Hi, the 3 Stocks on Fire Team is looking for ways to improve its Premium Service even more. Expect news on this soon.
For now let me just say that I'll start analyzing stocks on your request. For now just 3 per trading day, maybe more in the future, if the technological advances allow that.
I thought of putting this message on the Members Corner, but visibility and compromise are higher here, so this is the right place to make it.
When I wake up tomorrow morning (about 7 hours from now) I'll write technical & fundamental analysis on the first three stock tickers that you give me as replies to this thread. Just 1 ticker per user, please.
Thank you :)
cpx
IFON
Thanks David!!
ONT, On2 Technologies Inc.
Sector: Services
Industry: Business Services
Here's the thread on ONT: http://www.3stocksonfire.org/trading/index.php?topic=4142.0
Tia! :)
ADGO
Ok, I have CPX, IFON and ONT (better luck tomorrow Terliso ;D).
Thanks, see ya :)
eln
thx david
Hi, Dave-
I am new to stock market and my roommate referred me to your website. He recommended FNSR to me today. Could you please analyze this stock? Thanks a lot.
P.S. I am still trying the free trial, please give priority to the paid members.
Quote from: easymoney on December 28, 2006, 12:28:34 AM
eln
thx david
Hi easymoney, thanks for your suggestion, but please try to make it for the next time. The way this will work will be like this: everyday at midnight here, that is 7 PM US Eastern Time, I'll post "Give me 3" and the first 3 replies I get are the ones to be analyzed the next day.
Quote from: realmay on December 28, 2006, 01:08:40 AM
Hi, Dave-
I am new to stock market and my roommate referred me to your website. He recommended FNSR to me today. Could you please analyze this stock? Thanks a lot.
P.S. I am still trying the free trial, please give priority to the paid members.
That's cool, who is your roommate? The priority is given to the fastest members, that is, I'll write about the first 3 stock tickers that I get when I write "Give me 3". I guess with time we'll cover most of the stocks members are interested in.
Thanks for your suggestion, better luck next time :)
I'll start writing about buddjas1 suggesting, CPX, now.
1. Profile
Complete Production Services, Inc. (CPX) provides oil and gas field services and products to oil and gas companies primarily in North America. (complete profile here (http://finance.yahoo.com/q/pr?s=CPX))
2. Technical Analysis
2.1. All History Chart
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=31010;image)
CPX's IPO was just last April. The stock debuted on the public market at $27.45, it is trading at $21.41 now. The share price is just above the 50 days SMA which can provide support.
2.2. Short Term Chart
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=31011;image)
Technically the stock is bouncing from support levels provided by the 50 days SMA and the $20.95 horizontal support. It is important for CPX to keep holding above $20.95 on close. The chart still looks bullish to me.
3. Fundamental Analysis
3.1. Number of Shares Outstanding
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=31012;image)
The number of shares issued and outstanding increased 18.7% from the first to the second quarter but I guess that was due to the IPO back in April.
On the latest SEC filing it says: «Number of shares of the Common Stock of the registrant outstanding as of November 1, 2006: 70,658,738». So the current market cap is 70,658,738*$21.51 = $1.52 B.
CRX is a big company, with 4,485 employees.
3.2. Liquidity
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=31013;image)
As you can see on the graph above, CRX has a lot of receivables (and growing) and also a lot of long term debt (currently at $502 M). Almost no cash (just $9 M, which is odd).
The balance sheet worries me about possible dilution going forward, the company has short term liquidity problems.
3.3. Revenues
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=31014;image)
The company had $872 M in revenues so far in 2006. There are no estimates from analysts yet, so I'll just multiply these $872 M by 1.3333 to get a full year revenue estimate of $1.16 B.
The Price to Sales ratio is $1.52 B/$1.16 B = 1.31. The oil & gas equipment services industry has an average Price to Sales Ratio of 2.05. CRX looks cheap in comparison.
3.4. Profits
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=31015;image)
EPS for the nine months so far in 2006 was $1.43. To get a "normal" full year estimate I just multiply $1.43 by 1.3333 and get $1.91. But analysts are expecting $2.05 for the full fiscal 2006 (http://finance.yahoo.com/q/ae?s=CPX), as they estimate $0.63 EPS for the current quarter.
Well, the 3rd quarter was already better than the second, perhaps the 4th will also be better than the 3rd quarter. The estimated earnings multiple is $21.51/$2.05 = 10.49.
The industry average is 17.2.
CPX indeed looks cheap, considering revenues and profits. I just want to make another test, probably I should introduce it to all analysis I make going forward, which is the Net Profit Margin.
3.5. Net Profit Margin
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=31016;image)
This net profit margin of 12.4% in Q3 is quite fat. I like to see a high and stable number here.
3.6. Recent News
As I saw on the balance sheet analysis, the company needed cash:
• Complete Production Services Announces Commencement of Private Placement of $600 Million of Senior Notes (http://biz.yahoo.com/bw/061114/20061114006590.html?.v=1)
Business Wire (Tue, Nov 14)
It closed the deal for $650 M in 8% notes:
• Complete Production Services Announces Closing of $650 Million of Senior Notes (http://biz.yahoo.com/bw/061206/20061206005953.html?.v=1)
Business Wire (Wed, Dec 6)
It doesn't say the notes are convertible to common shares, I guess they're not. That may explain why the 8% interest rate (which is a bit high). It seems they were paying more to the bank, so they settled this deal with bond investors. Better, much better than diluting shareholders value by issuing and selling shares.
4. General Overview
I guess the only concern I had was the balance sheet, but that concern was addressed by this private placement of senior notes.
Revenue, EPS and Net Profit Margin show an attractive picture. Technical analysis is also bullish.
My outlook on CPX is positive, good luck buddjas1 :)
1. Profile
InfoSonics Corporation (IFON) distributes wireless handsets and accessories in the United States and Latin America. Its distribution and solution services include product testing, approval and certification, light assembly, warehousing, logistics services, marketing campaigns, warranty services, and end-user support. The company provides its end-to-end handset and wireless terminal solutions to network carriers, agents, resellers, distributors, independent dealers, and retailers. Infosonics was founded by Joseph Ram in 1994 and is headquartered in San Diego, California.
2. Technical Analysis
2.1. All History Chart
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=31019;image)
IFON was dead until November 2005 when it took off for a 300% gain in just about two months, after a huge gap up (this is why I don't bother all that much buying after a big gap up).
You can see the stock's history on the chart. The 50 days SMA is below the 200 days SMA, which tells me the long term trend is bearish.
2.2. Medium Term Chart
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=31020;image)
IFON has fallen quite a lot since its June highs of $17. I wonder why (I guess I'll find out soon). There was a big gap down in August that took the stock below the 200 days SMA and it has closed below that critical benchmark ever since.
The news that caused that 31% gap down was the following:
• InfoSonics quarterly profit tumbles; shares fall (http://us.rd.yahoo.com/finance/external/cbsm/SIG=11iiumket/*http://www.marketwatch.com/News/Story/Story.aspx?guid=%7bD9FE31E7-A9D7-45F9-AF20-F7829BD3656D%7d&siteid=yhoo&dist=yhoo)
at MarketWatch (Thu, Aug 10)
2.3. Short Term Chart
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=31021;image)
This stock indeed looks interesting, look at those huge gaps on the chart. This action can be referred as a bullish reversal island if the price continues to climb.
Let me just check which news made these violent technical developments:
The gap down:
• InfoSonics 3Q Profit Tumbles (http://biz.yahoo.com/ap/061109/earns_infosonics.html?.v=1)
AP (Thu, Nov 9)
And the gap up, on the highest volume on the company's history, was due to the following news:
• InfoSonics and LG Partner to Provide Handsets for the Caribbean and Select Countries in Latin America (http://biz.yahoo.com/bw/061227/20061227005054.html?.v=1)
Business Wire (Wed 8:30am)
I haven't read the news yet (I'll leave that to the fundamental part of the analysis). Technically there's the possibility of a bullish reversal, but for now that's just a possibility, the medium and long term trends are still bearish, perhaps the stock needs some more time to build a base.
Let's check the fundamentals.
3. Fundamental Analysis
3.1. Number of Shares Outstanding
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=31022;image)
The number of outstanding shares was steady throughout 2004 and 2005, but as the company incurred losses, they sold shares in the open market or made private placements, because the share count increased almost three fold in 2006 (these were my first thoughts when I saw the numbers).
This way a shareholder gets a double whammy of bad news, which is, the company is reporting losses (no it isn't, I saw that further down the analysis) and at the same time is diluting shareholders value by issuing more shares (so each individual share represents less and less of the company's value, hence the share price declines).
By the latest share count on November 10, the market cap is 14,120,068*$5.56 = $78.51 M.
3.2. Liquidity
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=31023;image)
The balance sheet looks acceptable. Probably there was some private placement along the way in 2006, let me see ... I can't find anything, but I found this news:
• Scott+Scott, LLC Notifies Investors of Filing Deadline: Six Business Days to Move for Lead Plaintiff Appointment in Class Action Against Infosonics Corp. -- IFON (http://biz.yahoo.com/pz/060804/103322.html)
PrimeNewswire (Fri, Aug 4)
Some problem with warrants and warrants conversion, interesting. It might explain at least part of the sudden rise in the share count.
3.3. Revenues
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=31024;image)
Wow, analysts are pretty aggressive on their revenue estimates going forward, and I bet these estimates still didn't count with yesterday's news.
The market cap is just $78.51 M, but 2007 revenue estimates are for $416 M. This is interesting. The company had $179 M in revenues in the first 3 quarters of 2006, but as with most retailers and distributors, Q4 is the strongest. The company needs to sell $52 M in Q4 to get to the $231 M 2006 estimate, this will be a peace of cake, no doubt it will beat the 2006 full year revenue number by a wide margin (it sold $67 M in Q3 alone).
3.4. Profits
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=31025;image)
Now let me read the news that caused those ugly gap downs. No surprises there, the company will probably make $0.22 EPS in 2006.
At $5.56 price per share, the earnings multiple is something like 25. The Electronics Wholesale industry average is 15.7. But IFON is growing much faster than its industry, given its growing South American presence.
Analysts estimate EPS of $0.49 for fiscal 2007, so the forward earnings multiple is 11.
4. General Overview
This company has many tricks, you can see how my analysis evolved. I guess the stock looks cheap here, but yesterday's 44% rise can't be justified by the LG news. LG is just another trademark of cell phones for the company to sell and provide logistics services, sure it is a positive development, but not a huge one, I think.
There were many confusions over warrants, a decline in EPS and all, but longer term I believe this company will come back higher, given its revenue growth rate and probably future EPS numbers.
Technically the stock might have done a bullish reversal island, with the highest volume on record (although it closed way off its highs). Perhaps the LG news is the catalyst that will turn the stock around, or else it will come back down to close the gap, since the news wasn't all that significant.
So, my indecision is on the short term, not the long term, which I consider very attractive.
I've been burned before by not paying all the attention I should to the short term, but overall I consider IFON as an attractive stock to buy at this point.
Perhaps I'll even recommend it for the 3 Stocks on Fire Portfolio today, let me just study some more issues.
Good luck njshiva :)
(I see now that there was a restatement of the Q1 results on June 12, 2006, reversing a $0.11 a share profit to a loss of ($0.07) - so my EPS graph and 2006 EPS comments on the analysis are wrong, the company is losing ($0.02) per share so far this year).
But my main interest with this investigation is to explain the sudden share count increase. I want to know if it was just an accounting problem (a past problem) or related to a management's attitude towards diluting shareholders value. I need to dig more ...
Finally I found the missing part of the puzzle:
«On May 30, 2006, our Board of Directors approved a two -for-one stock split of our outstanding common stock. The stock split was accomplished through a 100% stock dividend, providing our stockholders with one additional share of common stock for every one share held as of the record date. The split was paid on June 19, 2006 to stockholders of record as of June 9, 2006. Immediately following the stock split, our outstanding shares of common stock increased from 6,948,034 shares to 13,896,068 shares of common stock.»
This split is already reflected on my Metastock chart. This piece of information makes me a believer in the theory that IFON had severe problems with that restatement of the Q1 2006 results, but the future looks bright. The company is selling at a fraction of 2007 estimated revenues, to be more precise, the forward sales multiple is just $78.51 M/$416 M = 0.19. The industry average is 0.52.
Also IFON's revenue growth rate from 2006 to 2007 is estimated at 80%, and the industry average is just 9%.
I think IFON shares are quite attractive at this point.
Thanks for the dd David. Appreciate it.
I am expecting them to give another PR regarding the LG news. My only concern is there is no insider buys at all.. if they already knew something good is coming up...hmmm.
NT
Thanks
uc.
TMTA
Thanks, David.
Quote from: David Randolph on December 27, 2006, 07:35:46 PM
Ok, I have CPX, IFON and ONT (better luck tomorrow Terliso ;D).
Thanks, see ya :)
will there be an ONT analysis today?
On2 Technologies (ONT - commentary - Cramer's Take - Rating) gained after an analyst with ThinkEquity Partners began coverage on the video compression technology firm with a buy rating, targeting a per-share price of $1.40. Shares of the Clifton Park, N.Y.-based company were adding 4 cents, or 3.7%, to $1.13.
PRGX
thx,
Jerom.
;)
Quotewill there be an ONT analysis today?
Yes La-onda, I'm working on that now.
Hey guys, it's not worth it to put more tickers on this thread (or I would never be able to keep up with the requests), just the 3 first tickers after I post a new "Give me 3 Stocks" thread will be analyzed.
I'll put the new thread at 7 pm ET.
ONT analysis will still be posted on this thread and before 7 pm I'll move it to the Members Corner and start a new one, understood?
Thanks for your participation :)
1. Profile
On2 Technologies, Inc. (ONT) operates as a video compression technology firm. It develops a proprietary technology platform and video compression/decompression (codec) software to deliver video to closed area networks, such as set-top boxes, Internet, and wireless devices.(complete profile here (http://finance.yahoo.com/q/pr?s=ONT))
2. Technical Analysis
2.1. All History Chart
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=31033;image)
ONT is one of those dead corps of the tech bubble debacle. I tend to like this kind of stocks now that a new bull market in technology is unfolding.
2.2. Medium Term Chart
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=31034;image)
I see a pattern of higher lows and higher highs since 2005. Also there was a golden cross about a month ago (the 50 days moving average crossed above the 200 days SMA).
2.3. Short Term Chart
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=31035;image)
The short term trend is bullish. I sure like the technical picture, let's check the fundamentals.
3. Fundamental Analysis
3.1. Number of Shares Outstanding
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=31036;image)
This company has been living from issuing and selling shares. I see heavy dilution not just every year, but every month. A bit less dilution in 2006, though.
The current market cap is 101,199,303*$1.09 = $110.3 M.
3.2. Liquidity
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=31039;image)
The current ratio stands at 5.24, the company doesn't have a short term liquidity problem, with about $4.6 M in cash.
3.3. Revenues
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=31037;image)
Revenues were incipient until 2005. But in 2006 they're growing quite strongly from 2005 levels as you can see on the graph above. I can clearly see revenues increasing even on a quarter by quarter basis. For Q1 I have $1.217 M, for Q2 $1.535 M and for Q3 2006 I have $1.703 M. If ONT makes, say, $1.9 M in revs in the 4th quarter, it will show full year revenues of $6.355 M.
Still, the revenue multiple would be an excessive $110.3 M/$6.355 M = 17. Excessive? It depends on the gross and net profit margins.
I see, for DIVX gross margin is 92% and net profit margin is 20%. This is very high. By the way, DIVX's revenue multiple is 15.
3.4. Profits
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=31038;image)
The company lost big bucks over the last seven years.
4. General Overview
I can understand the recent tick up in the stock, revenues are growing a lot from a very small base. DIVX is the leader in this video compression industry and probably ONT is its closest competitor.
These two companies are still so small in revenue terms. But their gross and net income margins (well, ONT is still losing money) perhaps justify the extremely high revenue multiples.
They look like a biotech or software wonder.
You have to believe the online video mania to buy ONT. Do I believe video will be the way of communication of the future? I do.
Damn it, I should have made this analysis earlier, the stock is up 12% today ;D
Despite all the financial problems this company had, the market always looks to the future, and $110 M doesn't look like a very high price to pay to be involved in the current "go video" global trend. Also, the quarterly tick up in revenues might be saying ONT's time is arriving.
Good luck :)
Hi David
Once congratulations for your wonderful job and the way you are teaching us this business
I wonder if you can post a technical analysis of the "XAU" or some of the gold stocks like AUY,HL, KGC,SLW
Thank you
FPP ;D
As I'm really, really bad at evaluating the finances of companies, I'd really appreciate an opinion on this little oil/gas company.
News was out today:
FieldPoint Petroleum Announces Acquisition; Shrs Up 15.6%
Dow Jones Newswires - December 28, 2006 2:08 PM ET
Related Quotes
Symbol Last Chg
FPP Trade 2.29 +0.24
Real time quote.
DOW JONES NEWSWIRES
FieldPoint Petroleum Corp. (FPP) is acquiring a working interest in the Bilbrey Field in Lea County, N.M., for $1.67 million.
FieldPoint shares recently traded at $2.37, up 32 cents, or 15.6%.
The Austin, Texas, company said the deal is expected to add about 108,000 net barrels of oil equivalent, which would replace more than 100% of the company's 2006 production.
I must admit that I've owned it a long time, and it has been - eh, shall we say...difficult!
Thanks.
Hey guys - We need to make sure we read at least part of each thread to get an idea about what's taking place here. I'm sure David is getting tired of reminding everybody that he's taking the first three tickers posted AFTER he makes the "Ok, now" post around 7pm.
David - maybe changing the subject to something like: Give me (only) 3 Stocks / or Give me 3 Stocks at 7pm would make it more clear.
dNick