modules.

Gross Margin

The gross margin for the quarter was 45.6%, up from 43.2% in 3Q06 and flat from 45.5% in 2Q07. This margin improvement from the same period in 2006 was primarily due to a more favorable revenue mix from baseband products, as the Company continues to gradually phase out its lower margin turnkey solutions. The cost of revenue in 3Q07 totaled US$21.0 million, representing increases of 38% and 20% from 3Q06 and 2Q07, respectively. The year-over-year increase in absolute dollars was driven by an increase in the total cost of baseband semiconductors from higher volumes partially offset by a decline in the total cost of turnkey solutions. The total cost of turnkey solutions declined as the Company phased out its SP7000 series handset board business by the end of 2006 and continued to de-emphasize its SM5100 series module business. The sequential increase was driven by an increase in total wafer fabrication and assembly and testing costs as a result of the 37% increase in baseband unit volume from 2Q07.

The non-GAAP gross margin was 45.7%, up from 43.4% in 3Q06 and unchanged from 2Q07.

Operating Expenses

Total operating expenses in 3Q07, which include selling, general and administrative (SG&A) expenses and research and development (R&D) expenses, were US$13.1 million, representing increases of 66% from 3Q06 and 8% from 2Q07. Excluding the share-based compensation expense, total operating expenses increased 62% year-over-year and 9% sequentially.

Total operating expenses for the quarter represented 33.9% of revenue, compared to 29.4% and 37.6% of revenue in 3Q06 and 2Q07, respectively. The Company's operating margin decreased from 13.8% in 3Q06 but increased from 7.9% in 2Q07 to 11.7% in 3Q07. The year-over-year decline in operating margin was due to higher R&D expenses as a result of the Company's strategic decision to expand its product portfolio. The non-GAAP operating margin in 3Q07 was 15.7%, down from 16.7% in 3Q06 but up from 12.6% in 2Q07.

SG&A expenses in 3Q07 increased by 39% from 3Q06 and decreased by 2% from 2Q07 and represented 10.5% of revenue, down from 10.9% of revenue in 3Q06 and 12.9% of revenue in 2Q07. The year-over-year dollar increase was driven primarily by higher salary and benefits as a result of headcount addition, especially at the senior management level, share-based compensation expense, depreciation, insurance, business tax, and shipping expense. The sequential dollar decrease was driven primarily by decreases in business tax expense and professional fees, partially offset by higher salary and benefits, insurance, and other administrative expenses.

R&D expenses in 3Q07 increased 82% year-over-year and 13% sequentially and represented 23.3% of revenue in 3Q07, compared to 18.5% in 3Q06 and 24.7% in 2Q07. The year-over-year dollar increase was driven primarily by the Company's efforts to expand its product portfolio, and this increase included higher salary and benefits, share-based compensation expense, tape-out expense, depreciation and amortization expense, and travel expense. The sequential dollar increase was primarily driven by higher salary and benefits, depreciation and amortization expense, travel expense, and utilities expenses.

Non-Operating Income

In 3Q07, the Company recorded net interest income of US$1.7 million, representing increases of US$1.5 million from 3Q06 and US$1.4 million from 2Q07. The increases were primarily attributed to interest earned from investing the higher balance of cash and cash equivalents arising from the Company's initial public offering.

Earnings

The Company's net income totaled US$6.1 million in 3Q07, an increase of 64% from US$3.7 million in 3Q06 and 118% from US$2.8 million in 2Q07. The net margin was 15.7%, up from 13.9% in 3Q06 and 8.6% in 2Q07. Diluted earnings per ADS was US$0.13, up 18% from US$0.11 in 3Q06 and 86% from US$0.07 in 2Q07.

Non-GAAP diluted earnings per ADS for 3Q07 was US$0.16, up from US$0.13 in 3Q06 and US$0.11 in 2Q07.

Balance Sheet

As of September 30, 2007, the Company had US$147.0 million in cash and cash equivalents, which represented an increase of US$105.6 million from June 30, 2007. The Company's initial public offering, which settlement took place in early July, contributed US$100.0 million of this increase. Accounts receivable (A/R) decreased from US$6.7 million at June 30, 2007 to US$3.0 million at September 30, 2007, and the average A/R days decreased from 25 days to 11 days. Inventory at September 30, 2007 was US$15.0 million, fairly comparable with the inventory at June 30, 2007, and the inventory days decreased from 77 days to 65 days. Total assets as of September 30, 2007 were US$215.5 million, up 95% from US$110.3 million at June 30, 2007.

Current liabilities decreased from US$38.5 million at June 30, 2007 to US$35.5 million at September 30, 2007, primarily due to a decrease in accounts payable. Long-term liabilities at September 30, 2007 were US$4.8 million, compared to US$4.3 million at June 30, 2007. The increase was primarily due to an increase in long-term payable related to acquired intangibles.

On July 2, 2007, the Company issued 8 million ADSs, or 24 million ordinary shares, in connection with its initial public offering. There were approximately 126.6 million ordinary shares outstanding at September 30, 2007, equivalent to approximately 42.2 million American Depositary Shares. The weighted average diluted share count in the third quarter was 46.9 million ADSs.

Cash Flow

In 3Q07, the Company generated US$17.2 million cash from operating activities. The Company also spent US$6.9 million on property and equipment, of which approximately US$5.7 million represented the final payment for the Company's current headquarters building, and US$1.6 million on intangible assets. In addition, the Company spent approximately US$3.0 million on the final installment of its purchase of land use rights for a parcel of land near its current headquarters building. Cash and cash equivalents balance at September 30, 2007 increased by US$105.6 million as compared to balance as of June 30, 2007. US$100.0 million of this increase came from the net proceeds of the Company's initial public offering.

Business Outlook:

The Company currently expects revenue in the fourth quarter of 2007 to be approximately US$46 million to US$47 million, which represents a sequential increase of 19% to 22% from US$38.6 million in the third quarter of 2007. The Company estimates that its operating margin will likely increase from 11.7% in 3Q07 to slightly over 13% in 4Q07.

Webcast of Conference Call:

The Company's management team will conduct a conference call at 6:00 pm Eastern Time on October 31, 2007. A webcast of the conference call will be accessible on the Company's web site at http://www.spreadtrum.com. The conference call can also be accessed via the following telephone numbers:


     USA (Toll Free):       +1-866-679-8035
     USA (Toll):            +1-617-213-4848
     Hong Kong (Toll Free): 800-962-844
     China (Toll Free):     10-800-130-0399
     Participant Passcode:  8804 0657

A replay of the conference call will be available for seven days via the following telephone numbers:


     USA (Toll Free):       +1-888-286-8010
     USA (Toll):            +1-617-801-6888
     Participant Passcode:  5949 5354

Discussion of Non-GAAP Financial Measures

In addition to disclosing financial results prepared in accordance with US GAAP, the Company's earnings release contains non-GAAP financial measures that exclude the effects of share-based compensation. The non-GAAP financial measures used by management and disclosed by the Company exclude the income statement effects of all forms of share-based compensation.

The non-GAAP financial measures disclosed by the Company should not be considered a substitute for financial measures prepared in accordance with US GAAP. The financial results reported in accordance with US GAAP and reconciliation of GAAP to non-GAAP results should be carefully evaluated. The non-GAAP financial measures used by the Company may be prepared differently from and, therefore, may not be comparable to similarly titled measures used by other companies.

The Company believes that the presentation of non-GAAP gross margin, non- GAAP operating margin, non-GAAP net income, and non-GAAP diluted earnings per ADS provides important supplemental information to management and investors regarding financial and business trends relating to the Company's financial condition and results of operations. The non-GAAP diluted earnings per ADS is calculated by dividing non-GAAP net income by the US GAAP weighted average diluted shares outstanding.

Listed below are share-based compensation amounts included in net income that management excludes in computing the non-GAAP financial measures referred

to in the text of this press release. A reconciliation of GAAP to non-GAAP results is presented after the consolidated balance sheets.


                                       Three months ended
                         September 30, 2006  June 30, 2007  September 30, 2007
                                  (in thousands of US dollars)

  Share-based compensation:
     Cost of revenue              $  44          $  52               $  54
     Research and development       385            563                 582
     Selling, general, and
      Administrative                333            904                 891



                       Spreadtrum Communications, Inc.
                        Consolidated Income Statements
     (in thousands of US dollars, except per share data and percentages)
                                 (unaudited)

                                       Three months ended         Change from
                              September    June 30,   September    3Q06   2Q07
                               30, 2006        2007    30, 2007

    Revenue                     $26,701     $32,187     $38,570     44%    20%
    Cost of revenue              15,161      17,543      20,996     38%    20%
    Gross profit                 11,540      14,644      17,574     52%    20%
    Operating expenses
       Research & development     4,945       7,952       8,997     82%    13%
       Selling, general &
        administrative            2,914       4,149       4,059     39%   (2)%
       Total operating
        expenses                  7,859      12,101      13,056     66%     8%
    Operating income              3,681       2,543       4,518     23%    78%
    Non-operating income
     (expense)
       Interest income              134         299       1,676   1151%   461%
       Interest expense              (5)         (6)        (18)   260%   200%
       Other income, net            207         116         347     68%   199%
       Total non-operating
        income                      336         409       2,005    497%   390%
    Income before tax             4,017       2,952       6,523     62%   121%
    Income tax expense              314         171         465     48%   172%
    Net income                   $3,703      $2,781      $6,058     64%   118%

    Basic earnings per ADS        $0.74       $0.41       $0.14   (81)%  (66)%
    Diluted earnings per ADS      $0.11       $0.07       $0.13     18%    86%

    Margin analysis:
    Gross margin                   43.2%       45.5%       45.6%
    Operating margin               13.8%        7.9%       11.7%
    Net margin                     13.9%        8.6%       15.7%

    Weighted average ADS
     equivalent:(1)
    Basic                     5,002,184   6,859,226  42,005,199
    Diluted                  34,033,283  39,240,015  46,940,325


    (1) Assumes all outstanding ordinary shares are represented by ADSs.  Each
        ADS represents three ordinary shares.



                       Spreadtrum Communications, Inc.
                        Consolidated Income Statements
     (in thousands of US dollars, except per share data and percentages)
                                 (unaudited)

                                                Nine months ended
                                             September     September
                                              30, 2006      30, 2007    Change
    Revenue                                    $76,113       $96,924       27%
    Cost of revenue                             46,869        53,493       14%
    Gross profit                                29,244        43,431       49%
    Operating expenses
       Research & development                   13,160        22,945       74%
       Selling, general & administrative         7,247        12,128       67%
       Total operating expenses                 20,407        35,073       72%
    Operating income                             8,837         8,358      (5)%
    Non-operating income (expense)
       Interest income                             554         2,414      336%
       Interest expense                            (43)          (30)    (30)%
       Other income, net                           437           794       82%
       Total non-operating income                  948         3,178      235%
    Income before tax                            9,785        11,536       18%
    Income tax expense                             730           665      (9)%
    Net income                                  $9,055       $10,871       20%

    Basic earnings per ADS                       $1.84         $0.59     (68)%
    Diluted earnings per ADS                     $0.27         $0.26      (4)%

    Margin analysis:
    Gross margin                                 38.4%         44.8%
    Operating margin                             11.6%          8.6%
    Net margin                                   11.9%         11.2%

    Weighted average ADS equivalent:(2)
    Basic                                    4,907,441    18,307,807
    Diluted                                 33,130,200    41,531,113


    (2) Assumes all outstanding ordinary shares are represented by ADSs.
        Each ADS represents three ordinary shares.



                       Spreadtrum Communications, Inc.
                    Condensed Consolidated Balance Sheets
                         (in thousands of US dollars)

                                         December 31,    June 30,    September
                                          2006 (Note)       2007      30, 2007
    Cash and cash equivalents                $47,254     $41,336      $146,973
    Term deposit                               1,281          --            --
    Accounts receivable, net                  11,384       6,674         3,020
    Inventories                               13,617      14,925        15,020
    Deferred tax assets                          202         202           202
    Prepaid expenses and other current
     assets                                    1,101       5,638         3,716
    Total current assets                      74,839      68,775       168,931

    Property and equipment, net               18,944      21,468        22,388
    Acquired intangible assets, net            5,920      12,489        13,622
    Deferred tax assets                        1,060       1,087         1,035
    Other long term assets                     3,339       6,512         9,567
    Total assets                             104,102     110,331       215,543

    Current portion of long term loan            576         985           666
    Accounts payable                          12,980      12,317        10,874
    Advances from customers                    3,297       4,428         7,229
    Obligation on acquisition of building      9,236       5,531            --
    Income tax payable                         1,849       2,008         2,397
    Accrued expenses and other current
     liabilities                              13,363      13,262        14,294
    Total current liabilities                 41,301      38,531        35,460

    Long term loan                             3,842       3,283         3,329
    Deferred tax liabilities                      17          17            17
    Other long-term obligations                   --         971         1,433
    Total long term liabilities                3,859       4,271         4,779

    Total liabilities                         45,160      42,802        40,239
    Shareholders' equity                      58,942      67,529       175,304
    Total liabilities & shareholders'
     equity                                 $104,102    $110,331      $215,543

    Note: The financial information at December 31, 2006 is derived from the
          Company's audited consolidated financial statements in its
          prospectus.



                       Spreadtrum Communications, Inc.
                           Supplemental Information
               (in thousands of US dollars, except percentages)


    Revenue (US$000)                        4Q05      1Q06      2Q06      3Q06
    Baseband Semiconductor                $3,028    $4,849   $11,760   $15,684
    Turnkey Solutions                     17,566    14,842    17,961    11,017
    Total                                $20,594   $19,691   $29,721   $26,701

    As % of Total Revenue
    Baseband Semiconductor                   15%       25%       40%       59%
    Turnkey Solutions                        85%       75%       60%       41%

    Gross Margin                           25.0%     31.4%     38.8%     43.2%


    Revenue (US$000)                        4Q06      1Q07      2Q07      3Q07
    Baseband Semiconductor               $22,645   $20,589   $27,357   $34,161
    Turnkey Solutions                      8,317     5,578     4,830     4,409
    Total                                $30,962   $26,167   $32,187   $38,570

    As % of Total Revenue
    Baseband Semiconductor                   73%       79%       85%       89%
    Turnkey Solutions                        27%       21%       15%       11%

    Gross Margin                           46.4%     42.9%     45.5%     45.6%


                       Spreadtrum Communications, Inc.
                  Reconciliation of GAAP to Non-GAAP Results
     (in thousands of US dollars, except per share data and percentages)
                                 (unaudited)

                                                   Three months ended
                                          September     June 30,     September
                                           30, 2006         2007      30, 2007
    Cost of revenue                         $15,161      $17,543       $20,996
       Adjustment for share-based
        compensation                            (44)         (52)          (54)
    Cost of revenue (non-GAAP)              $15,117      $17,491       $20,942

    Operating income                         $3,681       $2,543        $4,518
       Adjustment for share-based
        compensation within:
             Cost of revenue                     44           52            54
             Research and development           385          563           582
             Selling, general, and
              administrative                    333          904           891
    Operating income (non-GAAP)              $4,443       $4,062        $6,045

    Net income                               $3,703       $2,781        $6,058
       Adjustment for share-based
        compensation within:
             Cost of revenue                     44           52            54
             Research and development           385          563           582
             Selling, general, and
              administrative                    333          904           891
    Net income (non-GAAP) *                  $4,465       $4,300        $7,585

    Diluted earnings per ADS                  $0.11        $0.07         $0.13
       Adjustment for share-based
        compensation                           0.02         0.04          0.03
    Diluted earnings per ADS (non-GAAP)*      $0.13        $0.11         $0.16

    Gross margin                              43.2%        45.5%         45.6%
       Adjustment for share-based
        compensation                           0.2%         0.2%          0.1%
    Gross margin (non-GAAP)                   43.4%        45.7%         45.7%

    Operating margin                          13.8%         7.9%         11.7%
       Adjustment for share-based
        compensation                           2.9%         4.7%          4.0%
    Operating margin (non-GAAP)               16.7%        12.6%         15.7%

    Net margin                                13.9%         8.6%         15.7%
       Adjustment for share-based
        compensation                           2.9%         4.7%          4.0%
    Net margin (non-GAAP)*                    16.8%        13.3%         19.7%

    * The non-GAAP adjustment does not take into consideration the impact of
      taxes.



About Spreadtrum Communications, Inc.:

Spreadtrum Communications, Inc. (Nasdaq: SPRD; the "Company") is a fabless semiconductor company that designs, develops, and markets baseband processor solutions for the mobile wireless communications market. The Company combines its semiconductor design expertise with its software development capabilities to deliver highly-integrated baseband processors with multimedia functionality and power management. The Company has developed its solutions based on an open development platform, enabling its customers to develop customized wireless products that are feature-rich and meet their cost and time-to-market requirements.

Safe Harbor Statements:

This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, without limitation, statements regarding trends in the semiconductor industry in China, the Company's share in the Chinese mobile handset market, the positioning of the Company with respect to new chips announced in the third quarter and this month, the Company's cooperation with ZTE in projects designed to improve the functionality of TD-SCDMA system and terminals and introduce additional TD-SCDMA commercial products, the expected phase-out of the Company's SM5100 series modules, the Company's expectations with respect to the revenue and operating margin for the fourth quarter of 2007, and the Company's future results of operations, financial condition, and business prospects. These statements are forward-looking in nature and involve risks and uncertainties that may cause actual market trends and the Company's actual results to differ materially from those expressed or implied in these forward- looking statements for a variety of reasons. Potential risks and uncertainties include, but are not limited to, continuing competitive pressure in the semiconductor industry and the effect of such pressure on prices; unpredictable changes in technology and consumer demand for mobile phones; uncertainty regarding the timing and pace of deployment of 3G wireless networks that support TD-SCDMA in China; uncertainty regarding the timing and pace of the commercial deployment of AVS-based products in China; the Company's ability to sustain recent rates of growth; the state of and any change in the Company's relationship with its major customers; and changes in political, economic, legal and social conditions in China. For additional discussion of these risks and uncertainties and other factors, please consider the information contained in the Company's filings with the U.S. Securities and Exchange Commission (the "SEC"), including the registration statement on Form F-1 filed on June 26, 2007, as amended, especially the sections under "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," and such other documents that the Company may file with the SEC from time to time, including on Form 6-K. The Company assumes no obligation to update any forward-looking statements, which apply only as of the date of this press release.




--------------------------------------------------------------------------------
Source: Spreadtrum Communications, Inc.

HIMX - Himax   Taiwan

Himax Reports Third Quarter 2007 Results
Thursday November 1, 4:00 pm ET




* Third quarter 2007 revenue increased to $243.3 million - record
   high since inception
* Third quarter 2007 gross margin increased to 22.5% - marks
   fourth consecutive quarter of improvement
* Fourth quarter 2007 revenue expected to grow around mid-single
   digits, with gross margin to remain flat, and EPS to be in the
   range of $0.16 to $0.17

           Board Authorizes $40 Million Share Buyback Program

TAINAN, Taiwan, Nov. 1, 2007 (PRIME NEWSWIRE) -- Himax Technologies, Inc. (``Himax'' or ``Company'') (NasdaqGS:HIMX - News) today reported financial results for the third quarter ended September 30, 2007.

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Net revenue for the third quarter of 2007 was $243.3 million, representing 37.4% growth year-over-year and 9.2% growth sequentially.

Gross margin was 22.5% in the third quarter of 2007, up 510 basis points year-over-year and 210 basis points sequentially.

Operating margin was 8.2% in the third quarter of 2007. Operating income was $19.9 million, up from $0.8 million in the same period last year, and down from $24.9 million in the previous quarter.

Net income for the third quarter of 2007 was $21.8 million, up from $2.6 million in the same period last year, and down from $26.8 million in the previous quarter. The decline is primarily due to the grant of 2007 annual restricted share units at the end of September. This represents earnings per share of $0.11 per basic and diluted share, compared to $0.01 per basic and diluted share in the third quarter of 2006, and $0.14 per basic and diluted share in the second quarter of 2007.

Excluding share-based compensation and acquisition-related charges, non-GAAP operating margin was 14.9% in the third quarter of 2007. Non-GAAP operating income was $36.2 million, up from $12.2 million in the same period last year, and up from $28.1 million in the previous quarter.

Non-GAAP net income was $38.0 million, up from $14.1 million in the same period last year, and up from $30.0 million in the previous quarter. This represents earnings per share of $0.19 per basic and diluted share, compared to $0.07 per basic and diluted share in the third quarter of 2006, and $0.15 per basic and diluted share in the second quarter of 2007.

Share-based compensation was $15.7 million, compared to $11.5 million in the third quarter of 2006, and $1.5 million in the second quarter of 2007. Acquisition-related charges were $0.6 million, compared to $0 in the third quarter of 2006 and $1.6 million in the second quarter of 2007.

A reconciliation of our gross margin, operating margin and diluted EPS excluding share-based compensation and acquisition-related charges, a non-GAAP financial measure, to GAAP gross margin, GAAP operating margin and diluted GAAP EPS, our most comparable GAAP figure, is set out in the attached reconciliation schedule.

Jordan Wu, President and Chief Executive Officer of Himax, commented, ``We are pleased with the third quarter results as we achieved record high revenues. We were able to improve our gross margin for the fourth consecutive quarter, resulting in a seven fold increase in our year-over-year GAAP net income. Separately, on October 12, we announced plans to spin-off our TV and monitor chipset operation which will be named Himax Media Solutions, Inc., a wholly-owned subsidiary of Himax Taiwan upon its establishment. Himax Media Solutions, Inc. will be focusing on expanding market share in the global TV and monitor chipset market opportunity. We have identified certain strategic investors and plan to invite them to partner with us in the future. We believe this new company structure will allow us to better focus our resources for the global TV and monitor chipset market opportunity.''

Mr. Wu added, ``On November 1st, our board approved a share repurchase program that authorizes the Company to repurchase up to $40 million worth of the Company's American Depository Receipts. The program does not obligate Himax to acquire any particular amount of ADRs and may be modified or suspended at any time at the Company's sole discretion. With the repurchase program, we reaffirm our confidence and optimism in the long term future of the company. This also demonstrates our commitment to deliver value to our shareholders.''

Max Chan, Chief Financial Officer of Himax, said, ``We made our 2007 annual restricted share units grant of approximately $26.4 million at the end of September. Approximately 54.5%, or $14.4 million was paid out in cash, and vested and expensed immediately. The remainder of the grant will be vested in three equal installments over the next three years. Total share-based compensation accrued in the third quarter, including expenses from legacy grants amounted to $15.7 million, or $0.08 per diluted share.''

Looking forward, Mr. Wu added, ``We expect revenue to grow around mid-single digit in the fourth quarter and gross margin to remain flat. We expect diluted GAAP EPS to be in the range of $0.16 to $0.17. ''

Investor Conference Call / Webcast Details

The Company's management will review detailed third quarter 2007 results on Thursday, November 1, 2007 at 7:00 PM EDT (7:00 AM, Friday, November 2, Taiwan time). The conference call-in number is +1-201-689-8560 (international) and +1-877-407-0784 (U.S. domestic). A live webcast of the conference call will be available on the Company's website at http://www.himax.com.tw. The playback will be available beginning two hours after the conclusion of the conference call and will be accessible by dialing +1-201-612-7415 (international) and 1-877-660-6853 (U.S. domestic). The account number to access the replay is 3055 and the confirmation ID number is 258193.

About Himax Technologies, Inc.

Himax Technologies, Inc. designs, develops and markets semiconductors that are critical components of flat panel displays. The Company's principal products are display drivers for large-sized TFT-LCD panels, which are used in desktop monitors, notebook computers and televisions, and display drivers for small- and medium-sized TFT-LCD panels, which are used in mobile handsets and consumer electronics products such as digital cameras, mobile gaming devices and car navigation displays. In addition, the Company is expanding its product offering to include television semiconductor solutions, as well as LCOS products Based in Tainan, Taiwan, the Company has regional offices in Hsinchu and Taipei, Taiwan; Suzhou and Shenzhen, China; Yokohama, Japan and Anyangsi Kyungkido, South Korea; and Irvine, California, USA.

Forward-Looking Statements:

Certain statements in this press release, including statements regarding expected future financial results and industry growth, are forward-looking statements that involve a number of risks and uncertainties that could cause actual events or results to differ materially from those described in this press release. Factors that could cause actual results to differ include general business and economic conditions and the state of the semiconductor industry; level of competition; demand for end-use applications products; reliance on a small group of principal customers; continued success in technological innovations; development of alternative flat panel display technologies; ability to develop and protect our intellectual property; pricing pressures including declines in average selling prices; changes in customer order patterns; shortages in supply of key components; changes in environmental laws and regulations; exchange rate fluctuations; regulatory approvals for further investments in our subsidiaries; and other risks described from time to time in the Company's SEC filings, including its Form 20-F dated June 22, 2007, as amended. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.



                       Himax Technologies, Inc.
        Unaudited Condensed Consolidated Statements of Income
  (These interim financials do not fully comply with US GAAP because
        they omit all interim disclosure required by US GAAP.)

    (Figures in Thousands of U.S. Dollars, Except Per Share Data)

                                              Three Months Ended
                                      --------------------------------
                                          September 30,       June 30,
                                        2007        2006        2007
                                      --------    --------    --------
Revenues
  Revenues from third parties, net    $ 91,960    $ 88,878    $102,276
  Revenues from related parties, net   151,377      88,227     120,607
                                      --------    --------    --------
                                       243,337     177,105     222,883
                                      --------    --------    --------
Costs and expenses:
  Cost of revenues                     188,626     146,287     177,452
  Research and development              26,171      24,267      15,328
  General and administrative             4,891       3,190       3,222
  Sales and marketing                    3,758       2,586       1,995
                                      --------    --------    --------
    Total costs and expenses           223,446     176,330     197,997
                                      --------    --------    --------
Operating income                       19,891         775      24,886
                                      --------    --------    --------

Non operating income (loss):
Interest income                         1,429       2,000       1,514
Foreign exchange gains (losses), net      (29)     (1,298)         36
Other income, net                         166          59         159
                                      --------    --------    --------
                                         1,566         761       1,709
                                      --------    --------    --------
Income before income taxes
  and minority interest                 21,457       1,536      26,595
Income tax benefit                         --      (1,246)         --
                                      --------    --------    --------
Income before minority interest        21,457       2,782      26,595
Minority interest, net of tax             316        (157)        247
                                      --------    --------    --------
Net income                           $ 21,773    $  2,625    $ 26,842
                                      ========    ========    ========
Basic earnings per ordinary share
  and ADS                             $   0.11    $   0.01    $   0.14
                                      ========    ========    ========
Diluted earnings per ordinary share
  and ADS                             $   0.11    $   0.01    $   0.14
                                      ========    ========    ========

Basic Weighted Average
  Outstanding Shares                   197,690     197,110     197,656
Diluted Weighted Average
  Outstanding Shares                   197,733     199,729     198,013


                       Himax Technologies, Inc.
             Unaudited Supplemental Financial Information
                (Figures in Thousands of U.S. Dollars)

The amount of share-based compensation
included in applicable costs and
expenses categories is summarized
as follows:
                                              Three Months Ended
                                      --------------------------------
                                          September 30,       June 30,
                                        2007        2006        2007
                                      --------    --------    --------
Share-based compensation
   Cost of revenues                   $    355    $    208    $     25
   Research and development             11,795       8,963       1,201
   General and administrative            1,718       1,090         151
   Sales and marketing                   1,842       1,195         156
                                      --------    --------    --------
Total                                $ 15,710    $ 11,456    $  1,533
                                      ========    ========    ========

The amount of acquisition-related
charges included in applicable
expenses categories is summarized
as follows:

   Research and development           $    250    $     --    $  1,234
   Sales and marketing                     304          --         408
                                      --------    --------    --------
Total                                $    554    $     --    $  1,642
                                      ========    ========    ========

                       Himax Technologies, Inc.
         Unaudited Condensed Consolidated Statements of Income
     (Figures in Thousands of U.S. Dollars, Except Per Share Data)

                                            Nine Months Ended
                                               September 30,
                                            2007           2006
                                         ---------      ---------
Revenues
   Revenues from third parties, net      $ 270,072      $ 238,939
   Revenues from related parties, net      381,039        284,700
                                         ---------      ---------
                                           651,111        523,639
                                         ---------      ---------
Costs and expenses:
   Cost of revenues                        514,908        422,351
   Research and development                 56,299         46,772
   General and administrative               11,113          6,582
   Sales and marketing                       7,254          4,690
                                         ---------      ---------
Total costs and expenses                  589,574        480,395
                                         ---------      ---------

Operating income                           61,537         43,244
                                         ---------      ---------

Non operating income (loss):
Interest income                             4,325          4,048
Impairment loss on an investment               --         (1,500)
Foreign exchange losses, net                 (483)          (132)
Interest expense                               --           (311)
Other income, net                             367            172
                                         ---------      ---------
                                             4,209          2,277
                                         ---------      ---------
Income before income taxes and
  minority interest                         65,746         45,521
Income tax expense                             --          1,491
                                         ---------      ---------
Income before minority interest            65,746         44,030
Minority interest, net of tax                 888             59
                                         ---------      ---------
Net income                              $  66,634      $  44,089
                                         =========      =========

Basic earnings per ordinary share
  and ADS                                $    0.34      $    0.23
                                         =========      =========
Diluted earnings per ordinary share
  and ADS                                $    0.34      $    0.23
                                         =========      =========

Basic Weighted Average
  Outstanding Shares                       197,671        190,484
Diluted Weighted Average
  Outstanding Shares                       197,834        193,698

                       Himax Technologies, Inc.
             Unaudited Supplemental Financial Information
                (Figures in Thousands of U.S. Dollars)

The amount of share-based compensation
included in applicable costs and
expenses categories is summarized
as follows:
                                            Nine Months Ended
                                               September 30,
                                            2007           2006
                                         ---------      ---------
Share-based compensation
   Cost of revenues                      $     405      $     250
   Research and development                 14,183         10,645
   General and administrative                2,020          1,293
   Sales and marketing                       2,154          1,469
                                         ---------      ---------
Total                                   $  18,762      $  13,657
                                         =========      =========

The amount of acquisition-related
charges included in applicable
expenses categories is summarized
as follows:

   Research and development              $   2,273      $      --
   Sales and marketing                         810             --
                                         ---------      ---------
Total                                   $   3,083      $      --
                                         =========      =========


                       Himax Technologies, Inc.
            Unaudited Condensed Consolidated Balance Sheets
     (Figures in Thousands of U.S. Dollars, Except Per Share Data)


                                        Sept. 30,  June 30,   Dec. 31,
                                          2007       2007       2006
                                        --------   --------   --------
Assets
Current assets:
Cash and cash equivalents              $119,246   $137,508   $109,753
Marketable securities
  available-for-sale                      16,109     13,327      8,828
Restricted cash equivalents                 171        171        108
Accounts receivable, less
  allowance for doubtful
  accounts, sales returns
  and discounts                          101,467    116,812    112,767
Accounts receivable from
  related parties, less
  allowance for doubtful
  accounts, sales returns
  and discounts                          178,099    137,602    116,850
Inventories                             125,983    125,146    101,341
Deferred income taxes                     6,829      6,829      6,744
Prepaid expenses and
  other current assets                    12,903     10,113     10,324
                                        --------   --------   --------
Total current assets                   $560,807   $547,508   $466,715
                                        --------   --------   --------
Property, plant and
  equipment, net                          46,070     45,801     38,895
Deferred income taxes                    12,842     12,842     11,405
Intangible assets, net                   33,711     34,273        393
Investments in non-
  marketable securities                    2,584      1,857        817
Refundable deposits and
  prepaid pension costs                      612        593        569
                                        --------   --------   --------
                                          95,819     95,366     52,079
                                        --------   --------   --------
Total assets                           $656,626   $642,874   $518,794
                                        ========   ========   ========

Liabilities, minority interest
  and stockholders' equity
Current liabilities:
Accounts payable                       $160,269   $171,218   $120,407
Income tax payable                        7,333      7,333     11,666
Dividends payable                        39,710         --         --
Other accrued expenses and
  other current liabilities               15,738     16,023     21,206
                                        --------   --------   --------
Total current liabilities              $223,050   $194,574   $153,279
Accrued pension liability              $    196   $    196   $    192
                                        --------   --------   --------
Total liabilities                      $223,246   $194,770   $153,471
                                        --------   --------   --------
Minority interest                      $  3,084   $  1,715   $  1,396
                                        --------   --------   --------
Stockholders' equity:

Ordinary share, US$0.0001 par value,
  198,548,799, 197,661,063, and
  193,600,302 shares issued and
  outstanding at September 30, 2007,
  June 30, 2007 and December 31, 2006,
  respectively                                20         20         19
Additional paid-in capital              260,980    259,189    221,666
Accumulated other comprehensive loss       (146)      (198)      (275)
Unappropriated earnings                 169,442    187,378    142,517
                                        --------   --------   --------
Total stockholders' equity             $430,296   $446,389   $363,927
                                        --------   --------   --------
Total liabilities, minority interest
  and stockholders' equity              $656,626   $642,874   $518,794
                                        ========   ========   ========


                       Himax Technologies, Inc.
       Unaudited Condensed Consolidated Statements of Cash Flows
                (Figures in Thousands of U.S. Dollars)

                                               Three Months Ended
                                        ------------------------------
                                           September 30,      June 30,
                                          2007       2006       2007
                                        --------   --------   --------
Cash flows from operating activities:
Net income                             $ 21,773   $  2,625   $ 26,842
Adjustments to reconcile net income
  to net cash provided by operating
  activities:
   Depreciation and amortization           4,179      1,119      2,587
   Write-off of in-process research
    and development                           --         --        900
   Share-based compensation expenses       1,284     11,456      1,533
   Minority interest, net of tax            (316)       157       (247)
   Loss (gain) on disposal of
    property, plant and equipment            (16)        --        204
   Gain on sale of subsidiary shares
    and investments in non-marketable
    securities, net                         (112)       (11)      (125)
   Gain on sale of marketable
    securities, net                          (31)       (12)       (23)
   Deferred income taxes                      --        132       (727)
   Inventories write downs                 3,264        469      5,103
Changes in operating assets and
  liabilities:
   Accounts receivable                    15,850    (14,772)    (8,661)
   Accounts receivable from related
    parties                              (40,994)    (5,096)   (31,856)
   Inventories                            (4,032)    (7,838)   (10,868)
   Prepaid expenses and other
    current assets                        (4,390)    (2,530)       486
   Accounts payable                      (10,949)     8,815     49,753
   Income tax payable                         --     (1,075)    (4,333)
   Other accrued expenses and other
    current liabilities                     (114)     3,477      4,071
                                        --------   --------   --------
     Net cash provided by
      (used in) operating activities     (14,604)    (3,084)    34,639
                                        --------   --------   --------
Cash flows from investing
  activities:
   Purchase of property, plant
    and equipment                         (2,500)    (5,691)    (6,877)
   Proceeds from sale of property,
    plant and equipment                        3         --          3
   Purchase of available-for-sales
    marketable securities                (12,144)   (10,608)   (11,723)
   Sales and maturities of
    available-for-sale marketable
    securities                             9,404      8,480     11,258
   Proceeds from sale of subsidiary
    shares and investments in non-
    marketable securities by Himax
    Technologies Limited                     144         27        131
   Purchase of investments in non-
    marketable securities                   (750)    (1,410)    (1,040)
   Purchase of subsidiary shares
    from minority interest                  (112)       (64)       (46)
   Refund from (increase in)
    refundable deposits                      (15)       (92)        76
   Release (pledge) of restricted
    cash equivalents                          --        424        (91)
                                        --------   --------   --------
     Net cash used in
      investing activities                (5,970)    (8,934)    (8,309)
                                        --------   --------   --------


                       Himax Technologies, Inc.
       Unaudited Condensed Consolidated Statements of Cash Flows
                (Figures in Thousands of U.S. Dollars)

                                            Three Months Ended
                                  -----------------------------------
                                       September 30,         June 30,
                                     2007        2006          2007
                                  ---------    ---------    ---------
Cash flows from financing
  activities:
   Proceeds from issuance of
    new shares by subsidiaries    $   2,290    $     655    $      --
   Acquisition of ordinary
    shares for retirement                --           --         (625)
                                  ---------    ---------    ---------
     Net cash provided by (used
      in) financing activities        2,290          655         (625)
                                  ---------    ---------    ---------
Effect of exchange rate
  changes on cash and cash
  equivalents                            22           73          (35)
                                  ---------    ---------    ---------
Net increase (decrease) in
  cash and cash equivalents         (18,262)     (11,290)      25,670
Cash and cash equivalents
  at beginning of period            137,508      166,884      111,838
                                  ---------    ---------    ---------
Cash and cash equivalents
  at end of period                $ 119,246    $ 155,594    $ 137,508
                                  =========    =========    =========
Supplemental disclosures of
  cash flow information:
   Cash paid during the
    period for income taxes       $      24    $      21    $   4,706
                                  =========    =========    =========
Supplemental disclosures of
  non-cash investing and
  financing activities:
   Payable for purchase of
    equipment and construction
    in progress                   $       6    $  (1,750)   $  (4,473)
                                  =========    =========    =========
   Dividends payable              $  39,710    $      --    $      --
                                  =========    =========    =========

                       Himax Technologies, Inc.
         Unaudited Supplemental Data - Reconciliation Schedule
                (Figures in Thousands of U.S. Dollars)

Gross Margin and Operating Margin Excluding Share-based Compensation
and Acquisition-Related Charges:

                                           Three Months Ended
                                   --------------------------------
                                       September 30,       June 30,
                                     2007        2006        2007
                                   --------    --------    --------
Revenues                          $243,337    $177,105    $222,883

Gross profit                        54,711      30,818      45,431
Add: Share-based compensation
  - Cost of revenues                    355         208          25
Gross profit excluding share-
  based compensation                 55,066      31,026      45,456
Gross margin excluding share-
  based compensation                   22.6%       17.5%       20.4%

Operating income                    19,891         775      24,886
Add: Share-based compensation       15,710      11,456       1,533
Operating income excluding
  share-based compensation           35,601      12,231      26,419
Add: Acquisition-related
  charges - In-process R&D
             write off                   --          --         900
          - Intangible assets
             amortization               554          --         742
Operating income excluding
  share-based compensation
  and acquisition-related
  charges                            36,155      12,231      28,061
Operating margin excluding
  share-based compensation
  and acquisition-related
  charges                              14.9%        6.9%       12.6%
Net income excluding
  share-based compensation
  and acquisition-related
  charges                            38,037      14,081      30,017
Net margin excluding
  share-based compensation
  and acquisition-related
  charges                              15.6%        8.0%       13.5%


   * Gross margin excluding share-based compensation equals gross
     profit excluding share-based compensation divided by revenues
   * Operating margin excluding share-based compensation and
     acquisition-related charges equals operating income excluding
     share-based compensation and acquisition-related charges divided
     by revenues
   * Net margin excluding share-based compensation and
     acquisition-related charges equals net income excluding
     share-based compensation and acquisition-related charges divided
     by revenues


                       Himax Technologies, Inc.
         Unaudited Supplemental Data - Reconciliation Schedule
                (Figures in Thousands of U.S. Dollars)

Gross Margin and Operating Margin Excluding Share-based Compensation
and Acquisition-Related Charges:
                                         Nine Months Ended
                                            September 30,
                                         2007          2006
                                       --------      --------
Revenues                              $651,111      $523,639

Gross profit                           136,203       101,288
Add: Share-based compensation
  - Cost of revenues                        405           250
Gross profit excluding share-
  based compensation                    136,608       101,538
Gross margin excluding share-
  based compensation                       21.0%         19.4%

Operating income                        61,537        43,244
Add: Share-based compensation           18,762        13,657
Operating income excluding
  share-based compensation               80,299        56,901
Add: Acquisition-related
  charges - In-process R&D write
             off                          1,600            --
          - Intangible assets
             amortization                 1,483            --
Operating income excluding
  share-based compensation
  and acquisition-related charges        83,382        56,901
Operating margin excluding
  share-based compensation
  and acquisition-related
  charges                                  12.8%         10.9%
Net income excluding share-
  based compensation and
  acquisition-related charges            88,479        57,746
Net margin excluding share-
  based compensation and
  acquisition-related charges              13.6%         11.0%

   * Gross margin excluding share-based compensation equals gross
     profit excluding share-based compensation divided by revenues
   * Operating margin excluding share-based compensation and
     acquisition-related charges equals operating income excluding
     share-based compensation and acquisition-related charges divided
     by revenues
   * Net margin excluding share-based compensation and
     acquisition-related charges equals net income excluding
     share-based compensation and acquisition-related charges divided
     by revenues

                       Himax Technologies, Inc.
         Unaudited Supplemental Data - Reconciliation Schedule

Diluted Earnings Per Share Excluding Share-based Compensation
and Acquisition-Related Charges:

                               Three Months Ended    Nine Months Ended
                                  September 30,         September 30,
                                      2007                  2007
                               ------------------    -----------------
Diluted GAAP EPS                     $0.11                 $0.34

Add: Estimated share-based
  compensation per diluted
  share                               $0.08                 $0.09
Add: Estimated acquisition-
  related charges                     $  --                 $0.02
Diluted non-GAAP EPS excluding
   share-based compensation and
   acquisition-related charges        $0.19                 $0.45

Numbers do not add up due to rounding



Contact:
          Himax Technologies, Inc.
          Max Chan, Chief Financial Officer
            +886-2-3393-0877 Ext. 22300
            [email protected]
          Jackson Ko/Jessie Wang, Investor Relations
            +886-2-3393-0877
            Ext. 22240/22618
            [email protected]
            [email protected]

          In the U.S.
          The Ruth Group
          David Pasquale
          +1-646-536-7006
          [email protected]

SWIM - Investools

Investools Reports Record Third Quarter 2007 Financial Results
Thursday November 1, 4:05 pm ET 
Revenue up 111% to Record $84 Million for the Third Quarter
Net Income Swings to $13 Million Profit, $0.19 Per Share, from Prior Year Third Quarter Loss of $0.12 Per Share


NEW YORK, Nov. 1 /PRNewswire-FirstCall/ -- Investools Inc. (Nasdaq: SWIM - News), a leading provider of online brokerage and investor education services, today announced financial results and selected operating metrics for the third quarter and nine months ended September 30, 2007.

    Consolidated financial highlights for the third quarter include:

    -- Record Revenues of $84 million.
    -- Record Net Income of $13 million.
    -- Sales Transaction Volume of $80 million.
    -- Non-GAAP Adjusted EBITDA (before certain items) was $20 million, or 25%
       of Sales Transaction Volume.

"Strong financial results for the third quarter exceeded our forecasts as thinkorswim's active retail accounts took advantage of market volatility and the addition of 9,400 funded accounts added scale to our rapidly growing brokerage business," said Lee K. Barba, Chairman and CEO of Investools Inc. "We successfully executed a 'portfolio' acquisition strategy in our investor education business to expand branded student acquisition to record levels while diversifying partner acquisition channels to grow future student acquisition and reduce shareholder exposure to channel concentration."

thinkorswim highlights for the third quarter ended September 30, 2007 compared to the year-ago period:


    -- Record brokerage revenue of $32 million, up 108%.
    -- New accounts opened, net, of 17,900, up 201%.
    -- Record new accounts funded of 9,400, up 280%.
    -- Funded accounts totaled 47,850 as of September 30, 2007, up 198%.
    -- Retail DARTs of 29,600, up 279%.
    -- Active Trader DARTs of 25,100, up 82%.
    -- Total client assets $2.18 billion, up 145%.
    -- Average client account balance of $43,500 trading 170 times per year.

"thinkorswim has continued to build scale and improve operating margins by attracting record numbers of active, funded accounts. Consistent monthly release upgrades continue to differentiate the thinkorswim platforms and provide unique features including the recent launch of free CNBC Plus streaming, live and commercial-free CNBC video with VOD ticker searchable archived news, thinkscripts rules-based-trading functionality and thinkmobile trading access," said Lee K. Barba, Chairman and CEO of Investools Inc.

Investor Education Group highlights for the third quarter ended September 30, 2007 compared to the year-ago period:


    -- Revenue of $52 million, up 30%.
    -- Sales Transaction Volume of $47 million, a 16% decline.
    -- Price and offer changes continue to fuel efficient graduate growth:
       -- Record Investools marketed graduates of 7,300, up 65%.
       -- Total paid graduates of 9,470 during the quarter.
       -- Active Investor Toolbox subscribers of 98,000, up 15%.

"We achieved breakout records for Investools branded student acquisition in the third quarter through expanded marketing campaigns, particularly on a national level, that acquired students at a reduced cost from previous quarters. By shifting to a 'portfolio' approach to student acquisition and establishing several new relationships, we simultaneously reduced the risk to shareholders of historic partner concentration," said Lee K. Barba, Chairman and CEO of Investools Inc.

Outlook

"We expect continued growth in revenue and expanding bottom line margins for the fourth quarter based on record October results. Our profitable account acquisition and education models continue to convert to high-value retail thinkorswim trading accounts even as we have tripled open accounts in the last twelve months. As a result, we continue to expect Investools will generate positive GAAP earnings for the balance of 2007 and into 2008," concluded Mr. Barba.

Conference Call / Webcast Information

Investools will conduct a conference call to discuss third quarter results at 4:30 p.m. Eastern Time today. The call is being webcast and will be available through Investools' website at www.investools.com under Investor Relations and through thinkorswim's website at www.thinkorswim.com under Investor Relations.

About Investools (Nasdaq: SWIM - News)

Investools Inc. offers market-leading investor education and brokerage and related financial products and services for self-directed investors. Investools Education Group offers a full range of investor education products and services that provide lifelong learning in a variety of interactive delivery formats, including instructor-led synchronous and asynchronous online courses, in-person workshops, one-on-one and one-to-many online coaching programs and telephone, live-chat and email support. thinkorswim Inc., Investools' financial technology pioneer and industry-leading online brokerage firm, is focused on providing services to self-directed options traders and active traders. thinkorswim offers customers a broad range of products including equity securities, fixed income, index products, options, futures, other derivatives and foreign exchange. thinkorswim provides unique front end trading platforms that allow its customers to trade electronically and provides sophisticated trading tools and analytics, including tools for implementing complex, multi-leg options strategies. The products and services offered by Investools Inc. have received numerous accolades from third parties including thinkorswim's ranking by Barron's as its top rated software-based online broker and best for options traders (2006 & 2007), and Prophet's top Barron's ranking for best technical analysis tools (2006).

Hi Big, thanks for the info, but this should be placed at the "Your Stocks" thread. Thanks :)

They aren't my stocks, at least not yet. Just thought they might be worthy of a look. But I'll stop it.

Hello David.
Your opinion about INSM would be apreciated.

Thanks in advance.

Quote from: n1notesguy on September 24, 2007, 02:30:13 PM
Hi David,

If you have time could you look into CHCG. Thank you.

Ken

1. Profile

China 3C Group (CHCG.OB), headquartered in Hangzhou City in China's Zhejiang province, retails and distributes a wide range of consumer electronics, including cell phones, MP3 players, cameras, DVD players, stereo systems and household appliances. China 3C Group also distributes business electronic products such as FAX machines, computers and land line telephones. Four subsidiaries, each offering distinct product lines, retail a broad range of consumer electronic products. These are sold through more than 800 retail outlets, all but one of which are located on the premises of third-party supermarket chains. China 3C's core markets are the city of Shanghai and the eastern coastal provinces of Jiangsu and Zehjiang, among the most densely populated and fastest growing in China.

Around 70% of the company's revenue is generated by its retail business. All but one of its retail units consist of 800+ "stores-in-stores" operating on the premises of supermarket chains. China 3C plans to expand significantly within its core markets, increasing the number of its stores to 2,000 by 2008, and 4,000 by 2010.

2. CHCG.OB's stock market history

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41599;image)

CHCG didn't go anywhere since its IPO in early 2004 and that wasn't because of dilution, since the share count has remained relatively stable (for an OTCBB). The current market cap is $233 M.

In terms of revenues, I have $32 M in 2004, $32 M in 2005 and $148 M in 2006. As for 2007, analysts are expecting a whopping $323.5 M. As for EPS, I have $0.24 in 2006 and for 2007 analysts expect $0.47 and estimate $0.62 for 2008 (http://finance.yahoo.com/q/ae?s=CHCG.OB).

This means CHCG.OB is growing revenues by 118% from 2006 levels and it is trading at 9.34 times 2007 estimated EPS.

Where's the catch, if any?

3. 2007 History

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41600;image)

We've had three research reports for CHCG, made by Taglich Brothers Research:

Taglich Research Reports: CHCG (http://www.taglichbrothers.com/equityuniverse/companies/china3c/china3c.asp)

To be continued ...

David, I want to say that everytime I see .OB stocks in the main portfolio I see MORE and MORE RISK. I think it would be better if we can excuse .OB and .PK [which I know you dont buy, anyway], then it would be a great thing. BRVO.OB and others had been the case [where buy and hold did not work] vs few exceptions like GSB where it did work. I think the risk may not be worth it. If the China story is true, stocks like SOHU should be part of 3SoF rather then any obscure .OB which can cook books or can have layers like Onion.

Also, for starting next year. It will be good idea to have a separate 100k portfolio with 10 holdings for exactly 1 year. This could be termed a midterm/year-end portfolio for members who are neither traders nor long term buy and hold, but still get the benefits of lower taxes and may have shorter time horizon. I think the current 3 stock fire portfolio may well serve short term traders, for holding 33.33% in a single stock means you need to be very short term due to lot of risk associated with position size, even if you have small capital. But on the other hand, if you get into very short term trading then it will put more load on you and may not be a good idea.

So either the fire portfolio could be adjusted to 10 holdings for a year basis, starting January 1 or a completely new one. Which you can update like main. The critical point for this 10 for a year is the time horizon. But obviously I will suggest that it may not be like day trading or the other extreme buy and hold. Akin to swing trading or trend trading.

The current 15 pos. main portfolio, is doing just fine, but if you are actually buying positions in the market then it would be again good idea to have 20 pos. so that you dont move the low floaters if you happen to buy few thousand shares in the market.

Goodluck and yes 3SoF is doing great, but just wanted to give my feedback and some x-mas wish list.

I share the same feeling when I see .OB stock. I remember David once said he would never buy .OB stocks again after CPNE.OB debacle... GSB is different, when David bought it GSB was about to move to AMEX soon.

Also index future is gonna start trading in China soon, which will give traders in China a way to short the market. When Shanghai index went from 5000 to over 6000, more than 1000 stocks in China actually went down. I think a meaningful top is already in for Chinese market, if not the final top. In that case, these Chinese issues traded in US will be dragged down too. Therefore I don't think it is a good idea to initiate any more new China-related stocks: We already have four: SDTH, CHME, ETLT, UTVG, isn't it too much to buy another one? Just my 2 cents.

Quote from: stocky on November 04, 2007, 01:08:53 PM
David, I want to say that everytime I see .OB stocks in the main portfolio I see MORE and MORE RISK. I think it would be better if we can excuse .OB and .PK [which I know you dont buy, anyway], then it would be a great thing. BRVO.OB and others had been the case [where buy and hold did not work] vs few exceptions like GSB where it did work. I think the risk may not be worth it. If the China story is true, stocks like SOHU should be part of 3SoF rather then any obscure .OB which can cook books or can have layers like Onion.

QuoteDavid, I want to say that everytime I see .OB stocks in the main portfolio I see MORE and MORE RISK.

I agree, I was just writing an analysis on demand on CHCG.OB, I wasn't going to buy/recommend it.

QuoteBRVO.OB and others had been the case [where buy and hold did not work] vs few exceptions like GSB where it did work.

Yes, BRVO.OB was when I learned about dilution and its effects. Actually made good money in that stock (in three trades, I believe), but I was lucky, since I was (very) wrong about the long term. I knew little about fundamental analysis back then.

QuoteAlso, for starting next year. It will be good idea to have a separate 100k portfolio with 10 holdings for exactly 1 year. This could be termed a midterm/year-end portfolio for members who are neither traders nor long term buy and hold, but still get the benefits of lower taxes and may have shorter time horizon. I think the current 3 stock fire portfolio may well serve short term traders, for holding 33.33% in a single stock means you need to be very short term due to lot of risk associated with position size, even if you have small capital. But on the other hand, if you get into very short term trading then it will put more load on you and may not be a good idea.

My plan is to close the 3 Stocks on Fire Portfolio when it reaches a 100% return. I'm not going for any short term trading anymore, I don't believe in it as a long term strategy and I'm getting older ... I need to do just the right things from now on, or I won't have enough time.

QuoteGoodluck and yes 3SoF is doing great, but just wanted to give my feedback and some x-mas wish list.

Thanks stocky, I'll consider your suggestions :)

QuoteI share the same feeling when I see .OB stock. I remember David once said he would never buy .OB stocks again after CPNE.OB debacle... GSB is different, when David bought it GSB was about to move to AMEX soon.

OTCBB stocks are generally riskier than stocks traded in the AMEX, Nasdaq or NYSE, no doubts here. But the information provided by OTCBB traded companies is similar, they file the same forms with the SEC. It's just that OTCBB's often have "tricks" which don't happen on national exchanges (where "tricks" are not allowed) ... but if one studies all the SEC filings, I think the chances of knowing if an OB is good or not improve dramatically.

QuoteAlso index future is gonna start trading in China soon, which will give traders in China a way to short the market. When Shanghai index went from 5000 to over 6000, more than 1000 stocks in China actually went down. I think a meaningful top is already in for Chinese market, if not the final top. In that case, these Chinese issues traded in US will be dragged down too.

You probably know the Chinese market better than anyone else here realcoolhead, so this prediction deserves a lot of respect (and the Hang Seng fell 5% today - great timing ;)). But it is a macro call and I don't use them (or try not to use them) anymore in my investment process.

The Chinese stocks I'm holding in the Main Portfolio are trading at rock bottom valuations and I don't think these individual businesses should be worth less just because of a possible crash or bear market in Chinese stocks. As I wouldn't sell my US holdings if there were a US bear market, I wouldn't sell my Chinese holdings if China also went through a bear period.

QuoteTherefore I don't think it is a good idea to initiate any more new China-related stocks: We already have four: SDTH, CHME, ETLT, UTVG, isn't it too much to buy another one? Just my 2 cents.

I agree, no more Chinese stocks.

Ok, I was covering CHCG.OB, but I already knew that, whatever the fundamentals, in the end I would write "the Main already has significant exposure to Chinese micro caps, so I'll leave this one aside, even though fundamentals look attractive".

I'll move on to the next stock on the list, thanks for your thoughts :)

Hello David,

   I'm new here, but i enjoy yours analisys.
   Do you have any opinion about PHGI? Why is it so low?

    Thanks in advance.

Regards,
Pedro

Quote from: Pt Trader on November 05, 2007, 06:36:37 PM
Hello David,

   I'm new here, but i enjoy yours analisys.
   Do you have any opinion about PHGI? Why is it so low?

    Thanks in advance.

Regards,
Pedro

Hi Pedro, PHGI is a Pink Sheets traded stock and my fundamental data service doesn't have information for this type of stocks. They don't file SEC forms as companies traded in the NYSE, Nasdaq, AMEX and OTCBB do, so basically there's no information about these companies, other than "rosy" press releases.

Any opinion or trade in PK stocks is a complete gamble or shot in the dark in my opinion and my advice is for anyone to avoid gambling in the stock market.

When you say "low" you mean the stock price, but what matters is the market cap, which is given by multiplying the stock price by the number of shares outstanding. A stock trading at $0.1 may represent a company worth more than a stock trading at $10, it all depends on the number of shares outstanding. Unfortunately, knowing the number of shares outstanding, and therefore the market cap, is difficult when we're dealing with a PK, because these companies can issue and sell shares as they please, without providing any information to investors.

Thanks for your question and you're Welcome at 3 Stocks on Fire :)

Ok David, thank you very much for this information.

Keep doing your excellente work.

Regards,
Pedro

I think this was the thread where SIMC was talked about, so I hope David doesn't doesn't get mad for mentioning it here. Down hard this morn on a poor ER last night. Just mentioning it for informational purposes only.

David, I hope you will have time to take a look at HIMX.

I think it is a great stock. Surprisingly low P/E. $40 million stock buyback plan.

Thanks

David,
may I kindly asked for an updated SLP analysis?
thanks in advance
O.