3SOF

Good morning :)

As promised I took a more in depth look at BULK, BULKW and BULKU and I found out that BULKW is a convertible warrant that allows you to buy one BULK share at $5, so, with BULK at $6.65 its intrinsic value is $1.65 (although there's more than intrinsic value to add, like the speculative premium, time, etc). But with BULK shares below $5, BULKW is worth $0 or close to zero, so it is a very risky proposition.

BULKU are units that allow you to have two BULKW warrants and 1 share of BULK for each BULKU owned. That puts BULKU's intrinsic value at $6.65 + ($1.65*2) = $9.95.

I think BULKW and BULKU are risky assets and are trading somewhat above fair value.

As for BULKU shares, these warrants are convertible into 65,550,000 shares of common stock, and that more than doubles the current market cap, erasing the potential that I saw on my first attempt at analyzing the stock.

I'm not willing to sell the 3 Stocks on Fire Portfolio (http://www.3stocksonfire.org/3stocksonfire_3sof.php)'s current holdings today.

But let's have some suggestions to study other stocks, thank you for your participation :)

CPST moving today up +7% volume over 200k already.

REFR on the move volume over 100k on its way over 4% now.

ONSM

It's not profitable yet but it is growing well.  I like the insider purchases the last couple of months.  They are also doing business with Fortune 100 companies. Technicals look strong.

Here are some recent news
'Hillary Clinton for President' Campaign Relies on Onstream Media for Webcast Series  (http://biz.yahoo.com/prnews/070207/clw143.html?.v=7)

Onstream Media Corporation Fiscal 2006 Fourth Quarter and Fiscal Year End Conference Call Recap  (http://biz.yahoo.com/prnews/070123/cltu136.html?.v=7)

Quote from: nullzero on February 12, 2007, 09:35:49 AM
CPST moving today up +7% volume over 200k already.

Technically CPST's move can only be interpreted as a rebound in a descending trend.

Fundamentally the company lost "just" $8.5 M in the calendar 2006 4th quarter, less than the $10.4 M it lost in Q3, but not enough to push this stock much higher, given that it is a $95 M market cap company already, with calendar 2006 sales of just $22.76 M and huge losses every quarter.

Thanks for the suggestion :)

Short on Fire CBAK?

Quote from: nullzero on February 12, 2007, 09:39:06 AM
REFR on the move volume over 100k on its way over 4% now.

Yep, technically REFR looks quite bullish. I guess I failed to see the impact of Hitachi's news on the company. Still, I maintain that this is a $170 M market cap company with just $158 K in revenues over the last four quarters and a book value of just $3 M.

When it goes down it will tank hard, I would avoid REFR, despite the chart.

Great run so far, though :)

Press release from CPNE.OB:

• Commerce Planet Will Release Q-4 2006 Guidance at the 19th Annual Roth Capital Partners Conference (http://biz.yahoo.com/prnews/070212/lam057.html?.v=82)
PR Newswire (Mon 10:06am)

Ten days to go to the big news ! I'll just sit tight holding CPNE.OB.

nice news :)

GGBM .. very nice this morning .. still holding 1/2 shares from Friday morning

GGBM up over 10%
TRMM also moving again up over 10%

Quote from: prodigykid6 on February 12, 2007, 09:39:58 AM
ONSM

It's not profitable yet but it is growing well.  I like the insider purchases the last couple of months.  They are also doing business with Fortune 100 companies. Technicals look strong.

Here are some recent news
'Hillary Clinton for President' Campaign Relies on Onstream Media for Webcast Series  (http://biz.yahoo.com/prnews/070207/clw143.html?.v=7)

Onstream Media Corporation Fiscal 2006 Fourth Quarter and Fiscal Year End Conference Call Recap  (http://biz.yahoo.com/prnews/070123/cltu136.html?.v=7)

Yes, I like ONSM ... it was a shame that I was thrown out of board due to short term volatility when I held it. My hands were weak on ONSM due to the losses you're referring to (and the weak balance sheet), but I think the future is bright for ONSM, especially with video on the web getting a lot of traction as it is happening now.

But I'm not sure, I would have to disrespect fundamental analysis to buy it, because the balance sheet shows negative working capital and that almost always leads to dilution.

I'm neutral on ONSM.

NTRZ on fire, your comments David please

Quote from: nullzero on February 12, 2007, 10:17:58 AM
nice news :)

Well, it wasn't news, since on previous press releases they already said they would release 4th quarter results by the end of February. Now we just know CPNE's CEO, Michael Hill, will provide some guidance just before that ... not really market moving news.

Quote from: kpusan63 on February 12, 2007, 10:20:27 AM
GGBM .. very nice this morning .. still holding 1/2 shares from Friday morning

This really ain't my kind of chart, but good luck :)

Hello David,

I hope that it is not raining too bad where you are, and that the sun comes out soon. I am holding a position in ALY, and would like your input on whether I should continue to hold over the intermediate term. ALY recently diluted the shareholder base by 6 Mil shares, through a secondary offering at $17.65. Aly's market cap is near 430 Mil.

ALY's growth is fueled through a combination of acquisitions and organic growth in the oil drilling equipment and services industry, and has been explosive in the past 18 months. The current analyst expectations are that the company will only grow 10-15% in 2007, and I believe that the management team has proved that they can grow the company at a much higher rate.

I believe that the recent dip is a result of the dilution, and because oil is currently out of favor. Can you see the stock rebounding in the next few months, to reach new highs - or do you see the stock floundering as the management team continues to dilute the shareholder base?

If you would be so kind, please take a moment to share your keen insight with me.

Have a terrific day!

Robbie

TRMM back on fire today

Good looking chart

Quote from: nullzero on February 12, 2007, 10:05:45 AM
Short on Fire CBAK?

Well, it looks like my short on CBAK (Short CBAK today (http://www.3stocksonfire.org/trading/index.php?topic=7231.msg76281#msg76281)) was absolutely right. It's a pity my hands were not strong enough.

What a sell off >:D

Anyway, in my view there's no such thing as a short on fire ... you're the one who is on fire today ;D

XIDE -Fully Diluted EPS 3Q-0.18 2Q-1.16 1Q-1.51 4Q-3.05 .

Pretty sure will keep up

PFSW - my concern is the gross margin. they are pretty low. Just looked 10Q breifly, the product segment only have 6%? (not certain about the number).  ecost.com is just an online also runs and will never be profitable. however, PFSW does show good growth in service segment (which have higher margin). Just my 2 cents and I can be totally wrong. good luck

TRMM looking very good again!

QuoteHello David,

I hope that it is not raining too bad where you are, and that the sun comes out soon.

Hi ralekson, actually it is sunny here, but there was an earthquake a couple of hours ago that scared me ??? It is a very rare event, but there was a huge one in 1755 that destroyed half of Lisbon.

Yes, let me take a look at ALY, never heard of that stock before, so thanks for the request :)

The medium and long term technical trend, given by the slope of the moving averages and an ascending trendline, is still bullish. But, as you say, the stock has been weak in 2007.

Fundamentally:

- Market cap is $430 M. Company provides services and equipment to oil and natural gas exploration and production companies, domestically in Texas, Louisiana, New Mexico, Colorado, Oklahoma, Mississippi, Utah, Wyoming, offshore in the Gulf of Mexico, & internationally in Mexico.
- Balance sheet shows growing long term debt, at $262 M now. That can put pressure on future earnings, as interest costs erode net profit margins.
- Revenue trend is quite positive. Growing strongly for eight quarters in a row, which is impressive. Revenue in Q3 alone was $85 M. On average, analysts are expecting revenues of $305 M for fiscal 2006 and $522 M for fiscal 2007.
- In terms of EPS, the company was profitable for the past three quarters and is expected to earn $1.74 in 06 and $2.15 in 07. That puts the forward earnings multiple at 8 which is attractive.

Let's put the dilution issue in context:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=33236;image)

The share count has been increasing about 14% a quarter since Q1 2004 :o

That by itself made the market cap rise 520% without any increase in the share price (that is, the share price rose, but the market cap rose a lot more).

As you say, recently they sold 6 million shares more and sold $250 M in convertible notes to pay down debt. That will put the potential share count at about 45 million and that means the market cap will be around $780 M considering the price the stock is trading now. That will also make it harder for the company to meet the EPS projections, and this way it doesn't look so cheap, with a higher than 1 revenue multiple.

I really don't like dilution and I would say this management doesn't have an history of working for the shareholder's benefit. Yes, they are growing the company, but at the expense of the shareholder, not for the shareholder, because a shareholder needs the share price, not the market cap, to rise!

I'm not a fan, I wouldn't invest in this company, but thanks for the suggestion, good luck :)

An old friend, IBIN ... seems to be seeing some action today

Quote from: KCScott on February 12, 2007, 10:40:17 AM
TRMM back on fire today

Good looking chart

The stock surely threw all weak hands out of board, with Friday's dip below $2.78. I would be glad to see it run above the $3.30 resistance level, towards $4 - $5, I know some people here still hold TRMM. I still trust the fundamental equation I made some days ago that told me TRMM is worth more than $6 a share with the current public information, perhaps I should have bought it for the Main (http://www.3stocksonfire.org/3stocksonfire.php).

Good luck to all patient holders of TRMM :)

NTTL

David, I looked at the covered stock list and didn't find this one listed.  I am surprised it wasn't requested.  Opinion please.

ONXX has been just exploding to the upside!

Hey David - JRJC please

Quote from: TraderStar on February 12, 2007, 11:23:13 AM
An old friend, IBIN ... seems to be seeing some action today

You're probably one of the few friends IBIN has, it is a very low volume stock. Anyway, crossing the 200 days moving average to the North today, with 56 K shares traded, so let's take a brief look at it.

- Market cap is $12 M. The Company is a holding company for three software subsidiaries: IBSG, a provider of turn-key digital service center software; Secure Blue, Inc., a Sarbanes-Oxley and security software solution provider and IBSD, a software development, maintenance.

Ahhhh, now I see what IBIN is, my friend too :D Didn't they change the symbol?

The stock barely moved all these months ... it looked so attractive. But I remember the problem was the receivables that were too high. Let me check the balance sheet now. Still $11.68 M in receivables.

- Revenues look nice, around $2.8 M a quarter and the company is profitable.

From what I read on the recent press releases fundamentals have been slowly but surely improving, and I think IBIN is undervalued at this point. It is about the same price (post reverse split) I bought perhaps a year ago, so ... kind of dead stock, but I like it fundamentally. Someday, it will run higher.

Quote from: kpusan63 on February 12, 2007, 11:32:37 AM
NTTL

David, I looked at the covered stock list and didn't find this one listed.  I am surprised it wasn't requested.  Opinion please.

NTTL.OB is enjoying a nice bull run in 2007. The chart is bullish. But volume is still low, just $178 K, I'm surprised you're surprised this wasn't covered yet :)

We covered just a bit more than 200 stocks so far, but there are what, 7,000 small caps out there? Still a long, long way to go to know them all ... but I have time, in fact, all the time in the world.

Brief fundamental study of NTTL.OB:

- Market cap is $16 M. The Company develops telecommunications software as well as a web security and financial software packages. The Company is a telephony company in the exploding VoIP industry.

"Exploding VoIP industry" probably means financials are lousy ... let's see, the balance sheet, yep, negative working capital of ($488 K).

Revenues were declining to almost zero (I bet they changed the business model), but had a big jump in Q3 2006, to $2.6 M.

Ok, despite the weak balance sheet I guess NTTL.OB is involved in several businesses that have huge potential, like the AVOP (http://www.avop.net/) and the www.tougi.com.

The market cap doesn't look too high at about $16 M and the chart is awesome.

I would say NTTL.OB is a nice catch, good luck :)

TRT reported earnings last Friday.   Not really on fire today but holding up well after the gap up on Friday.

Trio-Tech Reports Fiscal 2007 Second Quarter Net Income of $0.25 Per Share Versus a Loss From Continuing Operations of $0.15 Per Share as Revenue Increased 89%
Friday February 9, 7:30 am ET

Quote from: nullzero on February 12, 2007, 11:45:43 AM
ONXX has been just exploding to the upside!

Thanks for the heads up, in at 22.67, looking to maybe sell around 23.50.

Quote from: David Randolph on February 12, 2007, 11:30:00 AM

Quote from: KCScott on February 12, 2007, 10:40:17 AM
TRMM back on fire today

Good looking chart

The stock surely threw all weak hands out of board, with Friday's dip below $2.78. I would be glad to see it run above the $3.30 resistance level, towards $4 - $5, I know some people here still hold TRMM. I still trust the fundamental equation I made some days ago that told me TRMM is worth more than $6 a share with the current public information, perhaps I should have bought it for the Main (http://www.3stocksonfire.org/3stocksonfire.php).

Good luck to all patient holders of TRMM :)

Thank's!!! ;D ;D ;D

VEGF...on fire very soon

CBTE...interesting spike today...but low news about the merger....

Quote from: makingmoney on February 12, 2007, 10:58:54 AM
PFSW - my concern is the gross margin. they are pretty low. Just looked 10Q breifly, the product segment only have 6%? (not certain about the number).  ecost.com is just an online also runs and will never be profitable. however, PFSW does show good growth in service segment (which have higher margin). Just my 2 cents and I can be totally wrong. good luck

I agree, gross margin in Q3 2006 was just 11.7%.

Why do you say www.ecost.com will never be profitable? www.tigerdirect.com, a competitor, is very, very profitable. I think long term average annual e-commerce growth of 20% plus will lift all boats, www.ecost.com inclusive, which is expected to sell $140 M in 2007.

Also consider that PFSW is trading at 1/10 of annual revenues and below book value.

Thanks for your 2 cents on PFSW makingmoney :)

Quote from: la-onda on February 12, 2007, 10:25:52 AM
NTRZ on fire, your comments David please

La-onda, la-onda, you really like to tease me bringing up stocks that I don't understand >:D ... and you never answer when I ask you why you like these strange, strange stocks.

NTRZ.OB, for example. It is a $247 M market cap company with just $17 M in revenues over the last four quarters. If they made software, an internet based business or something like that, perhaps I could understand ... but rice?

I've been wrong on that stock (as it is breaking out to new highs), but I can't see the point of buying such an overvalued (at least in terms of revenue multiple) stock. Again, can you please explain to me why you like NTRZ.OB?

Thank you :)

Quote from: tokyopua on February 12, 2007, 12:27:26 PM

Quote from: nullzero on February 12, 2007, 11:45:43 AM
ONXX has been just exploding to the upside!

Thanks for the heads up, in at 22.67, looking to maybe sell around 23.50.

Out for a quick 6% gain, maybe it can go higher but I wont complain getting that out of a stock that is up almost 100% lol  8)

Quote from: David Randolph link=topic=8923.msg88123#msg88123

Why do you say www.ecost.com will never be profitable?
/quote]

David, this is just my guess. I agree a lot boat will be lifed by e-commerce growth. ecost may be one of them. It just that it need some proof of that. may be a strong number in Q4 can do that.

Quote from: nullzero on February 12, 2007, 10:21:18 AM
GGBM up over 10%
TRMM also moving again up over 10%

GGBM up over 10% in the morning, down over 10% in the afternoon. Those descending resistances can really kill a stock. Now, where's the floor?

I hope kpusan63 sold his other half.

ETLT.OB is trading at the $0.79 support, prior resistance level. I think the stock will rebound towards the close, the current level is somewhat crucial from a technical standpoint.

Fundamentals look very attractive to me, as I've studied some of the company's recent businesses. They're not sexy, but profitable.

ETLT.OB is trading at about four times estimated (by me) 2007 EPS of $0.20. It should be at least a $2 stock, not $0.79. I'll have strong hands with this one.

Quote from: David Randolph on February 12, 2007, 01:01:28 PM

Quote from: nullzero on February 12, 2007, 10:21:18 AM
GGBM up over 10%
TRMM also moving again up over 10%

GGBM up over 10% in the morning, down over 10% in the afternoon. Those descending resistances can really kill a stock. Now, where's the floor?

I hope kpusan63 sold his other half.

David, after the stock hit $4.30 which was around Friday's high I placed a stop under $4 and was stopped out $3.88. I was in at $3.05 and $3.08

Moving on!!! :P

Hi David,i know you don't like bio's but GENR is definately on fire.Got in this one last [email protected],any thoughts?

Agree about NTTL with David. I like "sleepers" without resistance .Can be very nice play.

NTMD running up +15%
ADZA up over 50% as well.

Healthcare sector seems to be getting played today.

Quote from: 2bun on February 12, 2007, 01:16:31 PM
Hi David,i know you don't like bio's but GENR is definately on fire.Got in this one last [email protected],any thoughts?

Well, GENR chart is a good example to why I don't like biotech stocks. They usually, not always, but usually trend down.

Fundamentally:

- Market cap is $34 M. A biopharmaceutical company committed to developing medicines to address substantial unmet medical needs in major pharmaceutical markets. The Company's research and development efforts are focused on anti-angiogenesis and respiratory diseases.
- Balance sheet looks strong, with $34 M in Total equity, so the price to book value is about 1.
- Revenues are almost zero and the company has been losing between $4 M and $8 M every quarter.

Technically a gap will be closed when/if the stock touches $0.38. The news that opened that gap down on January 4, 2007, was:

• Genaera to terminate Evizon program, cut workforce by 30% (http://us.rd.yahoo.com/finance/external/cbsm/SIG=11iiumket/*http://www.marketwatch.com/News/Story/Story.aspx?guid=%7b2E97295D-FC58-4528-BBA4-368249FCDF9F%7d&siteid=yhoo&dist=yhoo)
at MarketWatch (Wed, Jan 3)

Now they will pursuit a market opportunity at treating obesity with trodusquemine, but still looking for a phase I trial over the first half of 2007. I don't know how investors support these companies for so long (I guess they don't, that's why it keeps going down).

Anyway, trading just around book value now it seems GENR perhaps found at least a temporary bottom. But I would take profits on a further rally to the close the gap area of $0.38, as the company's future and hypothetical fundamentally positive developments will probably take years to unfold. In the meantime it will just burn cash.

Good luck :)

Quote from: David Randolph on February 12, 2007, 12:49:21 PM

Quote from: la-onda on February 12, 2007, 10:25:52 AM
NTRZ on fire, your comments David please

La-onda, la-onda, you really like to tease me bringing up stocks that I don't understand >:D ... and you never answer when I ask you why you like these strange, strange stocks.

NTRZ.OB, for example. It is a $247 M market cap company with just $17 M in revenues over the last four quarters. If they made software, an internet based business or something like that, perhaps I could understand ... but rice?

I've been wrong on that stock (as it is breaking out to new highs), but I can't see the point of buying such an overvalued (at least in terms of revenue multiple) stock. Again, can you please explain to me why you like NTRZ.OB?

Thank you :)

David,

I don't think you have ever taken the time to look beyond the P/S ratio, which is really a shame.

NTRZ is a company that has an extremely valuable patented technology to convert a waste product into a highly priced food product.

They are not able to meet the demand despite running the factories at 24/7 and is having margins that would make most (if not all) companies in this industry very jealous.

I love to invest in companies which profit is not depending on demand but rather how fast they can expand the supply. Nutracea is one of those cases.

3SOF has a quite good thread on NTRZ. Take a little time off duiring the weekend and read it through. There is lot more to NTRZ than the P/S ratio.

Anyone outthere with the e-mail of [email protected]?

I see that you applied for a 14 days free trial to the 3 Stocks on Fire Premium service (http://www.3stocksonfire.org/_advantages.php) (thanks for the interest), but your e-mail returns my e-mails and you don't have a registered username. This way I'm unable to give you access to the Premium Area.

Help needed :)

David, any new thoughts on PMED today? Do you still feel like its due for another leg up or are we in for a slow bleed till we get some news on sales?

QuoteDavid,

I don't think you have ever taken the time to look beyond the P/S ratio, which is really a shame.

I would never feel ashamed by not knowing everything there is to know about a stock, especially when that stock is trading at 15 times revenues and it is an OTCBB traded stock that lost money every year since inception. Not even Google trades at 15 times revenues.

I could read everything that has ever been written about NTRZ.OB and that wouldn't change the fact that it is trading at 15 times revenues and I would never touch the stock (unless it had a net profit margin north of 30%, which isn't the case).

Anyway, I hope it rises 10 fold, I have nothing to lose by being wrong here :)

Quote from: runner2847 on February 12, 2007, 02:38:18 PM
David, any new thoughts on PMED today? Do you still feel like its due for another leg up or are we in for a slow bleed till we get some news on sales?

Usually stocks at least make a double top before going down (even if they want to dilute shareholder's value, which can be the case with PMED, if the market maker knows what he's doing, he'll make another bullish leg before everything is over).

It is a high reward/high risk situation, I wish you good luck :)

Hi Dave!!  Could you please check TESS?.  I know the volume is low but it's moro than 200 % and it's almost US 2M traded today.  Thanks

Quote from: David Randolph on February 12, 2007, 12:34:53 PM

Quote from: makingmoney on February 12, 2007, 10:58:54 AM
PFSW - my concern is the gross margin. they are pretty low. Just looked 10Q breifly, the product segment only have 6%? (not certain about the number).  ecost.com is just an online also runs and will never be profitable. however, PFSW does show good growth in service segment (which have higher margin). Just my 2 cents and I can be totally wrong. good luck

I agree, gross margin in Q3 2006 was just 11.7%.

Why do you say www.ecost.com will never be profitable? www.tigerdirect.com, a competitor, is very, very profitable. I think long term average annual e-commerce growth of 20% plus will lift all boats, www.ecost.com inclusive, which is expected to sell $140 M in 2007.

Also consider that PFSW is trading at 1/10 of annual revenues and below book value.

Thanks for your 2 cents on PFSW makingmoney :)

I have strong hands on this one despite a drop. David, with the dip, would it be reasonable to purchase additional shares at such a discount? I await your guideance and this seems the logical step. Thanks!

Quote from: nica33 on February 12, 2007, 03:31:22 PM
Hi Dave!!  Could you please check TESS?.  I know the volume is low but it's moro than 200 % and it's almost US 2M traded today.  Thanks

Thanks for the suggestion nica33, the chart looks great, you really know how to pick them ;)

Let me make some quick fundamental tests on TESS:

- Market cap is $144 M. Provider of integrated product plus supply chain solutions to professionals that design, build, run, maintain and use wireless voice, data, messaging, location tracking and Internet systems.
- Balance sheet is weak, as cash balance is $0 (or not disclosed by the company, strange situation).
- Revenues in 2006 were $459 M
- EPS in 2006 was $1.06. Estimates for the next fiscal year are for EPS of $1.56, so the forward earnings multiple is 17.5.

Here's the company's website: http://www.tessco.com/. I like the stock, both in technical and fundamental terms.

OSTE

QuoteI have strong hands on this one despite a drop. David, with the dip, would it be reasonable to purchase additional shares at such a discount? I await your guideance and this seems the logical step. Thanks!

I agree, logical, but a speculator can't work based on "common sense".

The obvious thinking is: "if it was attractive at $1.10 - $1.15, it is even more attractive at $1.05", right?

The problem is it doesn't matter how hard a man studies or how well he knows the market or a particular company, he can and will without a doubt be wrong in some occasions. If you average down when losing, you're magnifying the loss potential.

The market talks to traders that are willing to listen. When the market agrees with me, I get more confident that I'm right. When it disagrees, even if momentarily as I think it is happening with PFSW, I get less confident. I couldn't get less confident and tell you to add more, could I?

"Strong hands" means holding for a large move, ignoring short term fluctuations. It doesn't mean hold whatever happens and it sure doesn't mean to fight the market, by buying more at a loss.

I could average up my buying price, but never, ever, average down, as that is a loser's game in my opinion.

You see how I mix technical and fundamental analysis to achieve superior long term performance. I believe I know what I'm doing, and why I'm doing it, but I don't close my mind to what the market is telling me, because, ultimately, the market always knows better!

I see that. Thanks for insight.

The 3 Stocks on Fire Portfolio (http://www.3stocksonfire.org/3stocksonfire_3sof.php) took a further 1.63% dip today to $24,964, still up 66% since  inception in January 19, 2007.

But the 3 stocks held remain bullish and I still see great upside potential for them, especially for CPNE.OB and ETLT.OB, since in PFSW I'm experiencing a loss and as I wrote, I work my mind to get less confident when the market, at least at the current moment, doesn't agree with my views for that particular stock.

The Main Portfolio (http://www.3stocksonfire.org/3stocksonfire.php) actually did very well today :)

Tomorrow is another day to study and potentially trade stocks, I'll be here ;)