You know I've been considering buying SILC to the Main Portfolio (http://www.3stocksonfire.org/3stocksonfire.php), but yesterday I got to the final conclusion that we really want to invest in this company.
Why?
There are several financial factors, as the very strong revenue and profit growth coupled with an attractive valuation, but another one yesterday served as a catalyst for me to stop being afraid and just buy the stock!
Did you saw how it was hard to enter www.3stocksonfire.org yesterday? That's because there were too many people trying to access the same location of the website at the same time and the server couldn't handle it (there are other factors, like the programming code (Ramsburg is working to solve that, but it may take a while)).
SILC has the right products and services to improve servers, as you can read on their website: http://www.silicom.co.il/pgx.php
The market cap of the company is just $75 M and I estimate net income in 2007 of $6.44 M (it was $2.6 M in 2006, up 97% from 2005 levels). If the stock were to trade at the Networking & Communication Devices industry average earnings multiple, which is 33.6, and if my estimates are met, the stock would close 2007 with a $216 M market cap, and that means a price per share of $42.28.
Over the next updates I'll go through all the charts needed to justify this recommendation, but I need to be more agile to buy stocks. If you want to check their financials and revenue and EPS trends, you can use this powerful link: http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?Symbol=silc&lstStatement=Income&stmtView=Qtr
Trading Plan:
Buy 6.66% of capital in SILC to the Main Portfolio (http://www.3stocksonfire.org/3stocksonfire.php)
(don't put orders on the pre-market or else you'll create an imbalance at the open and put the price up on ourselves. There's not much liquidity, so go easy on the buying action. I recommend buying the stock between $14 and $15, so there's time)
Found another catalyst for SILC to grow a lot over the next couple of years, just read this news on their website dated December 18th, 2006:
SILICOM BUILDS MOMENTUM IN EXPLODING WAN OPTIMIZATION MARKET:
ADDITIONAL TWO DESIGN WINS ACHIEVED (http://www.silicom.co.il/pgx.php?p2=396)
(sorry for the caps)
Now consider RVBD and ALLT market caps of $2.2 B and $209 M respectively, and then compare their financials with SILC, and you'll see SILC looks undervalued, considering the very hot sector it is involved.
I'll dig more for the upcoming updates, but you can buy with ease, technically the stock looks like it is making a top (usually that's when the bull trend resumes ;D)
I know I recommended buying SILC just yesterday, and I still feel it is a great stock/company.
But if the general market enters a bear market as I think it will (http://www.3stocksonfire.org/trading/index.php?topic=9050.msg90421#msg90421), the multiple we'll attach to a stock like SILC will necessarily be lower, say 8 times earnings? To have that type of multiple SILC would have to be a $6.4 stock. I guess at $10, when it closes that gap, could be enough. We'll see about that.
But today I'll take a small 3% loss on SILC, I need to protect capital.
a break of 12 is a good short 8)
SILC came off 9% from my selling point, but I kept studying the stock and I believe the opportunity is too good to waste, it doesn't matter if it is a bull or a bear market.
The following press release is crucial to me:
• Silicom Builds Momentum in Exploding WAN Optimization Market: Additional Two Design Wins Achieved (http://biz.yahoo.com/bw/061218/20061218005468.html?.v=1)
Business Wire (Mon, Dec 18)
SILC is just a $63 M market cap company playing on a niche and in the company's words, "exploding WAN optimization market". I also enjoy the fact that the company is based in Israel, I think it offers them a global vision and reach.
SILC can rise 10 fold even if there is a bear market. I want it back for good to the Main Portfolio (http://www.3stocksonfire.org/3stocksonfire.php).
eggman11 posted the following yesterday:
QuoteA little concern about SILC
SILC is also a foreign comapny that does not report a 10K on a quarterly basis.
SILC dilution is a lot better, but not great.
2001- 2005 the share count has been pretty stable, but
in 2006 (Basic not Diluted) it jumps almost 22% from 4,276 to 5,198 based on their 6K.
I know foreign companies will always look cheaper and a better value than their 10K filing peers, but they will always remain cheaper until or if they are fully reporting. Do you take that into count in your analysis.
Thanks
The explanation for the share count increase is the company's listing on the Tel-Aviv exchange:
«On December 20, 2005 we obtained the approval of the Tel Aviv Stock Exchange, or TASE, for the listing of our shares on TASE. Trading of our shares on TASE commenced on December 27, 2005. Our shares are included in the Tel-Tech index. Our shares continue to be listed on the NASDAQ Capital Market (previously known as the NASDAQ Small-Cap) under the ticker symbol "SILC" (previously "SILCF") See Item 9. "The Offer and Listing -Markets and Share Price History".
In January 2006, we completed an offering and sale of 10,000 units in Israel, composed of 800,000 of our ordinary shares and 400,000 warrants, pursuant to a prospectus filed with the Israeli Securities Authority and TASE. Each warrant sold in the offering is exercisable into one of our ordinary shares until January 31, 2008 at an exercise price in NIS equivalent to $8.64 calculated on the date of exercise of such warrant. The sale of units resulted in net proceeds of approximately $5.7 million. Any exercise of warrants in the future would contribute additional proceeds of up to approximately $3,500,000.»
So, the share count increase happened for quite legitimate reasons, we shouldn't expect further dilution going forward, also because the balance sheet (http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?Symbol=silc&lstStatement=Balance&stmtView=Qtr) is strong, with a current ratio of 3.72.
As for the company's products, I got this from their latest 20-F file:
«We have developed a line of products for the server networking industry which facilitates interaction between servers, allowing them to communicate with each other through a larger number of ports and with higher performance than their original capabilities. These are powerful products that allow server-based systems to fully exploit the high speed potential of Gigabit Ethernet. The products have either one, two, four or six ports, which plug into the servers between which interaction is facilitated. Our main competitor in this area, Intel, has developed cards which do not cover the full scope of features that our products do. For instance, Intel's products do not offer six ports, nor do they offer Multi Port Fiber LX interfaces. We believe that our expanded feature set coupled with the fact that our products are based on two different industry leader chip sets (Intel and Broadcom), which makes them more compatible with our potential customers' needs, gives us a competitive edge. To the best of our knowledge we are currently the only company offering such a comprehensive range of server networking products.»
These products are part of the WAN optimization trend going on in the World now. There are several studies about this relatively new, in researchers words, "exploding" market, but I still need to review and compare them to make a more definitive case.
The company made $0.20 EPS in Q4 2006, its best quarter ever. There's reason to believe there will be growth in 2007, because the overall WAN optimization market is on fire:
«A variety of respected market surveys and analyst reports are predicting a dramatic increase in revenues from the WAN Optimization appliance sales over the next few years, with one optimistic report even projecting a tenfold growth from 120,000 units in 2006 to 1,120,000 units in 2008. The sector has been characterized by a high level of M&A activity over the past year, and has produced two successful Nasdaq IPOs during the past four months -- Riverbed (Nasdaq:RVBD - News) and Allot (Nasdaq:ALLT - News).»
I'll have to compare RVBD, ALLT and SILC. I want to know if they're competitors and who's got the leading products.
For now we have enough material here to continue holding SILC with strong hands.
I've read the profiles and latest news from RVBD and ALLT and although they work in the same industry, they're different companies from SILC.
SILC makes products (http://www.silicom.co.il/pgx.php), the other two offer services.
SILC is a small $66 M market cap company working in one of the hottest sectors around now, the WAN optimization market. There are no analysts covering the stock and that may explain why SILC is trading at 12.6 times 2007 conservatively estimated EPS of $1?
I'll continue holding SILC.
David,
In a previous post from last week. You mentioned SILC as a potential 10-bagger and were planning to do some more research. Do you still feel this way? and if so, wouldn't be a prime addition to the 3 stocks on fire portfolio.
Maybe you can do a video analysis of SILC today.
Thanks
Quote from: eggman11 on March 12, 2007, 11:20:10 AM
David,
In a previous post from last week. You mentioned SILC as a potential 10-bagger and were planning to do some more research. Do you still feel this way? and if so, wouldn't be a prime addition to the 3 stocks on fire portfolio.
Maybe you can do a video analysis of SILC today.
Thanks
No, I don't think SILC can be a 10 bagger over the next couple of years, but I believe it can be a 2 to 3 bagger. Unfortunately I don't have time now to explain why (I forgot the time change in the US, sorry), but I'll make a more in depth analysis for SILC on tomorrow's update.
I'll continue holding SILC.
There are several studies about the WAN optimization market, most of them expecting about a double in revenues from now to 2008, to an overall size of about $600 M.
This is why I don't think SILC can be a 10 bagger, because it would have to have a big chunk of the market, and with competitors like Cisco, Riverbed and many others, I don't see that happening.
Actually SILC says its biggest competitor is Intel, but Intel doesn't have so specific products as SILC does (check SILC products (http://www.silicom.co.il/pgx.php))
SILC is just a $64 M market cap company, and I believe it can triple over the next couple of years, to a size of $192 M, as demand for its products is growing rapidly across the world and the company is already quite profitable, with EPS of $0.20 in Q4 2006.
This play is similar to what HAUP was, the only difference is HAUP's products are expected to become obsolete in the near future, while SILC's products are only starting to get traction now.
I'll continue holding SILC for the long term.
I was expecting some more questions on SILC :)
Today I don't have much time to go further on the fundamental study of SILC, the stock is touching the 50 days SMA support, I'll continue holding it for the long term.
Hi David
the stock closed below the 50 MA yesterday .. If it keeps touch this support for 2 Or 3 days without a good rebound with nice volume it's gonna be really bad and will most probably close that gup ::)
but as you said for long term it won't be a problem as long as the company's making good profits
It looks like SILC closed above the 50sma. The low volume tells me that the weak hands are out and if you want to buy the stock you have to pay up for it. ;D
Quote from: Garoh on March 15, 2007, 06:54:39 AM
Hi David
the stock closed below the 50 MA yesterday .. If it keeps touch this support for 2 Or 3 days without a good rebound with nice volume it's gonna be really bad and will most probably close that gup ::)
but as you said for long term it won't be a problem as long as the company's making good profits
I guess you're happier now Garoh, as the stock closed above the 50 days SMA. You need to relax and focus on fundamentals, even technicals can't be seen as an exact thing. Look what Livermore had to say about pure technicians:
«I should say that a chart helps those who can read it or rather who can assimilate what they read. The average chart reader, however, is apt to become obsessed with the notion that the dips and peaks and primary and secondary movements are all there is to stock speculation. If he pushes his confidence to its logical limit he is bound to go broke.»
SILC made $0.2 EPS in Q4 2006, and my take is we can realistically expect it to make $1.20 EPS in 2007 (that would be 30 cents a quarter, on average). This should be enough to take the stock towards $24 a share.
Now, what we need to focus on is the company's ability to meet these expectations.
I'll continue holding SILC.
Dave can you do a video on SILC when ever you get a chance? Take your time no rush I plan on holding SILC for a couple of years.
Quote from: prodigykid6 on March 16, 2007, 02:27:17 PM
Dave can you do a video on SILC when ever you get a chance? Take your time no rush I plan on holding SILC for a couple of years.
Sure, here it is:
I believe 2007 and 2008 will be spectacular years for SILC, but over the longer term it depends on the company's ability to keep developing new products.
I'll continue holding SILC.
News! Woot. ;D
Fortune-100 WAN Optimization Customer Orders - $1.2M of Silicom's Bypass Products
Monday March 19, 8:37 am ET
-- Explosive Growth of WAN Optimization Market Continues To Accelerate Silicom's Momentum --
KFAR SAVA, Israel--(BUSINESS WIRE)--Silicom Ltd. (NASDAQ & TASE: SILC) today announced that a Fortune 100 leader of the Internet Networking industry has ordered Silicom products valued at approximately $1.2 million. Silicom will deliver advanced BYPASS adapters to this recently-announced Design Win in three separate shipments over the next three months as required to meet the customer's WAN Optimization appliance manufacturing schedule.
ADVERTISEMENT
These sizeable shipments, the largest that Silicom has shipped to this prestigious customer since securing a Design Win with them in late 2006 (as reported in December 2006 - http://www.silicom.co.il/pgx.php?p2=396), confirms the importance of the WAN Optimization market as a growth driver for Silicom. The fact that Silicom has won three Design Wins from major WAN Optimization market players demonstrates that its BYPASS adapters are increasingly perceived as the WAN Optimization industry's continuity solution of choice. The BYPASS adapter's ability to automatically reroute traffic around non-functioning components enables WAN Optimization appliances to assure continuous traffic flow in all conditions, safeguarding against network disruption of any kind. As such, BYPASS functionality is necessary in practically all WAN Optimization and gateway appliances.
"The explosive WAN Optimization market started to be an important target market last year and has become an important incremental growth driver for Silicom," said Mr. Shaike Orbach, President and CEO of Silicom. "The Design Wins that we have secured with WAN Optimization players have significantly expanded our platform of potential repeat sales, and have also made it easier to penetrate new customers in this exciting market. As an industry just beginning its growth trajectory, we believe WAN Optimization is a huge opportunity with the potential to become one of our primary revenue drivers."
About Silicom
Silicom Ltd. is an industry-leading provider of high-performance server/appliances networking solutions. The Company's flagship products include a variety of multi-port Gigabit Ethernet, copper and fiber-optic, server adapters and innovative BYPASS adapters designed to increase throughput and availability of server-based systems, security appliances and other mission-critical gateway applications. Silicom also offers a broad range of its traditional PC cards, PCI cards and USB products. For more information, please visit: www.silicom.co.il.
Statements in this press release which are not historical data are forward-looking statements which involve known and unknown risks, uncertainties, or other factors not under the Company's control, which may cause actual results, performance, or achievements of the Company to be materially different from the results, performance, or other expectations implied by these forward-looking statements. These factors include, but are not limited to, those detailed in the Company's periodic filings with the Securities and Exchange Commission. The Company disclaims any duty to update such statements.
Contact:
Silicom Ltd.
Eran Gilad, CFO
+972-9-764-4555
[email protected]or
Investor Relations:
GK Investor Relations
Kenny Green / Ehud Helft
1 866 704 6710
[email protected] /
[email protected]Source: Silicom Ltd.
Thanks for posting the news danman3459 :)
«Silicom Ltd. today announced that a Fortune 100 leader of the Internet Networking industry has ordered Silicom products valued at approximately $1.2 million.»
SILC sold $5 M in Q4 2006, just this order is 24% of that. We hope there are more to come. The stock opened a gap at the open and maybe it will come back down to close. Or else it will rise and breakout above $16. I really don't have a clue about the short term developments.
But fundamentally, as you can see on the video analysis above, I see SILC as one of the most attractive picks I've ever found and I'll keep holding the stock.
SILC failed to close above the $16 short term resistance level, but that doesn't matter much for the long term outcome of this investment. I've watched my video above again, and I guess I'm pretty aggressive on my 2007 estimates, expecting 100% revenue growth from 2006, I hope it isn't too much. Over the longer term I expect "just" 30% average annual revenue growth.
I'll keep holding SILC.
Sold today nice gain
Thanks
David
Quote from: David Randolph on March 19, 2007, 07:32:39 PM
Thanks for posting the news danman3459 :)
«Silicom Ltd. today announced that a Fortune 100 leader of the Internet Networking industry has ordered Silicom products valued at approximately $1.2 million.»
SILC sold $5 M in Q4 2006, just this order is 24% of that. We hope there are more to come. The stock opened a gap at the open and maybe it will come back down to close. Or else it will rise and breakout above $16. I really don't have a clue about the short term developments.
But fundamentally, as you can see on the video analysis above, I see SILC as one of the most attractive picks I've ever found and I'll keep holding the stock.
You said SLIC was one of the most attractive picks you have ever found, yet you did not include it in the 3 stocks on fire portfolio. How Come? I can see a pullback to the 14 area near the 10 DMA to consolidate this recent run-up, before hitting new highs.
Quote from: eggman11 on March 21, 2007, 11:14:04 AM
Quote from: David Randolph on March 19, 2007, 07:32:39 PM
Thanks for posting the news danman3459 :)
«Silicom Ltd. today announced that a Fortune 100 leader of the Internet Networking industry has ordered Silicom products valued at approximately $1.2 million.»
SILC sold $5 M in Q4 2006, just this order is 24% of that. We hope there are more to come. The stock opened a gap at the open and maybe it will come back down to close. Or else it will rise and breakout above $16. I really don't have a clue about the short term developments.
But fundamentally, as you can see on the video analysis above, I see SILC as one of the most attractive picks I've ever found and I'll keep holding the stock.
You said SLIC was one of the most attractive picks you have ever found, yet you did not include it in the 3 stocks on fire portfolio. How Come? I can see a pullback to the 14 area near the 10 DMA to consolidate this recent run-up, before hitting new highs.
I'm still getting used to the new format of the 3 Stocks on Fire Portfolio (http://www.3stocksonfire.org/3stocksonfire_3sof.php) eggman11. SILC is amazing, but the two stocks which I believe have the most potential in the Main portfolio (http://www.3stocksonfire.org/3stocksonfire.php) are CIMT and GIGM. But it's always hard to know which are the best, that's why I look to own 15 different holdings, instead of 3.
Give me some time, this is a tough job, thank you :)
Quote from: David Randolph on March 21, 2007, 11:31:31 AM
Quote from: eggman11 on March 21, 2007, 11:14:04 AM
Quote from: David Randolph on March 19, 2007, 07:32:39 PM
Thanks for posting the news danman3459 :)
«Silicom Ltd. today announced that a Fortune 100 leader of the Internet Networking industry has ordered Silicom products valued at approximately $1.2 million.»
SILC sold $5 M in Q4 2006, just this order is 24% of that. We hope there are more to come. The stock opened a gap at the open and maybe it will come back down to close. Or else it will rise and breakout above $16. I really don't have a clue about the short term developments.
But fundamentally, as you can see on the video analysis above, I see SILC as one of the most attractive picks I've ever found and I'll keep holding the stock.
You said SLIC was one of the most attractive picks you have ever found, yet you did not include it in the 3 stocks on fire portfolio. How Come? I can see a pullback to the 14 area near the 10 DMA to consolidate this recent run-up, before hitting new highs.
I'm still getting used to the new format of the 3 Stocks on Fire Portfolio (http://www.3stocksonfire.org/3stocksonfire_3sof.php) eggman11. SILC is amazing, but the two stocks which I believe have the most potential in the Main portfolio (http://www.3stocksonfire.org/3stocksonfire.php) are CIMT and GIGM. But it's always hard to know which are the best, that's why I look to own 15 different holdings, instead of 3.
Give me some time, this is a tough job, thank you :)
I applaud this great pick. The market is a tough thing to understand at the moment with all the "junk" that's going on. SILC is up 30% so far and that's a great pick in my book. One cannot hit 30% picks all the time so awesome stuff.
8)
Quote from: David Randolph on March 21, 2007, 11:31:31 AM
Quote from: eggman11 on March 21, 2007, 11:14:04 AM
Quote from: David Randolph on March 19, 2007, 07:32:39 PM
Thanks for posting the news danman3459 :)
«Silicom Ltd. today announced that a Fortune 100 leader of the Internet Networking industry has ordered Silicom products valued at approximately $1.2 million.»
SILC sold $5 M in Q4 2006, just this order is 24% of that. We hope there are more to come. The stock opened a gap at the open and maybe it will come back down to close. Or else it will rise and breakout above $16. I really don't have a clue about the short term developments.
But fundamentally, as you can see on the video analysis above, I see SILC as one of the most attractive picks I've ever found and I'll keep holding the stock.
You said SLIC was one of the most attractive picks you have ever found, yet you did not include it in the 3 stocks on fire portfolio. How Come? I can see a pullback to the 14 area near the 10 DMA to consolidate this recent run-up, before hitting new highs.
I'm still getting used to the new format of the 3 Stocks on Fire Portfolio (http://www.3stocksonfire.org/3stocksonfire_3sof.php) eggman11. SILC is amazing, but the two stocks which I believe have the most potential in the Main portfolio (http://www.3stocksonfire.org/3stocksonfire.php) are CIMT and GIGM. But it's always hard to know which are the best, that's why I look to own 15 different holdings, instead of 3.
Give me some time, this is a tough job, thank you :)
Do you plan to add GIGM to the 3 stocks portfolio?
Quote from: yukiii on March 20, 2007, 06:28:55 PM
Sold today nice gain
Thanks
David
Hi yukiii, you sold this one, and it rose another 7% yesterday. You shouldn't trust your hot hand to trade, because hot hands suddenly become cold. But, good luck on your short term trades :)
QuoteI applaud this great pick. The market is a tough thing to understand at the moment with all the "junk" that's going on. SILC is up 30% so far and that's a great pick in my book. One cannot hit 30% picks all the time so awesome stuff.
8)
Thanks for the encouraging words lancefur :)
QuoteDo you plan to add GIGM to the 3 stocks portfolio?
Yes I do.
As for SILC, it closed at a new 7 year high yesterday, at $16.9. There wasn't any news out. I'm looking for $6-7 M in revenues in Q1 and about $0.25 EPS, that would be enough to confirm my full year 2007 estimate. Let's see what the company can do.
I'll keep holding SILC.
Quote from: David Randolph on March 22, 2007, 05:15:29 AM
Quote from: yukiii on March 20, 2007, 06:28:55 PM
Sold today nice gain
Thanks
David
Hi yukiii, you sold this one, and it rose another 7% yesterday. You shouldn't trust your hot hand to trade, because hot hands suddenly become cold. But, good luck on your short term trades :)
I have been in SILC on and off over a years, put it all into WPCS up 18% in a week good for another 50% from here.
QuoteI have been in SILC on and off over a years, put it all into WPCS up 18% in a week good for another 50% from here.
Wow, congratulations yukiii :)
SILC closed at a new 7 year high today, but volume declined a bit and the stock closed off its highs. So, should I sell it now and try to buy it back lower? Of course not, only yukiii can do that.
As a cold hand long term investor I need to trust long term fundamental analysis to invest in stocks. My analysis says SILC is experiencing strong revenue growth and it has a net profit margin of 21.25%. If revenues expand 100% in 2007, they will be $32 M and net income will be something like $6.8 M, or $1.33 per share.
The Networking & Communication Devices industry has an average earnings multiple of 35.51, so, if my estimates are met and SILC trades at an average valuation (it should trade at a higher valuation, because its growth rate is much stronger), SILC will end 2007 at about $47.18.
These are the calculus and thoughts I need to consider to keep holding SILC. Not the volume or the chart.
I'll keep holding SILC.
Dave, when I click on MSI on the mail portfolio, it always links to SILC, not sure what is wrong. Could you please look into it? Thanks!
Quote from: sfhappyfish88 on March 23, 2007, 01:12:08 PM
Dave, when I click on MSI on the mail portfolio, it always links to SILC, not sure what is wrong. Could you please look into it? Thanks!
Thanks for reporting the problem sfhappyfish88, it is fixed now.
On Friday SILC opened down 4% to retest the $16 support, prior resistance, and then claw back up all day to finish down 1.22%. I have a 35% profit in this trade, but I'm not selling, as I expect more gains in the future, as fundamentals keep improving.
There are rumors the Fortune 100 company that ordered $1.2 M in bypass adapters from SILC was Cisco (http://biz.yahoo.com/bw/070319/20070319005676.html?.v=1), and if that's the case, probably there will be more to come. $6 to $7 M in revenues for Q1 would be enough to push the stock to the mid $20's, as that would represent 20 - 40% sequential revenue growth from the $5.02 M reported in Q4 2006. I'm also interested in seeing if the company will be able to maintain a 20% plus net profit margin, that's very important.
I'll continue holding SILC.
I'm glad SILC spent $1.81 M in Research & Development in 2006, above the $1.56 M spent in 2005, because innovation is my biggest concern about SILC and its promise of being an outstanding long term investment.
Because, for example, let's take a look at HAUP, a somewhat similar play, since it makes peripheral components to computers (OK, with SILC we're talking about servers and SILC sells to businesses, whereas HAUP sells to consumers).
Anyway, I consider them similar businesses. The difference between them is the rate of growth given by innovation being superior in SILC.
But, for example, HAUP is a $70 M market cap with fiscal 2006 revenues of $97 M and SILC is a $87 M market cap with just $16 M in 2006 revenues.
For 07 I expect SILC to deliver $32 M in revenues and EPS of about $1.33 per share. This would be great and I believe in these estimates, because the next two years seem very promising for SILC.
But over the longer term, if the company doesn't keep innovating and bringing new products to the marketplace, its multiples will shrink like it happened with HAUP when the market started considering its products will become obsolete as time goes by.
For now everything is right and I'll keep holding SILC for the long term, writing new thoughts everyday about this investment.
It's a good thing that SILC stays asleep when the market goes down, not doing any damage whatsoever to the technical picture. I'm eager to see the first quarter results. My expectation is $6 - $7 M in revenues and EPS of $0.25 - $0.30.
I'll continue holding SILC.
Nothing new on SILC, it continues to consolidate recent gains, I'll continue holding the stock.
SILC continues to consolidate recent gains above $16. It is possible the stock goes down some more to touch the 50 days SMA again, I don't know about that. What I do know is that I see $32 M in revenues for 2007 and $6.8 M in net income. If these estimates are proven correct and SILC trades at an industry average earnings multiple of 34 (http://finance.yahoo.com/q/co?s=SILC) it will end the year at about $44 per share. These are my guidelines.
I'll continue holding SILC.
I think it is a good idea to read SILC's 4th quarter results again:
Silicom Posts Outstanding Quarter to Cap Record Year: Q4 Sales of $5.0M Yield $1.1M of Net Profit
Momentum Continues: 3 Straight Years of Quarterly Revenue Growth; New Quarterly and Annual Records Set for Sales, Operating Income & Net Income
Jan 29, 2007 8:28:00 AM
Copyright Business Wire 2007
Silicom Ltd. (NASDAQ and TASE: SILC) today reported record revenues, operating income and net income for the fourth quarter and full year ended December 31, 2006.
Revenues for the fourth quarter of 2006 were $5.0 million, an increase of 60% compared with $3.1 million in the fourth quarter of 2005 and 20% compared sequentially to the third quarter of 2006. This is the Company's twelfth consecutive quarter of increasing revenues and its highest quarterly revenues on record. Operating income for the quarter was $950,000, an increase of 100% compared to the parallel quarter of 2005 and 53% compared sequentially to the third quarter of 2006. Net income for the quarter increased by 125%, reaching $1.1 million, or $0.20 per diluted share ($0.21 per basic share), compared to $473,000, or $0.11 per share (basic and diluted) for the fourth quarter of 2005. This represents a 60% increase in net income compared sequentially with the third quarter of 2006.
Revenues for the full year of 2006 increased by 48% to a record $16.1 million compared with $10.9 million for 2005. Net income for the period increased by 97% to $2.6 million, or $0.49 per diluted share ($0.51 per basic share), compared with $1.3 million, or $0.30 per diluted share ($0.31 per basic share) for 2005.
Commenting on the results, Shaike Orbach, President and CEO, said, "We are proud to report an outstanding fourth quarter as the climax of the best year in our history. After crossing the $4 million revenue milestone in Q3, during the final three months of the year our sales grew by an additional 20%, giving us quarterly revenues above $5 million and a 100% year-over-year increase in operating income.
"This exceptional performance is attributable to two exceptionally strong growth engines. As we have indicated in the past, the platform of 40+ Design Wins that we have accumulated over the past several years represents a continuously expanding source of orders, and we have been adding new Design Wins to the base each quarter. In addition, during the fourth quarter we began to see an exponential ramp up in the order volumes of some of our customers - particularly those in the exploding WAN Optimization arena - in response to the incredible growth of their markets."
Mr. Orbach concluded, "Looking forward into 2007, we believe that the momentum of both these growth engines will continue to accelerate, driving continued strong growth for our company. With strong traction and a favorable environment, we are working to achieve our full potential and to create additional value for our shareholders."
They're not saying they will maintain the growth rate, they're saying the growth rate will continue to accelerate!
But OK, an acceleration in growth is needed to reach my $6.8 M net income and $32 M revenue estimates for 2007. $6.8 M net income times the average 33.6 earnings multiple gives me a $228.5 M market cap or $44.64 a share price.
I'll keep holding SILC.
I listened to the Q4 conference call. Highlights:
1) WAN optimization is "booming";
2) At least one analyst report predicts 10 fold increase in WAN optimization in the next two years;
3) "huge" growth opportunities;
4) executives meeting with potential institutional shareholders w/in next few months;
5) current WAN optimization customers are "market leaders";
6) will start to pay taxes, at "the very low effective tax rate," in '07 (i.e., 1Q'07);
7) has the capacity to handle growth;
8 ) growth plans in '07 are only organic (no need to raise capital);
9) quarterly to quarterly revenue could fluctuate (not necessarily sequential growth);
10) full fiscal year '07 will present "significant growth";
11) as revenue increases, margins will get better;
12) "definitely yes" expects more design wins in first half '07.
Quote from: buddjas1 on March 31, 2007, 06:10:29 PM
I listened to the Q4 conference call. Highlights:
1) WAN optimization is "booming";
2) At least one analyst report predicts 10 fold increase in WAN optimization in the next two years;
3) "huge" growth opportunities;
4) executives meeting with potential institutional shareholders w/in next few months;
5) current WAN optimization customers are "market leaders";
6) will start to pay taxes, at "the very low effective tax rate," in '07 (i.e., 1Q'07);
7) has the capacity to handle growth;
8 ) growth plans in '07 are only organic (no need to raise capital);
9) quarterly to quarterly revenue could fluctuate (not necessarily sequential growth);
10) full fiscal year '07 will present "significant growth";
11) as revenue increases, margins will get better;
12) "definitely yes" expects more design wins in first half '07.
Thanks a lot for these highlights from SILC's conferece call buddjas1, applaud :)
I especially enjoyed the part "as revenue increases, margins will get better". It means that, despite the already very fat net profit margin of 21.25%, there's still room for improvement. In fact they seem very skillful in controlling costs, as we can see on the next graph of the Selling, General & Administrative (SG&A) expenses as a percentage of sales:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=35078;image)
SG&A costs are going down as a % of sales, to just 11.7% in Q4 2006. But not just as a % of sales, also in absolute terms, as SG&A costs in Q4 2006 were just $585 K compared to $590 K in Q3 2006. I call this a very well managed company, working for the benefit of the common shareholder.
I'll keep holding SILC.
I didn't know where to post this, but since SILC is in the same industry...
David, could you please take a look at BBND? Although BigBand may compete for market with the likes of Cisco Systems (CSCO) and Juniper Networks (JNPR), they have a unique digital encryption and compression technology to simultaneously broadcast digital video in HDTV and HD with all other analog signals. I believe, they have a differentiator compared with Cisco and Juniper. I will look into this more. BBND just went IPO a week ago.
Thank you.
BigBand Networks, Inc., (NASDAQ: BBND - News), is a leading provider of broadband multimedia infrastructure for video, voice and data. The company's solutions are designed to process, optimize, and deliver services such as broadband Internet, VoIP, digital broadcast television, HDTV, transport of high quality video, local advertising, VOD, interactive TV and IPTV across coaxial cable, fiber or copper. Service providers use BigBand Networks' platforms to cost-effectively expand revenue-generating offerings of rich content and advanced interactive services. Customers include six of the ten largest service providers in the U.S., and leading service providers in North America, Asia, Europe and Latin America. Founded in 1998, BigBand Networks is based in Redwood City, Calif., with offices worldwide. For more information, please call +1.650.995.5000, email
[email protected] or visit www.bigbandnet.com.
BBND is a $1.1 B market cap company with negative book value (at least according to my fundamental data service). I also don't like recent IPO stocks, as they often dilute shareholder's value a lot right after the IPO.
But I would need a much deeper analysis to have a more conclusive opinion, if you still want me to review this company, please send me a private message with your bullish reasoning. Thank you :)
As for SILC, the stock went down a bit on profit taking after yesterday's 7% run up. Fundamentally nothing changed. I'll keep holding SILC for the long term.
Another design win for SILC:
SILICOM ACHIEVES DESIGN WIN WITH ANOTHER WORLD-LEADING WAN OPTIMIZATION PLAYER:
4TH DESIGN WIN IN EXPLODING MARKET (http://www.sec.gov/Archives/edgar/data/916793/000117891307000697/zk73609.htm)
"Another design win"
SILC is silky smooth! ;D Great call!
Unfortunately I didn't get in on SILC. Would you guys recommend buying at these current levels or should I wait (do you think) there will be a correction?
Quote from: dragonamg on April 04, 2007, 01:33:55 PM
Unfortunately I didn't get in on SILC. Would you guys recommend buying at these current levels or should I wait (do you think) there will be a correction?
That is always a tough question dragonamg. Certainly the potential isn't the same as it was when we bought it for the Main Portfolio (http://www.3stocksonfire.org/3stocksonfire.php) at $12.6. But, how much potential is left? Is it still worth a buy?
I'm trying to develop a fundamental metric to answer this question, as I build a "Long Term Estimation Model". This model will tell me how much "juice" is left in each holding as the price hopefully rises, until it says "there's no more juice".
Juice here can be defined as market inefficiency.
Well, as you can read on this thread, if my estimates are met, SILC will probably end 2007 between $40 and $50, but of course, that's a big if. I'm estimating revenues will double to $32 M and EPS will be $1.33 for the full year of 2007 (as the company maintains its net profit margin of 21.25% - but management said it will probably expand even more in the conference call) and SILC will be trading at the industry's average valuation of 36.2 times earnings.
Since I'm holding SILC I still consider it a buy. You be the judge. Good luck :)
Quote from: buddjas1 on April 04, 2007, 11:35:43 AM
"Another design win"
SILC is silky smooth! ;) Great call!
Thanks buddjas1 :)
Quote from: dragonamg on April 04, 2007, 01:33:55 PM
Unfortunately I didn't get in on SILC. Would you guys recommend buying at these current levels or should I wait (do you think) there will be a correction?
My take is short term movements in stocks are unpredictable, especially the "corrections" as you say. Nobody knows if the stock will pullback now or if the trend will just continue. There's no scientific way to know that, at least not one based in sound economic principles.
I've run my new valuation model for SILC, and I am quite surprised to see that SILC, considering just the next 3 years, is still extremely attractive, with an estimated compound annual growth rate (CAGR) of 96.6% :o
This gives me an optimal selling price of $95.5, given what we can extrapolate from current fundamental trends:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=35199;image)
Perhaps the assumption of a revenue CAGR of 2 (or 100%) is too optimistic, but it isn't me, the company is the one saying it has a study showing 10 fold growth in the WAN optimization market for the next couple of years. And revenue growth in 2006 was already 60%, with not much effect from this exploding market.
I also estimate net profit margin to grow from the 21.25% in Q4 2006, to 25%, since the company said, over the latest conference call, that net margin will expand even more as revenue grows.
I'll keep holding SILC.
Hi David,
Love your analysis. One quick question: could you explain the calculation in deriving the $95.50 optimal selling price? Thanks!
Dory99
Quote from: David Randolph on April 05, 2007, 04:48:42 AM
Quote from: buddjas1 on April 04, 2007, 11:35:43 AM
"Another design win"
SILC is silky smooth! ;) Great call!
Thanks buddjas1 :)
Quote from: dragonamg on April 04, 2007, 01:33:55 PM
Unfortunately I didn't get in on SILC. Would you guys recommend buying at these current levels or should I wait (do you think) there will be a correction?
My take is short term movements in stocks are unpredictable, especially the "corrections" as you say. Nobody knows if the stock will pullback now or if the trend will just continue. There's no scientific way to know that, at least not one based in sound economic principles.
I've run my new valuation model for SILC, and I am quite surprised to see that SILC, considering just the next 3 years, is still extremely attractive, with an estimated compound annual growth rate (CAGR) of 96.6% :o
This gives me an optimal selling price of $95.5, given what we can extrapolate from current fundamental trends:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=35199;image)
Perhaps the assumption of a revenue CAGR of 2 (or 100%) is too optimistic, but it isn't me, the company is the one saying it has a study showing 10 fold growth in the WAN optimization market for the next couple of years. And revenue growth in 2006 was already 60%, with not much effect from this exploding market.
I also estimate net profit margin to grow from the 21.25% in Q4 2006, to 25%, since the company said, over the latest conference call, that net margin will expand even more as revenue grows.
I'll keep holding SILC.
Thanks David. I am kicking myself for not buying in yesterday at $19 when I asked you that question. :( It is now $21. I may just buy a small position on Monday, hoping to add to it if it corrects... if it doesn't, at least I won't be totally out and enjoy the ride up with some position).
Keep up the good work!!! I looked at IPII today and that stock looks attractive. I can't wait to watch your analysis on that.
Quote from: Dory99 on April 05, 2007, 10:58:25 PM
Hi David,
Love your analysis. One quick question: could you explain the calculation in deriving the $95.50 optimal selling price? Thanks!
Dory99
Thanks Dory99, it's simple. As you know I'm looking for at least 16% share price CAGR to consider the stock attractive. As it is now, given my estimates, SILC has a 91.4% share price CAGR, because the estimates tell me SILC will be a $148.96 stock by the end of 2009.
To get the optimal selling price, I manipulate the initial share price up (I change the figure by hand), until the share price CAGR goes down to only 16%. For SILC that price is $95.5.
It means that if I were to buy/hold SILC at $95.5 or above, the return on investment I would get (or share price CAGR), would be 16% or less, so the investment would not be attractive anymore, and the stock should be replaced by another more promising investment. That's why $95.5, given my current long term estimates, is the optimal selling price.
But of course, estimates need to be adjusted as we get more information, and if actual results start coming in better than my estimates, that optimal selling price would rise.
I hope I was able to explain this well, anyway, hopefully you'll get a better explanation and the excel model on Monday or so when I deliver that 10 page document.
QuoteThanks David. I am kicking myself for not buying in yesterday at $19 when I asked you that question. Sad It is now $21. I may just buy a small position on Monday, hoping to add to it if it corrects... if it doesn't, at least I won't be totally out and enjoy the ride up with some position).
Keep up the good work!!! I looked at IPII today and that stock looks attractive. I can't wait to watch your analysis on that.
Hi dragonamg, according to my valuation model, SILC is still extremely attractive at current levels, with an expected share price compound annual growth rate of 91.4% as you can see below. Yes, I'll cover IPII on Monday, but I saw there's no growth, and I believe that will be a problem, because without growth, there's no fundamental reason for the stock price to go up, even if it is trading at a discount.
Again, let me put SILC's valuation model here:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=35244;image)
I'll keep holding SILC.
Thanks again, David.
After I posed the question last night, I attempted to replicate your logic ( and system ) with an Excel spreadsheet. For optimal selling price, I took final estimated share price and divided it by 1.16 over three years. So, for SILC, for example:
$148.96/1.16 = $128.41/1.16 = $110.70/1.16 = $95.43
.... pretty close...
Again, thanks for all your great work. It's really paying off!!!
Hi Dory99 -
You can use the formula:
(Final Price) / ((X+1)^n) = Optimal selling price
Final price = expected valuation at the end of our term.
X = share price CA(annual/yearly term)GR percentage that we will no longer be satisfied with...0.16 here.
n = term, in years (annual), that was used to determine the final price.
So,
$148.96 / ((0.16 +1)^3) = X
$148.96 / (1.16^3) = X
$148.96 / 1.56 = X
X = $95.43
This can be put into Excel in a way that makes all the variables easy to manipulate, and saves one from having to do this calculation by hand.
Looking forward to the document David! Keep up the great work . :)
.derek
SILC is almost there at the resistance ;)
Thanks for your comments and help Dory99, dnickers and Terliso :)
Thanks to dnickers formula I was able to automatize the "optimal selling price" and it gave me the same $95.43 value as it did to you. Given my current estimates, and despite the fact that I'm winning 76% on this investment, SILC is still the one of the most attractive stocks in the Main Portfolio (http://www.3stocksonfire.org/3stocksonfire.php), so I can't let go of it, can I?
The chart says probably a short term top was made today, but who cares about short term developments? I don't, because if I did, I had a 100% probability of missing the big ride. Money is made on the big swing, not by betting on short term fluctuations.
The model says SILC should only be sold at $95.43, given current estimates:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=35339;image)
Even though I feel a pullback coming, my trusting of the fundamentals and of long term trading as the best strategy makes me keep on holding SILC.
Quote from: David Randolph on April 09, 2007, 05:54:59 PM
Thanks for your comments and help Dory99, dnickers and Terliso :)
Thanks to dnickers formula I was able to automatize the "optimal selling price" and it gave me the same $95.43 value as it did to you. Given my current estimates, and despite the fact that I'm winning 76% on this investment, SILC is still the one of the most attractive stocks in the Main Portfolio (http://www.3stocksonfire.org/3stocksonfire.php), so I can't let go of it, can I?
David,
You mention that SILC is still one of the most attractive stocks in the portfolio. Would it be in the top 3 most attractive stocks? Is the 3 stocks on fire, still your top 3 currently. I think the stocks on fire would greatly benefit from a weekly update confirming your 3 favorite picks and any current stocks within the portfolio with potential for the 3 stocks portfolio.
Thanks
QuoteDavid,
You mention that SILC is still one of the most attractive stocks in the portfolio. Would it be in the top 3 most attractive stocks? Is the 3 stocks on fire, still your top 3 currently. I think the stocks on fire would greatly benefit from a weekly update confirming your 3 favorite picks and any current stocks within the portfolio with potential for the 3 stocks portfolio.
Thanks
I replied this issue on the "About the 3 Stocks on Fire Portfolio (http://www.3stocksonfire.org/trading/index.php?topic=9141.0)" thread.
As for SILC, fundamentally nothing changed. Technically it appears the stock came down to close a gap that was left open. The trend is still bullish.
I'll continue holding SILC.
We're getting closer to the first quarter earnings release, so I believe it is important to remind what would confirm my long term estimates on SILC.
1) The share count on a fully diluted basis in Q4 2006 was 5.38 million. It should increase by no more than 0.5%, to 5.41 million, to confirm the 1.02 dilution factor;
2) Revenues in Q1 2006 were $3.287 M. They should be $6.574 in Q1 2007 to confirm the estimated revenue CAGR of 2;
3) I estimate full year net profit margin, for 2007, of 25%. It is enough if it comes at about 22% in Q1 2007;
4) As for the EPS multiple I estimate 25, and SILC's industry average is 28. Currently, if we consider the 2006 EPS of $0.49, SILC is trading at 43 times its trailing earnings, so I don't think there will be a problem for it to achieve a long term EPS multiple of 25.
I'll keep on holding SILC.
With the growth in revenues and profitability SILC is experiencing I thought that I shouldn't keep considering 25 as the 4th working variable of the model, the EPS multiple estimate. As I've been doing with other holdings, I'm using the respective industry average for this estimate, and SILC's industry, which is the Networking & Communication Devices industry, trades at 28.79 times trailing earnings (http://finance.yahoo.com/q/co?s=silc).
Here are the current results of the valuation model for SILC:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=35549;image)
Today's optimal selling price is just $103.64 and the estimated share price CAGR is 92.4%, so, despite SILC currently being the biggest gainer of the Main Portfolio (http://www.3stocksonfire.org/images/2007_botao_main_portfolio_forum.gif), with an 80% profit, it is still the most attractive stock in the portfolio.
No doubts I'll keep holding SILC, and I should also buy it for the 3 Stocks on Fire Portfolio (http://www.3stocksonfire.org/3stocksonfire.php), I was just expecting more details about NVTL, which is also an awesome pick, but I still cannot determine by how much.
SILC was just 10 cents shy of touching its all time high set in February 3, 2000, at $23.69:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=35580;image)
Current and expected fundamental trends say SILC will surpass this level to a new all time high, even though it can have some sort of short term pullback:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=35581;image)
The expected share price CAGR is 91.8% and the optimal selling price today is $103.64.
This is based on the following 4 estimates:
1) Dilution factor is 1.02
I don't expect more than this, since the balance sheet is healthy and the company is quite profitable now.
2) Revenue CAGR of 2
This is where I'm just a bit afraid of being too optimistic, not for 2007 or 2008, but maybe for 2009 ... I don't know if the WAN optimization market will keep on growing for several years or will have a big boost now and then slowdown. Anyway, growth can be stronger in 07 and 08 and weaker in 2009, and yet revenues grow from the 2006 level of $16.1 M to $128.8 M in 2009 (this is what a revenue CAGR of 2 for the next 3 years means, that annual revenue will rise 8 fold).
3) Net Profit Margin of 25%
Net profit margin in Q4 2006 was already 21.25%, so I don't think there will be a problem in achieving 25%. I believe this is where we can have a positive surprise.
4) EPS multiple of 28.79
Well, now I see the Networking & Communication Devices industry average earnings multiple rose from 28.79 to 32.1 (http://finance.yahoo.com/q/co?s=silc). I'll adjust SILC's model for this multiple expansion, and the estimated share price CAGR and optimal selling price will rise because of this change.
SILC is very attractive by all means, I'll continue holding it.
SILC touched its all time high today, at $23.69, and closed just shy of it, at $23.49. Fundamentally nothing changed (except the industry average earnings multiple expansion (http://finance.yahoo.com/q/co?s=silc)):
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=35665;image)
SILC shows an extremely high expected share price CAGR of 98.1% and the optimal selling price is now $116.96, so no doubts I'll keep on holding the stock.
SILC is another one that put foot in new all time high territory, but closed just a touch below. Anyway, given my fundamental estimates, SILC will be a $186.1 stock in three years time, so the price at which I would start getting less than 16% annual return (the optimal selling price) is $119.23, so SILC remains an extremely attractive stock in my view:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=35730;image)
The optimal selling price rose a bit since yesterday because the Networking & Communication Devices industry average earnings multiple expanded from 32.49 to 33.12 (http://finance.yahoo.com/q/co?s=silc).
I'll keep holding SILC.
Silicom's First Quarter 2007 Results Release Scheduled for April 25
Wednesday April 18, 7:57 am ET
- Conference Call Scheduled for April 25th, 2007 at 9:00am EDT -
KFAR SAVA, Israel--(BUSINESS WIRE)--Silicom Ltd. (NASDAQ: SILC, TASE: SILC), an industry-leading provider of high-performance server/appliances networking solutions, announced today that it will be releasing its first quarter 2007 results on Wednesday, April 25th, 2007, before the US market opens.
The Company will also be hosting a conference call that same day, at 9:00am EDT. On the call, management will review and discuss the results, and will also be available to answer questions by investors.
To participate, please call one of the following teleconferencing numbers. Please begin placing your calls at least 10 minutes before the conference call commences. If you are unable to connect using the toll-free numbers, try the international dial-in number.
US: 1 888 281 1167
UK: 0 800 917 9141
ISRAEL: 03 918 0609
INTERNATIONAL: +972 3 918 0609
At: 9:00am Eastern Time, 6:00am Pacific Time, 4:00pm Israel Time
For those unable to listen to the live call, a replay of the call will be available for three months from the day after the call under the investor relations section of Silicom's website, at: www.silicom.co.il
http://biz.yahoo.com/bw/070418/20070418005593.html?.v=1 (http://biz.yahoo.com/bw/070418/20070418005593.html?.v=1)
I couldn't resist GUYS!
Just bought some more SILC on the 3% dip.
I finally have my 6.6% invested in SILC.
I am excited about the upcoming earnings date :)
Hopefully we will see upward earnings revisions as well.
Wxmang
SILC will release earnings on April 25, before the opening bell, that is, next Wednesday:
• Silicom's First Quarter 2007 Results Release Scheduled for April 25 (http://biz.yahoo.com/bw/070418/20070418005593.html?.v=1)
Business Wire (Wed 7:57am)
On a previous update I've written what I needed from this quarter to confirm my expectations:
Quote from: David Randolph on April 12, 2007, 04:22:30 AM
We're getting closer to the first quarter earnings release, so I believe it is important to remind what would confirm my long term estimates on SILC.
1) The share count on a fully diluted basis in Q4 2006 was 5.38 million. It should increase by no more than 0.5%, to 5.41 million, to confirm the 1.02 dilution factor;
2) Revenues in Q1 2006 were $3.287 M. They should be $6.574 in Q1 2007 to confirm the estimated revenue CAGR of 2;
3) I estimate full year net profit margin, for 2007, of 25%. It is enough if it comes at about 22% in Q1 2007;
4) As for the EPS multiple I estimate 25, and SILC's industry average is 28. Currently, if we consider the 2006 EPS of $0.49, SILC is trading at 43 times its trailing earnings, so I don't think there will be a problem for it to achieve a long term EPS multiple of 25.
I'll keep on holding SILC.
As for the valuation model, you know you now have it always updated on the Main Portfolio page (http://www.3stocksonfire.org/3stocksonfire.php):
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=35811;image)
The optimal selling price is rising because the Networking & Communication Devices industry average earnings multiple has been expanding (http://finance.yahoo.com/q/co?s=SILC).
SILC has the highest score in terms of "% to exit" in the Main Portfolio (http://www.3stocksonfire.org/3stocksonfire.php), so I'll buy it today for the 3 Stocks on Fire Portfolio (http://www.3stocksonfire.org/3stocksonfire_3sof.php). SILC will be replacing NVTL.
I'll keep holding SILC.
SILC was one of the few gainers in the Main Portfolio (http://www.3stocksonfire.org/3stocksonfire.php) today. 1st quarter results will be out next Wednesday. I expect revenues of about $6.5 M and EPS of $0.27.
This should be enough to take the stock towards $30 in Q2 2007.
I'll keep holding SILC.
We've already discussed most of SILC's fundamentals, what to expect for the next three years and how the next quarter can confirm my view of the future for this $119 M market cap company.
I searched for articles about the WAN optimization market and found the following one, for example:
WAN optimization market speeds up (http://searchnetworking.techtarget.com/originalContent/0,289142,sid7_gci1184305,00.html)
The article doesn't mention SILC. But it mentions the market leader, Packeteer (PKTR) and Riverbed (RVBD), for example.
Let's make a few quick comments on these two companies. PKTR seems to be rapidly losing market share, since its revenues in Q1 2007 declined 19% sequentially, even as the market is growing a lot:
«"After reviewing the most recent quarter, we believe that the revenue shortfall resulted mostly from longer product evaluations and proof of concept trials performed by various customers," said Dave Cote, president and CEO of Packeteer. We believe this resulted from an increasingly competitive marketplace, and our inability to deliver several product enhancements to our acceleration product lines by quarter end.»
As for RVBD, its valuation is nothing less from lunatic, since the company is worth $1.95 B and had revenues of just $90 M in 2006 (and lost $15 M, or ($0.59), in the year). As for comparison, SILC is a $119 M market cap company with $16.1 M in revenues in 2006 and positive EPS of $0.49.
If you want to be involved in the WAN optimization market in a company where growth matters (of course, this is an incipient market for Juniper or Cisco, they're too big), clearly SILC seems to be the best one.
Let's check SILC's products and website again: http://www.silicom.co.il/pgx.php
My valuation model says SILC (http://www.3stocksonfire.org/fundamental.model.php?ticker=SILC&portfolio=main) still has a long way to climb before it becomes correctly valued by the market, given its long term fundamental trends. I'll keep holding SILC through all the ups and downs, because fundamentals say the "ups" will be more and bigger than the "downs".
Tomorrow is the last day to sell SILC before Q1 2007 results are known, but of course I'm not going to sell, since SILC is, according to my estimates, the most attractive stock in the Main Portfolio (http://www.3stocksonfire.org/3stocksonfire.php). I expect the stock to return more than 100% a year going forward, as we can see on the valuation model:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=36011;image)
The more the Networking & Communication Devices industry group rises the more my optimal selling price for SILC rises, because my EPS multiple estimate is based on the industry average EPS multiple. As of today, the Networking & Communication Devices industry average earnings multiple is 36.58 (http://finance.yahoo.com/q/co?s=SILC).
Technically SILC closed at a new all time high today (even if it was for just 1 cent), I'll continue holding SILC.
SILC: Short Interest UP 49.8% to 250.2K in Apr 2007
Tuesday , April 24, 2007 16:21ET
According to new short interest data from NASDAQ, short interest for Silicom Ltd (NasdaqSC: SILC) INCREASED 49.8% to 250,161 shares for the month ended mid-April, 2007.
SYMBOL MARCH APRIL CHANGE %CHANGE DAYS/COVER
-------- ------------- ------------- ------------- ------------ ----------
SILC 167,029 250,161 +83,132 +49.77% 3
Based on SILC's 20-day average daily share volume of 95,923, it would require approximately 3 day(s) of buying to cover this short interest.
I'm still waiting for SILC's Q1 2007 results that should be out any minute to make its update. I expect revenue of about $6.5 M and EPS of $0.27.
Reported Rev of 6m & EPS of 0.22
Good numbers & growth, but below your expectations..were you're expectations too high? Or the co. is not doing as well as you thought?
Nick
Silicom's Momentum Continues: Q1 Sales up 84% to $6.0M with Net Income of $1.2M
Wednesday April 25, 8:13 am ET
- Compared to Q4 2006, Q1 Sales Up 21%, Operating Income Up 27% -
KFAR SAVA, Israel--(BUSINESS WIRE)--Silicom Ltd. (NASDAQ and TASE: SILC) today reported record revenues, operating income and net income for the first quarter ended March 31, 2007.
Revenues for the first quarter of 2006 were $6.0 million, an increase of 84% compared with $3.3 million in the first quarter of 2005 and 21% compared to the fourth quarter of 2006. These are the Company's highest revenues on record and its 13th consecutive quarter of rising sales.
Operating income for the quarter reached a record of $1.2 million. This represented an increase of 145% compared to the first quarter of 2006 and 27% compared to the fourth quarter of 2006. Net income for the first quarter was $1.2, or $0.22 per diluted share ($0.23 per basic share), an increase of 127% compared to $548,000, or $0.11 per share (basic and diluted) for the first quarter of 2006.
Commenting on the results, Shaike Orbach, President and CEO, said, "The momentum of our business accelerated again during the first quarter, enabling us to achieve another record quarter in terms of revenues, operating profit, net profit and cash. This strong performance demonstrates the cumulative benefit of our growing Design Win platform, together with the ramp-up of demand for our BYPASS adapters. Our business is being driven by the exciting growth of several target markets, especially the WAN Optimization market, which is still in the early growth phase. We are working to take advantage of our favorable positioning to address this and other high-potential markets, and are optimistic regarding our ability to deliver strong growth over the long term."
http://biz.yahoo.com/bw/070425/20070425005539.html?.v=1 (http://biz.yahoo.com/bw/070425/20070425005539.html?.v=1)
It's only 2 cents better than Q4.
http://biz.yahoo.com/ap/070129/earns_silicom.html?.v=1
I'm not sure that the earnings can support the current price. It'll be interesting to see what happens.
Thanks for posting the results Se7en.
Analyzing the results in light of the 4 working variables of the model I get the following:
1) The share count on a fully diluted basis in Q4 2006 was 5,404,000. It is 5,653,000 now, so, it increased 4.61%, which is a lot. This will make me raise my dilution factor from 1.02 to 1.10 >:(
2) Revenue growth was 84% from the year ago levels. I was expecting 100%. This will make me lower my revenue CAGR estimate from 2 to 1.84
3) Net profit margin was 20.58% already with taxes in play. My long term estimate was calling for 25% net profit margin. I'll lower my long term estimate to 20%
4) I'll leave the EPS multiple estimate at the same level which equals the industry average of 36.54
The valuation model now looks like this:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=36138;image)
Jesus, there was a huge hair cut on my long term expectations for this stock. With current estimates the expected share price CAGR is 60.88% and the optimal selling price declined from $131 to $65.78.
SILC still is one of the top 3 holdings of the Main Portfolio (http://www.3stocksonfire.org/3stocksonfire.php), so I'll keep holding it on the 3 Stocks on Fire Portfolio (http://www.3stocksonfire.org/3stocksonfire_3sof.php) too, but it went down from the 1st to the 3rd place, with a % to exit estimate of 167%.
I see the stock opening higher and if I were a short term trader I would certainly take profits. This is one of those cases where there's about 90% probability of the stock going down after today's gap up.
I feel the pressure to take profits, but since probably I would be recommending buying the stock again $2 or $3 below current levels, I'll keep on holding SILC.
Thanks for the pick David. I sold at 25.25, in order to protect the profit.
Quote from: buddjas1 on April 25, 2007, 09:45:08 AM
Thanks for the pick David. I sold at 25.25, in order to protect the profit.
You're welcome buddjas1 :)
Don't forget to buy it back lower sometime before Q2.
Absolutely. From the Yahoo board, the dilution was due to the exercise of 200k warrants and 200k such warrants remain outstanding. So, your dilution factor may be a little high now.
And, remember all the recent design wins that were not reflected in Q1.
Quote from: buddjas1 on April 25, 2007, 09:56:31 AM
Absolutely. From the Yahoo board, the dilution was due to the exercise of 200k warrants and 200k such warrants remain outstanding. So, your dilution factor may be a little high now.
And, remember all the recent design wins that were not reflected in Q1.
Good points buddjas1, no doubt SILC remains a great long term pick, but it surely needed some profit taking after the huge run it had, on "not so spectacular" numbers.
I could have taken a 100% plus profit here too, to buy a good $3 - $5 lower maybe, but I believe that would reduce the quality of this service and probably the long term returns of the Main Portfolio, because if today I was right in saying the stock would go down after the open, tomorrow I can be wrong on my short term outlook.
Good luck buddjas1 :)
If you sell now, knowing you'll buy back later at a lower price, you'd still have to follow the money manegement rule. The profit on SILC would be divided by 15 and added to the original investment on SILC. Therefore, by the time SILC reaches the price you've sold at, your capital value in SILC will be lower than it is now. This means that if SILC is to grow to $65, your end profit will be smaller. Add a prospect of you manipulating SILC a couple more times before it gets to the target and you'll end up having a lot less profit than you potentially could.
Quote from: berloga on April 25, 2007, 10:54:12 AM
If you sell now, knowing you'll buy back later at a lower price, you'd still have to follow the money manegement rule. The profit on SILC would be divided by 15 and added to the original investment on SILC. Therefore, by the time SILC reaches the price you've sold at, your capital value in SILC will be lower than it is now. This means that if SILC is to grow to $65, your end profit will be smaller. Add a prospect of you manipulating SILC a couple more times before it gets to the target and you'll end up having a lot less profit than you potentially could.
If everyone knew that SILC would reach 65, nobody would sell. There are no guarantees in the market and we all have to take the data we have and make a decision. I saw a good but not great quarter and felt that the results could not support the current valuation.
Quote from: buddjas1 on April 25, 2007, 11:46:17 AM
Quote from: berloga on April 25, 2007, 10:54:12 AM
If you sell now, knowing you'll buy back later at a lower price, you'd still have to follow the money manegement rule. The profit on SILC would be divided by 15 and added to the original investment on SILC. Therefore, by the time SILC reaches the price you've sold at, your capital value in SILC will be lower than it is now. This means that if SILC is to grow to $65, your end profit will be smaller. Add a prospect of you manipulating SILC a couple more times before it gets to the target and you'll end up having a lot less profit than you potentially could.
If everyone knew that SILC would reach 65, nobody would sell. There are no guarantees in the market and we all have to take the data we have and make a decision. I saw a good but not great quarter and felt that the results could not support the current valuation.
Always take your profit and buy back at a lower price, that is the norm, never hold small caps long term.
i don't understand these stocks. still a good quarter with 85% revenue increase and the stock plummets...just doesn't make sense to me
>If everyone knew that SILC would reach 65, nobody would sell. There are no guarantees in >the market and we all have to take the data we have and make a decision. I saw a good but >not great quarter and felt that the results could not support the current valuation.
Nobody knows where SILC will be in 6 months. The problem is if you sell, how would you gauge the situation for the next entry point? Based on technical analysis? But then, you can decide to finally get back in and the stock can go down more before it takes off again. This will make you nervous. Also, like I said, you will never make more money on swing trading than a good long term investment. There have been many examples to that.
Lastly, buddjas1, please share your evaluation model. Since you belive SILC is overvalued or does not hold up to its current valuation, then what is it worth for and how low should it go before you'll consider it attractive again (meaning dropping how many %)?
Must find a support at $22.
Quote
>Lastly, buddjas1, please share your evaluation model. Since you belive SILC is overvalued or does not hold up to its current valuation, then what is it worth for and how low should it go before you'll consider it attractive again (meaning dropping how many %)?
$.22*4*25=$22
I'm not sure SILC deserves a higher PE multiplier than 25, at least not based on Q1 results. I would think about buying again perhaps under $20.
I think SILC is just an example of a stock that got a little to ahead of itself. I'm sure there will be a nice run up before Q2 release, but I don't have the patience to wait until then.
Quote from: kpunarc on April 25, 2007, 03:14:51 PM
i don't understand these stocks. still a good quarter with 85% revenue increase and the stock plummets...just doesn't make sense to me
SILC was overvalued and earnings were great, but not good enough to support the price.
QuoteAlways take your profit and buy back at a lower price, that is the norm, never hold small caps long term.
Sure yukiii, do you think you'll be able to buy back SILC below your selling price around $15?
Quote from: yukiii on March 20, 2007, 06:28:55 PM
Sold today nice gain
Thanks
David
Thanks ;)
DAVID
I was in SILC back when it was $4 sold at 9 went back in at 7 then $15. But that how I trade.
I learned along time ago to book your profits in small caps as they always correct when they get ahead of there value.
I think you are fooling yourself if you think that you can keep a portfolio of 10 small caps and keep them over time.
I would set reasonable values then sell and buy other stock ready to rise, and keep the cycle going.
Sure you can keep some of your over valued stock if you want, but you just can't sit on these profits or they will go down.
Why not compound your profits? Just some advise, I've been doing this for 40 years. I am not knocking you or your research, I just think ther is room for improvement.
Quote from: yukiii on April 25, 2007, 05:01:44 PM
DAVID
I was in SILC back when it was $4 sold at 9 went back in at 7 then $15. But that how I trade.
I learned along time ago to book your profits in small caps as they always correct when they get ahead of there value.
I think you are fooling yourself if you think that you can keep a portfolio of 10 small caps and keep them over time.
I would set reasonable values then sell and buy other stock ready to rise, and keep the cycle going.
Sure you can keep some of your over valued stock if you want, but you just can't sit on these profits or they will go down.
Why not compound your profits? Just some advise, I've been doing this for 40 years. I am not knocking you or your research, I just think ther is room for improvement.
If you didn't sell at 9$ but now, your profit(s) would have been a lot more ... ::)
Quote from: yukiii on April 25, 2007, 05:01:44 PM
DAVID
I was in SILC back when it was $4 sold at 9 went back in at 7 then $15. But that how I trade.
I learned along time ago to book your profits in small caps as they always correct when they get ahead of there value.
I think you are fooling yourself if you think that you can keep a portfolio of 10 small caps and keep them over time.
I would set reasonable values then sell and buy other stock ready to rise, and keep the cycle going.
Sure you can keep some of your over valued stock if you want, but you just can't sit on these profits or they will go down.
Why not compound your profits? Just some advise, I've been doing this for 40 years. I am not knocking you or your research, I just think ther is room for improvement.
yukiii, I'm compounding my profits, are you?
40 years is a very long time. If you had started with the paltry sum of $1,000 and had an average annual return of 30% with your swing trading, you would now have $36,118,864 in your trading account. That would make swing trading now nearly impossible or not worth the effort.
Most big caps started by being small caps.
I have 40 years of investment ahead of me (barring health problems) and I want to achieve a 30 - 40% average annual return on my investment, and the only way to do that in a consistent manner is by applying and respecting a long term investment strategy.
Honestly, I bet you wish you had my strategy 30 or 40 years ago. I'm sure you would be so rich now you wouldn't care about short term movements in stocks, you would be too big to take advantage of them.
Thanks for the nice talk and advice yukiii, I want to know and learn from your experience.
There is a difference between "long term holding" and holding a stock for a long time while ignoring a change in the fundamentals. I would have held SILC through today if I had thought that the fundamentals demanded that. However, the fundamentals changed and it no longer made sense to hold the stock "long term."
I think David is correct that long term holding is the best strategy; but that strategy should not be followed blindly. The investor must account for a change in the data.
I knew a sell off would happen today:
QuoteI see the stock opening higher and if I were a short term trader I would certainly take profits.This is one of those cases where there's about 90% probability of the stock going down after today's gap up.
I feel the pressure to take profits, but since probably I would be recommending buying the stock again $2 or $3 below current levels, I'll keep on holding SILC.
And yet, I've opted to keep the stock anyway. I know that being in and out of stocks won't take me anywhere over the long term. Short term satisfaction of "cash in the pocket" goes against being the long term successful investor that I want to be. Why?
There are many reasons, which aren't easy to explain. One is "start acting like you were what you want to be". Big sharks don't do swing trading simply because they're big. They know what they buy and why they do it, and don't sell to buy 10 or 20% lower, if they think the stock still has a lot of bags in the tank like I do.
Quote from: berloga on April 25, 2007, 10:54:12 AM
If you sell now, knowing you'll buy back later at a lower price, you'd still have to follow the money manegement rule. The profit on SILC would be divided by 15 and added to the original investment on SILC. Therefore, by the time SILC reaches the price you've sold at, your capital value in SILC will be lower than it is now. This means that if SILC is to grow to $65, your end profit will be smaller. Add a prospect of you manipulating SILC a couple more times before it gets to the target and you'll end up having a lot less profit than you potentially could.
Excellent point on money management rules berloga, applaud.
Quote from: buddjas1 on April 25, 2007, 05:56:20 PM
There is a difference between "long term holding" and holding a stock for a long time while ignoring a change in the fundamentals. I would have held SILC through today if I had thought that the fundamentals demanded that. However, the fundamentals changed and it no longer made sense to hold the stock "long term."
I think David is correct that long term holding is the best strategy; but that strategy should not be followed blindly. The investor must account for a change in the data.
Sure buddjas1, but there wasn't any major change in fundamentals in my view. The quarter wasn't as strong as we hopped for, but it wasn't weak either:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=36160;image)
Twelve quarters in a row of strong revenue growth. Are you going to fight this trend? Revenue grew 20.57% sequentially, from $5,017,000 in Q4 2006 to $6,049,000 this quarter. If this growth pace continues throughout 2007, the company will end the year with revenue of $32,738,145, that's more than 100% growth from the 2006 revenue number of $16.1 M. Maybe I was too fast in adjusting my revenue CAGR estimate from 2 to 1.84, the company seems on track to achieve 100% revenue growth in 2007.
I know, I know, "but diluted EPS grew just 2 cents, from 20 cents in Q4 2006 to 22 cents now". And what if I tell you that EPS declined from 11 cents in Q1 2006 to just 6 cents in Q2 2006? Given your current mindset, you would immediately say "sell". Back then the stock was trading at $5.
I'll keep holding SILC all the way through the ups and downs until I'm convinced the company reached its full long term potential. Just a $118 M market cap now, still a long way from that point in my view.
Quote from: David Randolph on April 25, 2007, 05:38:58 PM
Quote from: yukiii on April 25, 2007, 05:01:44 PM
DAVID
I was in SILC back when it was $4 sold at 9 went back in at 7 then $15. But that how I trade.
I learned along time ago to book your profits in small caps as they always correct when they get ahead of there value.
I think you are fooling yourself if you think that you can keep a portfolio of 10 small caps and keep them over time.
I would set reasonable values then sell and buy other stock ready to rise, and keep the cycle going.
Sure you can keep some of your over valued stock if you want, but you just can't sit on these profits or they will go down.
Why not compound your profits? Just some advise, I've been doing this for 40 years. I am not knocking you or your research, I just think ther is room for improvement.
yukiii, I'm compounding my profits, are you?
40 years is a very long time. If you had started with the paltry sum of $1,000 and had an average annual return of 30% with your swing trading, you would now have $36,118,864 in your trading account. That would make swing trading now nearly impossible or not worth the effort.
Most big caps started by being small caps.
I have 40 years of investment ahead of me (barring health problems) and I want to achieve a 30 - 40% average annual return on my investment, and the only way to do that in a consistent manner is by applying and respecting a long term investment strategy.
Honestly, I bet you wish you had my strategy 30 or 40 years ago. I'm sure you would be so rich now you wouldn't care about short term movements in stocks, you would be too big to take advantage of them.
Thanks for the nice talk and advice yukiii, I want to know and learn from your experience.
Just to put a perspective here, SILC is just about where it was three days ago. The data does not seem fundamentally changed at this point. One quarter doesn't make a trend, unless there is a substantial change in the Company. SILC is still growing into new markets and has invested in the personnel and marketing to continue growth.
yukiii - what do you see as fundamentally different?
Quote from: ravenquork on April 25, 2007, 06:51:05 PM
Quote from: David Randolph on April 25, 2007, 05:38:58 PM
Quote from: yukiii on April 25, 2007, 05:01:44 PM
DAVID
I was in SILC back when it was $4 sold at 9 went back in at 7 then $15. But that how I trade.
I learned along time ago to book your profits in small caps as they always correct when they get ahead of there value.
I think you are fooling yourself if you think that you can keep a portfolio of 10 small caps and keep them over time.
I would set reasonable values then sell and buy other stock ready to rise, and keep the cycle going.
Sure you can keep some of your over valued stock if you want, but you just can't sit on these profits or they will go down.
Why not compound your profits? Just some advise, I've been doing this for 40 years. I am not knocking you or your research, I just think ther is room for improvement.
yukiii, I'm compounding my profits, are you?
40 years is a very long time. If you had started with the paltry sum of $1,000 and had an average annual return of 30% with your swing trading, you would now have $36,118,864 in your trading account. That would make swing trading now nearly impossible or not worth the effort.
Most big caps started by being small caps.
I have 40 years of investment ahead of me (barring health problems) and I want to achieve a 30 - 40% average annual return on my investment, and the only way to do that in a consistent manner is by applying and respecting a long term investment strategy.
Honestly, I bet you wish you had my strategy 30 or 40 years ago. I'm sure you would be so rich now you wouldn't care about short term movements in stocks, you would be too big to take advantage of them.
Thanks for the nice talk and advice yukiii, I want to know and learn from your experience.
Just to put a perspective here, SILC is just about where it was three days ago. The data does not seem fundamentally changed at this point. One quarter doesn't make a trend, unless there is a substantial change in the Company. SILC is still growing into new markets and has invested in the personnel and marketing to continue growth.
yukiii - what do you see as fundamentally different?
Many of these stock get way ahead of there value, in my opinion SILC growth will slow down and PE will go lower, so get out on the big run up or before.
SILC .49 2006 2007 .88 est don't think 2008 will be more then 1.00 so as you see growth will slow.
But what do i know? the story is already out...........
"Twelve quarters in a row of strong revenue growth. Are you going to fight this trend?"
Maybe I was a little pessimistic. I'll listen to the cc over the weekend and decide whether to re-buy then.
Quote from: yukiii on April 25, 2007, 07:33:23 PM
Quote from: ravenquork on April 25, 2007, 06:51:05 PM
Quote from: David Randolph on April 25, 2007, 05:38:58 PM
Quote from: yukiii on April 25, 2007, 05:01:44 PM
DAVID
I was in SILC back when it was $4 sold at 9 went back in at 7 then $15. But that how I trade.
I learned along time ago to book your profits in small caps as they always correct when they get ahead of there value.
I think you are fooling yourself if you think that you can keep a portfolio of 10 small caps and keep them over time.
I would set reasonable values then sell and buy other stock ready to rise, and keep the cycle going.
Sure you can keep some of your over valued stock if you want, but you just can't sit on these profits or they will go down.
Why not compound your profits? Just some advise, I've been doing this for 40 years. I am not knocking you or your research, I just think ther is room for improvement.
yukiii, I'm compounding my profits, are you?
40 years is a very long time. If you had started with the paltry sum of $1,000 and had an average annual return of 30% with your swing trading, you would now have $36,118,864 in your trading account. That would make swing trading now nearly impossible or not worth the effort.
Most big caps started by being small caps.
I have 40 years of investment ahead of me (barring health problems) and I want to achieve a 30 - 40% average annual return on my investment, and the only way to do that in a consistent manner is by applying and respecting a long term investment strategy.
Honestly, I bet you wish you had my strategy 30 or 40 years ago. I'm sure you would be so rich now you wouldn't care about short term movements in stocks, you would be too big to take advantage of them.
Thanks for the nice talk and advice yukiii, I want to know and learn from your experience.
Just to put a perspective here, SILC is just about where it was three days ago. The data does not seem fundamentally changed at this point. One quarter doesn't make a trend, unless there is a substantial change in the Company. SILC is still growing into new markets and has invested in the personnel and marketing to continue growth.
yukiii - what do you see as fundamentally different?
Many of these stock get way ahead of there value, in my opinion SILC growth will slow down and PE will go lower, so get out on the big run up or before.
SILC .49 2006 2007 .88 est don't think 2008 will be more then 1.00 so as you see growth will slow.
But what do i know? the story is already out...........
Can you also say
why do you think 2008 won't be more than 1.00? Like David said, SILC is still growing into new markets, so please enlighten us why your view is so pessimistic??
This isn't a yahoo board so please explain your theory/reasoning, you almost never do this! ::)
I agree with Se7: we all share knowledge and learn from each other here. We should accept blatant facts, but provide arguments to speculations.
It is very interesting to hear the position of Yukiii and buddjas1, but since we are not mind readers it would be very helpful to see the reasoning behind their decisions and claims.
Thank you folks.
Quote from: berloga on April 26, 2007, 09:30:40 AM
I agree with Se7: we all share knowledge and learn from each other here. We should accept blatant facts, but provide arguments to speculations.
It is very interesting to hear the position of Yukiii and buddjas1, but since we are not mind readers it would be very helpful to see the reasoning behind their decisions and claims.
Thank you folks.
I already gave my reasons. But, here it is again:
"$.22*4*25=$22
I'm not sure SILC deserves a higher PE multiplier than 25, at least not based on Q1 results. I would think about buying again perhaps under $20.
I think SILC is just an example of a stock that got a little to ahead of itself. I'm sure there will be a nice run up before Q2 release, but I don't have the patience to wait until then."
Note that the stock is now trading just under 22, exactly where i think it should be.
Quote from: buddjas1 on April 26, 2007, 09:47:15 AM
Quote from: berloga on April 26, 2007, 09:30:40 AM
I agree with Se7: we all share knowledge and learn from each other here. We should accept blatant facts, but provide arguments to speculations.
It is very interesting to hear the position of Yukiii and buddjas1, but since we are not mind readers it would be very helpful to see the reasoning behind their decisions and claims.
Thank you folks.
I already gave my reasons. But, here it is again:
"$.22*4*25=$22
I'm not sure SILC deserves a higher PE multiplier than 25, at least not based on Q1 results. I would think about buying again perhaps under $20.
I think SILC is just an example of a stock that got a little to ahead of itself. I'm sure there will be a nice run up before Q2 release, but I don't have the patience to wait until then."
Note that the stock is now trading just under 22, exactly where i think it should be.
The problem with that reasoning buddjas1 is you're not considering growth. You're considering SILC EPS will be flat throughout the year, and that has not been the trend. From what I heard on the conference call I expect strong revenue and EPS growth going forward.
Anyway, with the stock down 8% today I feel the pain of not taking profits yesterday, even though I knew the stock would go down. It's so hard to be a long term investor, it has to be right :)
If you, buddjas1, will buy SILC at or slightly below $20, say even $19, your expectation for its growth this quarter will be to reach $22 and you collect ~15% profit on the trade. Well, too cheap.
Secondly, you assign a PE ratio of 25 to SILC saying it does not deserve to match its peers' 36. Why? Well, based on the earnings. Sorry, they only expect 80% growth, not 100% as expected. Please compare SILC to its competitors and put the numbers down for their respective growth scenarios and then see which one is a more promising stock:
SILC company A company B
1) revenue and profit growth x% y% z%
2) PE ratio a b c
3) dilution factor 1.1 n m
You can add more rows here. But once you compare you should see a reason to sell or buy and hold. I still do not understand your logic,
1*2*3=6 is not a good proof to me! Sorry, I am an engineer.
Quote from: David Randolph on April 26, 2007, 10:37:10 AM
The problem with that reasoning buddjas1 is you're not considering growth. You're considering SILC EPS will be flat throughout the year, and that has not been the trend. From what I heard on the conference call I expect strong revenue and EPS growth going forward.
Anyway, with the stock down 8% today I feel the pain of not taking profits yesterday, even though I knew the stock would go down. It's so hard to be a long term investor, it has to be right :)
No, I am considering growth. Thus, the PE of 25. That PE is much higher than the S&P average. If I thought no growth, I would assign a PE of 10-15, maybe less.
Quote from: berloga on April 26, 2007, 10:46:51 AM
1*2*3=6 is not a good proof to me! Sorry, I am an engineer.
You forget that the market is not made up of millions of engineers. I prefer to think like the market, think simple.
I used to be an engineer, by the way, so I appreciate your statement. However, the ends justify the means and, today, the market agrees with my "not a good proof."
Thanks David for commenting on the situation of SILC today. I am holding SILC. And I will continue to hold SILC. I just can not look at my streamer anymore. :-\
By the way, I think dnickers and I are related. ;)
Have a great day David and may the Force be with you!
Quote from: berloga on April 26, 2007, 09:30:40 AM
I agree with Se7: we all share knowledge and learn from each other here. We should accept blatant facts, but provide arguments to speculations.
It is very interesting to hear the position of Yukiii and buddjas1, but since we are not mind readers it would be very helpful to see the reasoning behind their decisions and claims.
Thank you folks.
I don't provide detailed explanations because it very obvious what the value is. Just read the 10K or press release. I know you don't like the truth but SILC will have to do alot better , and I don't think they will from my experience. The money was made when they hit $4 and made there run to $25.
There is a flaw in the way you put values on stocks, you assume there growth will keep increasings
and that is not true for most of them they will slow. Its nice to be positive but we need some real world figures. I can't prove that SILC won't grow 40% a year but the hints are there that they will not.
QuoteI don't provide detailed explanations because it very obvious what the value is. Just read the 10K or press release. I know you don't like the truth but SILC will have to do alot better , and I don't think they will from my experience. The money was made when they hit $4 and made there run to $25.
There is a flaw in the way you put values on stocks, you assume there growth will keep increasings
and that is not true for most of them they will slow. Its nice to be positive but we need some real world figures. I can't prove that SILC won't grow 40% a year but the hints are there that they will not.
You think growth will slow because you're bearish on the general market and the world economy for that matter. But the market has been showing bulls are right. Of course, there will be setbacks and corrections, but no doubt we're in a bull market.
Quote from: Houlahan on April 26, 2007, 10:54:05 AM
Thanks David for commenting on the situation of SILC today. I am holding SILC. And I will continue to hold SILC. I just can not look at my streamer anymore. :-\
By the way, I think dnickers and I are related. ;)
Have a great day David and may the Force be with you!
Hi Houlahan, it's funny that you and dnickers are related. Do as Warren Buffet does, he doesn't have a quotation system in his office and never looks at intraday quotes (not even daily quotes). And he's the most successful investor ever, isn't that strange?
QuoteNo, I am considering growth. Thus, the PE of 25. That PE is much higher than the S&P average. If I thought no growth, I would assign a PE of 10-15, maybe less.
SILC's growth is also much higher than the S&P 500 average. In fact, it is about 10 times higher.
It seems Broadcom, a $16.5 B company, is one of SILC's clients: http://www.silicom.co.il/pgx.php?p2=410
Technically SILC can dance all it wants, as people take profits/losses, but over time, fundamental trends will probably persist and the stock represents great value in my view.
After listening to the Q1 2007 conference call, specifically the comments on operating margin going forward, I made some revisions to my valuation model:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=36212;image)
1) I inserted a dilution factor of 1.0834, which was the share count growth over the last 12 months on a fully diluted basis, from 5,218,000 to 5,653,000 (8.34% increase).
2) My revenue growth estimate is 84% going forward. Revenue grew 84% in Q1 2007 when compared to Q1 2006. I don't see any reason for growth to slow, quarterly revenue is still relatively small at $6.049 M in Q1 2007.
3) I increased my net profit margin estimate back to 25%. This is because the CEO specifically said there's a lot of leverage in SILC's business model, and as revenue grows, costs will never grow at the same pace, hence operating margin (and net profit margin) will continue to expand.
4) The earnings multiple I have for SILC is 36.95, which is the current Networking & Communication Devices industry average (http://finance.yahoo.com/q/co?s=silc). SILC is growing a lot more than its industry peers, since the industry's revenue grew 14.9% from the year ago levels and SILC's revenue grew 84%.
Given all this, SILC will be a $128.88 stock by the end of 2009. And this means the optimal selling price today is $82.57 (that would be the price where the return would start being less than 16% a year for the next 3 years).
So, as I said previously, the stock may dance, try to scare or bore me, that I'm not even here. I'll keep holding SILC with strong hands.
Do as Warren Buffet does, he doesn't have a quotation system in his office and never looks at intraday quotes (not even daily quotes). And he's the most successful investor ever, isn't that strange? (The color pink did not show very well-so I changed it)
Ok David. Not sure how Mr. Buffet can do that. I guess his picks are slow and conservative.
I feel the need to check my stocks. Maybe I need to keep the Newbie title. lol
Well, with SILC, just call me Ms. Warren.
Support $17
QuoteOk David. Not sure how Mr. Buffet can do that. I guess his picks are slow and conservative.
I feel the need to check my stocks. Maybe I need to keep the Newbie title. lol
Well, with SILC, just call me Ms. Warren.
Ok Ms. Warren, he does that because he only cares about fundamental information. He doesn't change his opinion about a business or the attractiveness of a stock by looking at its chart. When he buys a stock he's concerned about it years from now, not the next few days, weeks or months. So he's interested only in information that may affect or confirm his long term outlook, not daily fluctuations in share prices.
Quote from: yukiii on April 27, 2007, 02:05:33 PM
Support $17
Why not $15, so you can buy back the stock just a bit lower than your selling price?
I don't see $17 as a possibility, and will use a PEG Ratio analysis to demonstrate it:
PEG = (Price/Earnings Ratio)/Annual EPS growth
Let's consider the following EPS growth rates for SILC going forward, which I believe are quite reasonable:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=36314;image)
These estimates give me a 2011 EPS of $4.74 and an Annual EPS growth rate of 57.44%. This means the PEG (5 yrs expected) is:
21.89/57.44 = 0.38
The Networking & Communication Devices industry average PEG Ratio is 1.52 (http://finance.yahoo.com/q/co?s=SILC). If SILC trades at an average valuation in terms of PEG Ratio, it would then be a (1.52/0.38)*$21.45 = $85.8 stock.
My take is SILC, because of its growth rate (for example, in Q1 EPS grew 100% from 2006 levels), should be warranted a much higher than the industry average earnings multiple. And from what I've listened at the company's conference call, its revenues are recurring, since a design win gives revenues for about 3-5 years, and the possibility of the company winning the next design win with its existing clients is very high, because it would cost a lot (to the clients) to change their supplier.
The company currently has 45 design wins, but it is talking with 100 more companies. In terms of the WAN optimization market, the CEO said there are 12 - 15 players in that sector now, and 6 of them are SILC's clients already. So SILC is very well positioned to take advantage of this sector's growth.
A company's director knows this quite well, since he has been buying shares in the open market all the way up, and only took profits in 10,000 of his 255,000 shares when results came out (http://www.sec.gov/Archives/edgar/data/916793/000091957407002180/xslF345X02/p767296a_ex.xml). At current prices he'll probably restart buying again.
I'll keep holding SILC.
I was reassured over the latest conference call, when SILC's CEO explained the recurrence of the company's revenues. Every design win means recurring revenues going forward, and this makes me a believer in the long term future of this small Israeli company, with 78% of its sales in the USA.
I expect SILC to easily earn $1 per share in 2007. Given this estimate, if SILC trades at the Networking & Communication Devices (http://finance.yahoo.com/q/co?s=SILC) industry average earnings multiple of 33.39, it will close 2007 around $33.39. But just compare SILC's growth rate with its industry peers, and its profitability in terms of operating margins. SILC should clearly trade at an above average multiple.
My opinion is a multiple expansion will take SILC beyond $30 over the next 6 months or so.
Considering the valuation model applied to SILC (http://www.3stocksonfire.org/fundamental.model.php?ticker=SILC&portfolio=main), which I believe is estimated conservatively at this point, tells me the optimal selling price given by an extrapolation of current fundamental trends is $74.61. I'll continue holding SILC.
It seems Robert Sussman, a SILC director, is making short term trades on SILC shares, but increasing his position on balance, since he bought 2,000 shares on Friday and sold 600 yesterday:
SEC form 4 filed today (http://www.sec.gov/Archives/edgar/data/916793/000091957407002214/xslF345X02/p770079_ex.xml)
By his actions this director is showing SILC's future in financial terms will probably be better than the recent past.
I have nothing to change to my long term valuation model (http://www.3stocksonfire.org/fundamental.model.php?ticker=SILC&portfolio=main). I'll keep holding SILC.
SILC is trading above its uptrend support.
Riverbed (RVBD) is a company operating in the same area of SILC, the WAN optimization market, but I guess it isn't a competitor, it is more of a client or potential client for SILC (Silicom does not disclose its clients, so we don't know).
Check Riverbed's website (http://www.riverbed.com/) to better understand its business, clearly something with very fast growth at this point in time.
Riverbed is already a $2.23 B market cap company, with 2006 revenue of $90 M. The company just became profitable, with operating income of $1.643 M in Q1 2007. For comparison, SILC had operating income of $1.206 M in Q1 2007. If SILC were to trade at the same operating income multiple as RVBD, it would then be a ($2,230,000,000/$1,643,000)*$1,206,000 = $1.64 B market cap company, or a $305 stock :o
You can see the market is prepared to pay a much higher multiple to participate in this "change the workplace, not the people" global trend.
No news or technical developments for SILC today, my valuation model (http://www.3stocksonfire.org/fundamental.model.php?ticker=SILC&portfolio=main) tells me to keep on holding the stock through all ups and downs.
SILC will probably continue to consolidate the huge gains it had over the last 6 weeks or so. Perhaps it will wait for the 50 days moving average before making another bull run, nobody knows for sure.
It terms on a long term fundamental analysis, like the one that is described in this thread and my valuation model (http://www.3stocksonfire.org/fundamental.model.php?ticker=SILC&portfolio=main), SILC remains a very attractive stock that should only be sold at $74.97. I'll continue holding SILC.
8:59AM Silicom Limited announces $17.9 mln private placement of ordinary shares (SILC) 23.12 :
it's down premarket
are they starting to dilute shares ?? >:(
David,
How does the new offering effect the potential. The dilution will probably be kept at a miniunm going forward. I can't find any comments to why the need this offering.
PS Please don't forget to update the 3 stocks on fire portfolio today.
• Silicom Ltd. Announces $17.9 Million Private Placement of Ordinary Shares (http://biz.yahoo.com/bw/070504/20070504005358.html?.v=1)
Business Wire (Fri 8:59am)
Unless they need capital for a big surge in production this private placement is hard to understand, there weren't any liquidity problems in the balance sheet, quite the opposite.
Oh my, I'm in a bad luck streak. Anyway, not a reason to sell in my view.
Quote from: David Randolph on May 04, 2007, 09:31:13 AM
• Silicom Ltd. Announces $17.9 Million Private Placement of Ordinary Shares (http://biz.yahoo.com/bw/070504/20070504005358.html?.v=1)
Business Wire (Fri 8:59am)
Unless they need capital for a big surge in production this private placement is hard to understand, there weren't any liquidity problems in the balance sheet, quite the opposite.
Oh my, I'm in a bad luck streak. Anyway, not a reason to sell in my view.
Would SILC still qualify to be included in the 3 Stocks on fire portfolio.?
Quote from: David Randolph on May 04, 2007, 09:31:13 AM
• Silicom Ltd. Announces $17.9 Million Private Placement of Ordinary Shares (http://biz.yahoo.com/bw/070504/20070504005358.html?.v=1)
Business Wire (Fri 8:59am)
Unless they need capital for a big surge in production this private placement is hard to understand, there weren't any liquidity problems in the balance sheet, quite the opposite.
Oh my, I'm in a bad luck streak. Anyway, not a reason to sell in my view.
You are brave, David. I do not understand why SILC did not disclose the reason for the private placement. There is a big difference between using the money for current operations (i.e., cash flow problems) or using the money to expand or acquire another company (a good thing). I was looking to get back in, but now I am not so sure.
By the way, you may want to take a look at ELP. I'll post my own analysis today or tomorrow.
Quote from: buddjas1 on May 04, 2007, 10:13:23 AMI was looking to get back in, but now I am not so sure.
By the way, you may want to take a look at ELP. I'll post my own analysis today or tomorrow.
I'm with you on this but unfortunately I had a GTC order to buy at $21.29. Luckily it's up to $22 but I'm not sure I should stay in it? Thoughts?
This news was just out, let me think about this issue for a while. Let's see, we're talking about 875,000 new shares and 218,750 more if the share price surpasses $28.25. Since I believe the latter will happen, let's get on with this and consider 1,093,750 new shares.
Prior to this, the share count on a fully diluted basis was 5,653,000 shares. In my valuation model I considered a dilution factor of 1.0834. This means I was counting on the # of shares outstanding rising 1,535,619 over the next 3 years to 7.19 million.
This looks to me like the company is getting the money all at once to expand capacity right away. After this private placement probably there won't be much dilution going forward, so I should increase the initial share count accordingly and at the same time lower my dilution factor.
The way I see it this doesn't change anything to SILC's long term potential, I'll make the necessary changes to my estimates when I update the analysis after the close, but the end result will be similar. Let's see how the market interprets the news (what would be super is if the insider that has been buying shares picks up some more today).
I don't think the news is all that negative: some one with big money is willing to buy at $20.50, that's likely putting a floor on the stock.
Now the key question is, why does the company need cash at this point?
Quote from: DragonAMG on May 04, 2007, 10:32:16 AM
I'm with you on this but unfortunately I had a GTC order to buy at $21.29. Luckily it's up to $22 but I'm not sure I should stay in it? Thoughts?
Well, net income = $1,245,548
New number of shares, fully diluted = 5,653,000 + 875,000 = 6,528,000 (I'm not including the warrants here)
EPS = $0.19; so, the dilution takes 3 cents off of the bottom line.
0.19*4*25 = $19.00.
I would consider buying now only in the 18-19 range.
Still waiting for $17 LoL
QuoteWould SILC still qualify to be included in the 3 Stocks on fire portfolio?
Yes eggman11, SILC still is one of the top 3 holdings of the Main Portfolio, therefore it belongs to the 3 Stocks on Fire Portfolio.
Quote from: realcoolhead on May 04, 2007, 11:38:09 AM
I don't think the news is all that negative: some one with big money is willing to buy at $20.50, that's likely putting a floor on the stock.
Now the key question is, why does the company need cash at this point?
I agree realcoolhead, I don't think the idea of someone investing $17.9 M in SILC should be viewed as negative, even though there's going to be dilution from this.
It's hard to know why SILC needs cash at this point, but my best guess is they're ramping up production to meet demand, and that costs money. As I was on the search to know if SILC is the manufacturer of its products, I found another interesting thing:
http://www.silicom.co.il/pgx.php?p2=36
QuoteSilicom Connectivity Solutions, a part of Israel's RAD group (http://www.rad.com/Home/0,6583,547,00.html) ...
RAD Group? This is news to me :-[
So SILC belongs to the same guys that own RDCM, a stock that is being clobbered by the market? But they also own RVSN, a $460 M market cap very lucrative business. And other companies. Gee, there's a lot of information to extract from this, I'll have to check it out over the upcoming updates.
QuoteWell, net income = $1,245,548
New number of shares, fully diluted = 5,653,000 + 875,000 = 6,528,000 (I'm not including the warrants here)
EPS = $0.19; so, the dilution takes 3 cents off of the bottom line.
0.19*4*25 = $19.00.
I would consider buying now only in the 18-19 range.
I wouldn't mind much if the stock were to go down to that point, if one year from now it is at $40. Again, you're not considering growth potential, I don't think it is realistic to expect just $0.19 a quarter for the remainder of the year. And yes, after that there would be more growth, so you need to attach the 25 EPS multiple (why not more? The industry average is 33.5 and SILC is growing a lot more than the industry (http://finance.yahoo.com/q/co?s=SILC)) to a reasonably expected 2007 EPS number, not to $0.19 multiplied by 4. Just my opinion.
Quote from: yukiii on May 04, 2007, 02:55:16 PM
Still waiting for $17 LoL
I don't see you laughing at the TCHC thread in the Member's Corner. I'm not laughing either. Be careful with what you wish for others, it may happen to you. I was going to pass this one, but your wishing for my stocks to go down isn't right. Your results won't be better if my results are worse, this isn't a competitive game, it's not you against other traders, not even you against the market, it is just you against you.
You take care.
I'll keep holding SILC.
Quote from: David Randolph on May 04, 2007, 04:16:23 PM
Quote
I don't see you laughing at the TCHC thread in the Member's Corner. I'm not laughing either. Be careful with what you wish for others, it may happen to you. I was going to pass this one, but your wishing for my stocks to go down isn't right. Your results won't be better if my results are worse, this isn't a competitive game, it's not you against other traders, not even you against the market, it is just you against you.
You take care.
I'll keep holding SILC.
here, here,
well said . i don't understand the yahoo board mentallity. it is very schoolyardish. as if in the end someone will end up with something more than someone else. ( of course we all end up the same)
to yukki,
you make some good points . don't spoil your expertise with smugness. you only look foolish rather than informed
in the end we all end up the same so let's enjoy and help eachother.
maxi
Yeah, I agree. Let's keep 3SoF above the crap that goes on at Yahoo and other boards.
I don't wish for your stocks to go down, I just don't agreed with your exit plans and buying at highs.
I rather pick my own time to buy and sell. David you have had a habit of loosing profits because of this.
I don't like to loose anything if i can't help it.
1. Why buy Jakk at its high bad timing, TZOO overvalued when you picked it.
2. Why not lock in your profits on SILC.
3. You say you will hold stocks long term and when i say time to sell you say you are holding for your targets. Them you sell wcg, jaso, tsl.
4. why buy NGA after it up 50% its a momo stock it will go down when everyone leaves.
What will happen when the market goes down, your portfolio will go back down again.
the market keeps going up but your portfolio isn't moving because of your principals.
When I say stock will go down, I don't say i don't like your picks. They are usually good, just don't
agreed on the timing. We need to better job on this. I am here because of the potential of this site.
But it keeps changing strategy, and we need to work on a better one. There is a flaw in your valuations also in giving to much growth forward that won't materialize. (Overly optimistic)
You guys make fun I bought SILC at $4 and sold it at $15 and put my money in WPCS $10 to $14.
SILC goes from $15 to $26 and now back to $21. I will buy back SILC one day and continue on. Why hold on when it overvalued? Just find another undervalued play or sell half. There where many good picks here last year, which I sold within weeks some 2x or 3x but most when back down it you hold them to long. David you do not account for a bad quarter to lock in gains, which is a big thing
with small caps. They don't keep going up.............
Quote from: yukiii on May 04, 2007, 05:20:10 PMJust find another undervalued play or sell half. They don't keep going up.............
I do that exact same thing after a huge run up and when I still really believe in the company... satisifying both sides... the side of me that says "lock in the profits" and the other side that says "this thing can still go up but I'm not sure". Do I always make as much as I potentially could? No. But, I sleep much better and I'm limiting my potential loss in the event it retraces (and they always do).
hi,
i agree with yukii on this . locking in profits is the most important. zurich axiom 2
Major Axiom 2: On Greed
Always take your profit too soon.
this works for me . i sleep better . knowing i took profits too soon even if it can go higher without me .
Wow, some interesting points. I've been here for about 2 years and things have changed a lot around here as far as strategy. However, I have always felt as though David has his and our best interests in mind. He follows his gut and experience as the market and its multiple personalities present themselves. He has character, which is why I have remained a member.
When I first got here it was about day trading, swing trading and market timing. I still see glimmers of it. Like the other day with SILC earnings call. David correctly called that it would drop after earnings but using his new long term strategy he held anyway to not lose his position. 2 years ago he would have sold in the morning and watched it drop with satisfaction and then watched it to reenter. Even today, a week later, he could have gotten back in for less money but there is no way of knowing that. With NVTL, David also held through earnings even though it seemed it might be overextended. But NVTL kept going up and so in this case David was a genius. It's all 20/20 hindsight but I appreciate the concept of a consistent stategy.
Here's where I have a problem and can kind of see what Buddjas1 and Yukiii are talking about.
Beginning of March David passionately went short the market and gave a huge defense for it. He sold me and I went short along with him with IBN and FMCN. Then 2 weeks later in one day slammed on the brakes and said he was a long again. Thank God I was watching day to day to catch this or I would have been caught. I actually covered my shorts with a very small profit.
I place a lot of trust in your initial analysis so often times I am caught off-guard by your quick 180's. The biggest problem I think you have David is that sometimes you leap too fast and before you have all the information you need to really make a truly confident decision. These erratic 180's also occur with many of your long purchases as well. Let me give examples.
CPNE, according to your initial analysis is a 15-30 bagger with great long term potential. Within a week we all find out it's a sucker stock with too high a churn rate and the stock tanks. In fact, it really sells just a bunch of crap. I'm sure a little more digging could have revealed this. If I had been on vacation after I bought into your initial analysis that I trusted I would be down 50%. Actually I was up and then ended up losing all profits and taking a 15% loss.
SYX was given all the glory to be at least over 60 bucks but you had a short term target of 30 you passed on. I sold at 27.17 and made 60% so I'm not complaining too badly but when you posted your iniital analysis it was a long term hold because sales were going crazy. It now sits at 16.68, 27 cents below where I bought it. We later found out they were selling a lot but marking down even more, killing margins. Your analysis didn't consider this possibility and ignored the tremendously high complaint rate the company enjoys.
GOAM is another you jumped into before you knew the whole picture. We made money on it but those of us that jumped in know it was really lucky we got out when we did because after digging deeper you saw it had very limited potential and subsequently dropped below our purchase price.
On April 15th, JASO was a great long term hold that with an "optimal selling price" of 73.12 and 3 year price projection of 114. This made me and I'm sure many others very excited. Cool, I buy in at 25 and change. On April 16th you called it a sure thing. One week later you do "some more digging" and find a document that was available before your initial analysis that has the correct amount of outstanding shares. Uh oh I'm getting nervous.... but at least your new optimal selling price is still pretty good a 42 bucks. A week later you realize your 120% rev growth projection is way too high since it was linked (maybe) to the incorrect # of outstanding shares and POOF! the optimal selling price is now 14 bucks!!!! Two weeks ago I was going to buy this company at 25 bucks and sell it in 3 years for 114. Now it's gone in 2 weeks and I made a hundred bucks. Talk about a whirlwind of emotions.
BLFY is another that you gave up on that you planned on holding for the long term but sold after a small loss and a couple of months of single penny moves. I have to admit it was like watching grass grow.
Now I am sounding negative but everything I wrote is factual and only meant to point out my opinion of how things can be improved. Like Yukiii wrote, I think you are often too optimistic, not digging deep enough in your initial analysis to find some of the things that later show your initial analysis or maybe more importantly, your initial enthusiasm to be misplaced. There must be a better litmus test to back up your picks so that there is a chance of adhering to your long term philosophy. The philosophy is sound, it's your picks that have not always been. It seems that there must be a longer watch period so the stocks can prove themselves. If they are truly long term winners they can be watched a little longer without missing out on much. Maybe create a watch list. Just looking, no touching!! Some of these startup companies with weak or okay balance sheets and seemingly great potential have been killing us with dilution. Weed these out or watch them. Just don't buy them yet. Meanwhile, concentrate on some proven winners like GIGM and NVTL (my only holdings right now) until you can add more solid picks to them.
Then on the ON FIRE portfolio you can satisfy your swing trading crowd with more of a technical analysis of companies with good fundamentals. You are talented in capturing short term moves within the chart of a long term hold..... and let's face it......it's fun. Maybe allocate a smaller portion of you total assets to this portfolio. You can lock in profits after a healthy gain and accept small short term losses because you know you aren't banking on this portfolio for your long term appreciation (this is what you more rock solid main portfolio would be doing long term). Swing trading does seem to be in high demand here and I think it can keep you sharp.
I didn't realize how much I was going to type until I got started but the bottom line is that David is good but he could be even better and this site could be better. I think he would be the first to say this himself and that is why I feel comfortable writing this. It is David's honest effort and character that will keep me a member for the long term. Ray
You all post some interesting points; so "applaud" to rickjust, yukii, etc.
Let me start by saying that I do not know everything. The stock market is an infinite learning curve.
My experience tells me that David's new "long term" holding theory is the best theory for wealth accumulation. That said, David's recent picks are not the best stock for that model. SILC, NVTL, etc., have been stock that have already seen a 100%+ run in the past six months or so. They all require what David would call "future catalysts," i.e., twelve straight quarters of good EPS. That's not sustainable. They are bound for a "correction" and even stellar earnings cannot support the trend. That's why SILC retreated and NVTL will accumulate (even the analysts "upgrades" are minimal).
David's "long term" holding theory will best support stocks that are already undervalued based on current earnings. That way, the stock must catch-up to its value, especially over the long term. That is exactly what Buffett does. My examples here are:
PTNR ($9.50 to $16.73) (http://www.3stocksonfire.org/trading/index.php?topic=6918.msg96771#new);
ACH ($25.00 to $29.36)(http://www.3stocksonfire.org/trading/index.php?topic=9132.0)
AZZ ($40.00 to $58.25) (http://www.3stocksonfire.org/trading/index.php?topic=7597.msg78332#msg78332)
CPA ($34.26 to $63.27) (http://www.3stocksonfire.org/trading/index.php?topic=6919.msg72555#msg72555)
VPHM ($6.60 to $24) (I bought soon after earnings posted of $0.36 for the quarter, knowing that growth would continue).
They have all posted significant gains because the stock's price had to "catch-up" to its value, thus making the stock a great long-term pick.
There are other stocks that currently fit that model. We just need to find them. IEAM is one. I believe ELP is another. Price will eventually, i.e., long term, catch-up with value.
Those are my thoughts. David has the correct idea, but the stocks have not fit the model well. That is why I seem to sell when David continues to hold. However, we can find stocks that will.
Though David strategy need not be defended but it would be good idea to explain something: Its not a day trading, momo or swing trading. If you are looking for this stuff then you may be disappointed.
About IN and OUT take the case of GIGM or VPHM, where you will put the exit, after 1 bag, 2 bags or even more. On the other hand ppl were bragging when they made either a bag or couple on ACOR [sadly this one was not picked by 3SoF, I think David was not around that time], well the long term holders does have something to smile.
Theoretically short term beats head above all kind of trading provided you are a visitor from future with list of all IN and OUTs. Otherwise you will for sure miss the bus.
The timing can be made better but whenever David is going to recommend the 3SoF has now quite a big following so dont think that a less liquid stock will not move.
On the other hand it would be good idea to present some stock ideas. I think David should look at APPL and MIVS. The first one has proven record and second one is speculative. Just my two cents, I dont have any position in these stocks.
David,
What is the new target price for SILC after the new shares are factored in?
Thanks
Quote from: eggman11 on May 07, 2007, 10:45:11 AM
David,
What is the new target price for SILC after the new shares are factored in?
Thanks
Good point eggman11, before I start digging into the RAD Group (which controls SILC), I need to compute my valuation model taking into consideration the new shares and the $17.9 M the company received from the recent private placement. I'll do that over today's update, I need to run to pick up my kid for karate now.
See ya :)
This Fool.com article was just released and I am pleased to see that "SILC" was at the Top of the Fool.com Networking & Communication Devices CAPS rating list.
Check it out:
http://www.fool.com/investing/general/2007/05/07/before-the-call-cisco-sings.aspx
One more thing....
I tried to purchase some more SILC shares when it was down almost 5% this morning and man I was not happy about this...
My Broker: TradeKing, is saying this when I tried to place the order:
"This is a Foreign security that will incur an additional processing fee of $75."
What kind of BS is this?
This is new by the way..
It used to be just $4.95.
I am kind of bummed, because I have only a 5.7% portfolio position in SILC :(
Wxmang
Quote from: eggman11 on May 07, 2007, 10:45:11 AM
David,
What is the new target price for SILC after the new shares are factored in?
Thanks
Ok, what we have from the recently announced private placement are 875,000 new shares issued and outstanding and the possibility of having another 218,750 new shares coming from warrants converted if the share price exceeds $28.25. I'm going to use the fully diluted share count as my initial share count number, which is:
5,653,000 + 875,000 + 218,750 = 6,746,750
Since the company just received $17.9 M, it will have working capital of $31.44 M and a current ratio of 6.9, which represents a very strong balance sheet. Therefore I'll lower my dilution factor going forward, from 1.0834 to 1.02.
Oops, I also noticed that the Networking & Communication Devices industry average earnings multiple declined from 33.55 to 26.94 (http://finance.yahoo.com/q/co?s=SILC) now (this will surely have a big impact, I need to find out Yahoo's calculation method, not sure I can trust it as being accurate).
After these changes, the results of the valuation model look like this:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=36578;image)
SILC is still one of the three most attractive stocks of the Main Portfolio, with an expected share price CAGR of 64.96% and an optimal selling price of $60.44.
QuoteThis Fool.com article was just released and I am pleased to see that "SILC" was at the Top of the Fool.com Networking & Communication Devices CAPS rating list.
Check it out:
http://www.fool.com/investing/general/2007/05/07/before-the-call-cisco-sings.aspx
Hehe, it's nice to see SILC mixed with those mammoths, even more so since it has more stars than all of them and then they say "does not meet the $100M market cap minimum.". Well, they're wrong about this, because SILC currently has a $128 M market cap.
QuoteOne more thing....
I tried to purchase some more SILC shares when it was down almost 5% this morning and man I was not happy about this...
My Broker: TradeKing, is saying this when I tried to place the order:
"This is a Foreign security that will incur an additional processing fee of $75."
What kind of BS is this?
This is new by the way..
It used to be just $4.95.
I am kind of bummed, because I have only a 5.7% portfolio position in SILC :(
If your broker charges an extra commission for trading shares of foreign companies (when they're traded on US exchanges) I have to say you should change your broker, maybe to interactivebrokers.com.
Technically I would say SILC will probably meet the 50 days SMA at the 50% fibonacci retracement level and that will probably be near the low point of the current correction phase. But I wouldn't dare, as I haven't done it in the past, to take profits now to buy just a bit lower. I want to hold SILC for all that it has to give me, which seems like a lot.
I'll continue holding SILC.
As one can read over this form 6-K filed with SEC yesterday (http://www.sec.gov/Archives/edgar/data/916793/000117891307000908/zk73702.htm) after the close, many institutions were involved in the recent private placement:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=36619;image)
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=36618;image)
These people bought 840,000 shares at $20.5, and since the deal was closed, SILC traded just 596,400 shares, so I guess most of them are still holding. They're winning just 0.58% on their investment. The questions now are:
1) Are these institutional investors going to sell or hedge their position now for a slim profit?
2) Or they know fundamentals are attractive and they'll be able to sell/hedge their position at much higher prices in the not so distant future?
I don't know, but my guess is they're not going to sell here and yes, they know the company's fundamentals are very attractive at this point.
My valuation model says SILC (http://www.3stocksonfire.org/fundamental.model.php?ticker=SILC&portfolio=main) will be worth $94.35 three years from now, and that means an average annual return on your investment of 66%. Very attractive by all means.
I'll continue holding SILC.
Technically SILC seems to be waiting for the 50 days SMA support to start a new bull run. Perhaps it will meet the 50 days SMA (currently at $18.4) at the 50% Fibonacci retracement level, which stands at $19.5. I don't know about the short term, but from a long term perspective, the extrapolation of SILC's fundamental trends tells me stock has a much superior value (http://www.3stocksonfire.org/fundamental.model.php?ticker=SILC&portfolio=main).
In fact value rose substantially today because the Networking & Communication Devices average earnings multiple (http://finance.yahoo.com/q/co?s=SILC) (the number I use for my EPS multiple estimate) rose from about 26 to roughly 36 (I guess it has to do with CSCO's earnings out overnight).
SILC has regained the second place in the top holdings of the Main Portfolio (http://www.3stocksonfire.org/3stocksonfire.php), in terms of their attractiveness at this point in time. I'll continue holding SILC.
How so? CSCO dropped 6.5% so the average P/E should decrease instead of increase? Even if other companies in the group rise, the jump from 26 to 36 is too big not to be a data error.
Quote from: David Randolph on May 09, 2007, 04:13:31 PM
In fact value rose substantially today because the Networking & Communication Devices average earnings multiple (http://finance.yahoo.com/q/co?s=SILC) (the number I use for my EPS multiple estimate) rose from about 26 to roughly 36 (I guess it has to do with CSCO's earnings out overnight).
QuoteHow so? CSCO dropped 6.5% so the average P/E should decrease instead of increase? Even if other companies in the group rise, the jump from 26 to 36 is too big not to be a data error.
Not necessarily so, if EPS declined more than 6.5% CSCO's P/E would have increased, so the industry average would rise too. But you're right, this doesn't seem to be the case since CSCO's EPS was the highest ever and the change is too large. However, there's some confusion when making comparisons to the year ago period because CSCO changed its fiscal year (my fundamental data service has two quarters as Q1 2006, giving me $0.42 EPS for that period, so $0.31 now would mean a 26.2% drop in EPS).
Anyway, this confusion will prompt me to inquire Yahoo Finance on their method to calculate the industry average P/E (I wonder if it is a simple or weighted method). I'll do that tomorrow morning and will post the answer on this message board.
Thanks ;)
Hi David.
My question is when can i reenter to position in SILC.
after the latest increase in the stock price we can see a little "cool down" in the stock, now the price is ~ 20.5$.
When do you think it will be a good time to buy the stock again, or in what prices do u think the stock will be attractive again?
thanks in advance,
Aviv, Israel.
QuoteWhen do you think it will be a good time to buy the stock again, or in what prices do u think the stock will be attractive again?
I believe SILC is very attractive now, or I wouldn't be holding it. Technically the "optimal buying point" is $19.5, but I can't predict stock's short term movements. My take is six months from now SILC will comfortably be above $30.
Good luck :)
TNKS
you have one of the best websites i've seen, i enjoy reading it very much.
keep up the good work
Back in today at $19.90, holding up better than I though. Buying Time
Congrats Yukiii almost the lowest of the day so far.!!!
I'm also in but at 20
David hi.
What is your recommendation about buying SILC in more than 10% of my portfolio?
Do u consider it risky stick, speculative or that the chance is far grater than the risk?
thanks,
Aviv.
QuoteAnyway, this confusion will prompt me to inquire Yahoo Finance on their method to calculate the industry average P/E (I wonder if it is a simple or weighted method). I'll do that tomorrow morning and will post the answer on this message board.
Ok, I've asked Yahoo Finance how do they make the calculus for the industry P/E and industry P/S and the answer was it is a simple average of all publicly traded stocks in that industry, using 12 month trailing EPS and Sales numbers.
realcoolhead was right, yesterday's spike in the industry P/E was a data error, the value is back down to 25.59, so I've adjusted SILC's estimates to reflect that (http://www.3stocksonfire.org/fundamental.model.php?ticker=SILC&portfolio=main).
Quote from: avivwiz on May 10, 2007, 03:25:55 AM
TNKS
you have one of the best websites i've seen, i enjoy reading it very much.
keep up the good work
Thanks and I will avivwiz :)
Quote from: yukiii on May 10, 2007, 02:34:12 PM
Back in today at $19.90, holding up better than I though. Buying Time
Quote from: jorgegr on May 10, 2007, 02:44:58 PM
Congrats Yukiii almost the lowest of the day so far.!!!
I'm also in but at 20
Nice to have you, yukiii and jorgegr, on SILC's board.
Quote from: avivwiz on May 10, 2007, 02:58:13 PM
David hi.
What is your recommendation about buying SILC in more than 10% of my portfolio?
Do u consider it risky stick, speculative or that the chance is far grater than the risk?
thanks,
Aviv.
My recommendation is to hold 15 different stocks to be full invested with an equal weighting at start, which means one should always invest 6.66% of total equity in a new holding, given that doesn't create under performance due to trading costs.
But 10% of capital in one single holding doesn't seem all that risky, for example I now have 9.8% of capital in SILC and it doesn't keep me awake at night.
Curiously SILC's low today was the same of Tuesday's, $19.8. I don't have a rigid opinion about the short term, but SILC has this habit of touching the 50 days SMA before a new bull leg unfolds (this is the important part), like it happened when I bought the stock at $12.6.
$19.5, which is the 50% Fibonacci retracement level seems like a nice place to make a bottom, at the same time the 50 days SMA gets there. We could use a positive press release (like a new design win) after we touch support.
My valuation model tells me SILC will be a $89.62 stock in late 2009 (http://www.3stocksonfire.org/fundamental.model.php?ticker=SILC&portfolio=main), and therefore it should only be sold today at $57.41. I'll continue holding SILC, both in the Main Portfolio (http://www.3stocksonfire.org/3stocksonfire.php) and the 3 Stocks on Fire Portfolio (http://www.3stocksonfire.org/3stocksonfire_3sof.php).
Hi David.
i saw a post that you've published which you said you believe the market will be bearish
and that in this case SILC will trade in ~ 6$-7$ (p/e of 8).
How is that prediction, that the market will be bearish, and the prediction
that SILC will be worth 30$ in six month combined together?
when do you see the markets change? is it effecting the strategy for the mean while?
thanks,
Aviv
Quote from: avivwiz on May 11, 2007, 12:18:32 PM
Hi David.
i saw a post that you've published which you said you believe the market will be bearish
and that in this case SILC will trade in ~ 6$-7$ (p/e of 8).
How is that prediction, that the market will be bearish, and the prediction
that SILC will be worth 30$ in six month combined together?
when do you see the markets change? is it effecting the strategy for the mean while?
thanks,
Aviv
That's an old post, and there's a very, very long story behind it. To make a long story short, I turned from bullish to bearish on the general market in February 28, 2007, but saw my bearish reasoning was wrong so I turned back to being bullish again on March 14, 2007. I also learned that I shouldn't care about the general market movements when selecting my individual stock holdings. And made the valuation model I have now. It was an amazing period of very fast learning in my view. You should disregard that post completely (unless you go study all that is behind it).
SILC touched the 50% Fibonacci retracement level and almost touched the 50 days SMA (probably it touched the exponential 50 days moving average), I guess it is time to have a strong bounce, and perhaps the low of the correction was made today.
Good luck :)
Thanks ;D
Aviv.
Quote from: David Randolph on May 11, 2007, 12:28:23 PM
Quote from: avivwiz on May 11, 2007, 12:18:32 PM
Hi David.
i saw a post that you've published which you said you believe the market will be bearish
and that in this case SILC will trade in ~ 6$-7$ (p/e of 8).
How is that prediction, that the market will be bearish, and the prediction
that SILC will be worth 30$ in six month combined together?
when do you see the markets change? is it effecting the strategy for the mean while?
thanks,
Aviv
That's an old post, and there's a very, very long story behind it. To make a long story short, I turned from bullish to bearish on the general market in February 28, 2007, but saw my bearish reasoning was wrong so I turned back to being bullish again on March 14, 2007. I also learned that I shouldn't care about the general market movements when selecting my individual stock holdings. And made the valuation model I have now. It was an amazing period of very fast learning in my view. You should disregard that post completely (unless you go study all that is behind it).
SILC touched the 50% Fibonacci retracement level and almost touched the 50 days SMA (probably it touched the exponential 50 days moving average), I guess it is time to have a strong bounce, and perhaps the low of the correction was made today.
Good luck :)
Yes, I think maybe there was a final flush of weak hands today and now SILC is ready to rise again.
We finally got some bullish action on SILC, after the stock touched the 50% fibonacci retracement level, as expected. The 50 days SMA is still coming up at $18.70, and perhaps SILC will also test that one in the near future, but that's always very hard to know.
Like everybody else I wonder why SILC needed those $17.9 M. Anyway, I don't expect them to dilute shareholder's value much more going forward (after this I expect just a 2% dilution factor). I hope the money was to increase production to meet demand, since the company's products need a manufacturing process (http://www.silicom.co.il/pgx.php?p2=35).
The estimates I have on my valuation model (http://www.3stocksonfire.org/fundamental.model.php?ticker=SILC&portfolio=main) tell me SILC will be an $89.62 stock in late 2007, and the optimal selling price today is $57.41, therefore I'll continue holding SILC.
Giant Telecom Equipment Manufacturer Chooses Silicom Multi-Port Adapters for Its Security Appliances
Monday May 14, 7:38 am ET
KFAR SAVA, Israel--(BUSINESS WIRE)--Silicom Ltd. (NASDAQ & TASE: SILC) today announced that it has secured a Design Win from one of the world's largest telecommunications equipment manufacturers for a variety of its multiport Gigabit Ethernet adapters, including several of its market leading 6-port card models. The customer will use these high-performance products to enhance the connectivity of its new security appliance product line.
The customer's security appliances are high-performance firewall based gateways, filtering all data traffic before allowing it into Enterprise networks. Silicom's multiport adapters will be used to enable the appliances to deliver highest-possible throughput and to give them more connectivity ports per slot, thereby enhancing their flexibility and cost-effectiveness.
"We are excited that our products have been chosen by another telecom giant - in fact, one of the world's top-10 telecommunications equipment manufacturers," said Mr. Shaike Orbach, President and CEO of Silicom. "Our products remain clearly differentiated through their innovative functionality and complex designs, together with their excellent performance record with scores of customers. In addition, our extensive product range and strong R&D capabilities make us a desirable one-stop-shop for the industry's best gateway connectivity solutions.
"We believe this Design Win, into which we have already delivered production products, will lead to additional orders on an ongoing basis. Just as important, it demonstrates market need for our high-performance multiport product lines - especially our 6-port models - and their potential, along with our BYPASS products, as a strong revenue driver in the years ahead."
http://biz.yahoo.com/bw/070514/20070514005607.html?.v=1 (http://biz.yahoo.com/bw/070514/20070514005607.html?.v=1)
Thanks for posting the news Se7en :)
• Giant Telecom Equipment Manufacturer Chooses Silicom Multi-Port Adapters for Its Security Appliances (http://biz.yahoo.com/bw/070514/20070514005607.html?.v=1)
Business Wire (Mon 7:38am)
As we've seen on this thread, the CEO, over the latest conference call, said "no doubt there will be more design wins", so I'm not surprised by the news. I'm not sure what to think of the word "giant" in the title of a press release, I sure hope SILC doesn't have the "print shares machine" turned on. The recent $17.9 M private placement (http://biz.yahoo.com/bw/070504/20070504005358.html?.v=1) should be enough.
SILC was talking to 100 companies and they got one more design win, I believe they now have 47. The CEO said they expect about two new design wins per quarter, so perhaps we'll have another news like this in Q2 (but, obviously, it is difficult to time these issues).
The last time we had a similar piece of news was in March 19 (http://biz.yahoo.com/bw/070319/20070319005676.html?.v=1), and that took the stock from about $13.5 to around $24 six weeks later. Curiously enough the other press release was also right after the stock touched a support area, following a correction phase.
I expect SILC to continue its long term bullish trend and push towards new all time highs above $30. My valuation model points to an optimal selling price of $57.41 (http://www.3stocksonfire.org/fundamental.model.php?ticker=SILC&portfolio=main), so I'll keep on holding SILC.
Bought some SILC today @ $20.90
Quote from: Se7en on May 15, 2007, 03:55:14 PM
Bought some SILC today @ $20.90
Good move Se7en :)
SILC left a gap open and closed it today, since yesterday's news wasn't a positive surprise, because the CEO already said over the latest conference call that he expects about two new design wins per quarter.
Anyway, the news shows SILC continues on its growth path, and therefore making a simple extrapolation of Q1 2007 EPS number to the full year (multiplying $0.22 by 4 to get to a full year EPS of $0.88) seems wrong.
Everything is on track for the company to deliver on my long term estimates (http://www.3stocksonfire.org/fundamental.model.php?ticker=SILC&portfolio=main), so I'll keep holding SILC. Up or down 10% over the short term is just unpredictable noise, you don't want to try to catch all fluctuations, or you'll surely miss the main move, the only one that can bring you money over the long term.
SILC's fundamentals continue to improve, as we've seen with the latest news ...
• Giant Telecom Equipment Manufacturer Chooses Silicom Multi-Port Adapters for Its Security Appliances (http://biz.yahoo.com/bw/070514/20070514005607.html?.v=1)
Business Wire (Mon, May 14)
... but there's some more work to do on the technical side before the stock starts a bull run to new all time highs. Probably this correction won't end until there's a kiss on the 50 days SMA, like it happened in March. Today that moving average stands at $19.22.
I'll keep holding SILC for the long term.
I guess almost all weak hands are out of SILC now, and the stock is getting ready to start a third bull leg that will take it above $30. The more I study stocks the more I believe SILC is special, it's not everyday that you find a company consistently growing revenues by 84% with a 20% plus net profit margin.
I'll keep on holding SILC.
Nothing new on SILC today, it was a very low volume day with just 44,100 shares changing hands. The 50 days SMA is coming up at $19.54 and it will probably provide the support needed to sustain the current correction phase.
Sometime this year we'll get another big news or another very positive quarter that will take SILC above $30. That has been the long term trend, we just have to be patient. I'll continue holding SILC.
SILC seems to be waiting for the 50 days SMA before pushing back up again. For today the 50 days SMA will be standing at $19.68. I'll keep holding SILC.
SILC bounced 4.5% today, responding to the proximity of the 50 days SMA support. If recent fundamental trends continue (and I don't see a reason why they should change) SILC will be a $92.35 stock about three years from now (http://www.3stocksonfire.org/fundamental.model.php?ticker=SILC&portfolio=main). I'll continue holding SILC.
I'm also starting to get interested in another stock of the Israeli RAD group (http://www.rad.com/Home/0,6583,547,00.html), which is RDCM. I know Q1 was very ugly, but the balance sheet remains strong with about $9.2 M in cash. The company is now just a $22 M market cap with 2007 expected revenue of $22 M. I think it deserves a deeper study, perhaps tomorrow.
SILC has been building a base around the 50% Fibonacci retracement level as it waits for the 50 days SMA support, like it happened in March. I expect the stock to start a new bull leg towards all time highs when this consolidation phase is over. The catalyst can be a new design win or another strong quarterly result. Fundamentals remain very attractive, I'll keep holding SILC.
Finally SILC stands at the 50 days SMA. Technically it should rebound from this level, like it did in March.
There weren't any new fundamental developments on SILC today. Technically the stock closed just a bit below the 50 days SMA, like it happened last March. I'm not saying that the medium term future will be exactly the same, but I do want to say that the stock is fundamentally attractive at these levels and technically it should start rising anytime soon.
I'll keep holding SILC.
SILC bounced from the 50 days SMA support, as expected. Now it just needs to make a bullish breakout above the short term descending trendline on the chart below (Tuesday that line will be standing at $20.64, so a 1% rise will do the trick) to turn bullish, not only over the medium and long term time frames, but over the short term too.
Fundamentally I continue to see 2% dilution, 84% revenue CAGR, 25% net profit margin and a 26.37 earnings multiple (http://www.3stocksonfire.org/fundamental.model.php?ticker=SILC&portfolio=main). If these estimates are met SILC will be a $92.35 stock in late 2009.
Curiously enough, one of SILC's competitor's (which I believe is also a client), RVBD, continues to climb, even though it is still losing money. RVBD trades at 21 times revenues (http://finance.yahoo.com/q/co?s=rvbd), imagine if SILC were to trade at the same revenue multiple, it would be a $59 stock.
I believe it will be a multiple expansion that will lead SILC towards $30, even if we don't get further positive developments between now and the 2nd quarter results, which will be out just in August.
The WAN optimization market and the "work from everywhere" trend is just starting and SILC is at the center stage of it.
I'll continue holding SILC for the long term.
Any idea whats the reason behind the 2bucks pop today?? Not complaining at all..but just trying to make some sense of it..
Nice that the move is backed up with some good volume, MACD is heading to positive territory and a bullish cross is near! :)
Quote from: nicknite20 on May 29, 2007, 12:03:43 PM
Any idea whats the reason behind the 2bucks pop today?? Not complaining at all..but just trying to make some sense of it..
I guess you have two forces pushing SILC higher today and hopefully beyond today:
1 - There's a bullish breakout going on, after testing the 50 days SMA
2 - Multiple expansion will drive SILC higher. SILC doesn't need new and positive fundamental developments to reach $30 in my opinion.
Without any news out (at least not that I know of), SILC rallied 13.73% today on volume above average of roughly 300,000 shares.
As I've been writing, the rapid growth of the WAN optimization industry, coupled with the "work from anywhere" global emerging trend is making investors attach a very high multiple to stocks operating in the sector. For example, RVBD trades at 21 times revenues and it is already a $2.7 B market cap company, even though it made just a tiny $3.26 M profit in Q1 2007, after an history of heavy losses.
So, it wouldn't surprise me at all if SILC were to surpass $30, even without any new fundamental improvement, just due to an earnings multiple expansion. My take is SILC will earn about $1 per share in 2007, so it is trading at about 23 times earnings. It wouldn't shock me to see it trading at 40 times earnings instead, because of its growth rate and fat net profit margin.
But, let's enjoy the moment, nice bullish breakout :)
SILC filed its form 20-F with the SEC today (http://www.sec.gov/Archives/edgar/data/916793/000117891307001086/zk73804.htm). I read the first 5 pages, so far, so good. I'll read 5 pages per trading day going forward, even though I don't think I'll find anything new or surprising, it helps to understand the business (especially risks to forecasts) better.
Technically we've had a small pullback after yesterday's 13% advance. I'll continue holding SILC.
One more time back to $21, Then up again......
Quote from: yukiii on May 31, 2007, 02:35:50 PM
One more time back to $21, Then up again......
Is that so? Based on what, feeling?
Well, using a short term prediction tool (which has no value whatsoever to bring you wealth over the long term), I would say that the short term correction that should/could happen, already happened, since the stock touched the midpoint of Tuesday's strong white marubozu.
I read pages 6 - 10 of the Form 20-F filed with the SEC yesterday (http://www.sec.gov/Archives/edgar/data/916793/000117891307001086/zk73804.htm). There were the normal risk factors, nothing special.
I'll keep holding SILC.
Quote from: David Randolph on May 31, 2007, 06:27:09 PM
Well, using a short term prediction tool (which has no value whatsoever to bring you wealth over the long term), I would say that the short term correction that should/could happen, already happened, since the stock touched the midpoint of Tuesday's strong white marubozu.
[/quote]
I agree with you there. I think the short term retracement is over..........unless we should close below 22 :-\ I think this retracement is good short term. By no time, we'll be above 25.
SILC looking good!
Any news ?
25000 shares bought at once from 22.90 to 23.99 it's not a joke !!
there must be something cool very soon
Quote from: ygtrdr on June 01, 2007, 01:16:53 PM
SILC looking good!
Yes, now we have bullish trends in all time frames, medium and long term as well as short term.
Quote from: Garoh on June 01, 2007, 01:42:02 PM
Any news ?
25000 shares bought at once from 22.90 to 23.99 it's not a joke !!
there must be something cool very soon
No, no news out yet, but this smells like new design win coming ;) Or else it is just the multiple expansion that I've been talking about.
Either way, SILC is now above the 23.6% Fibonacci retracement level, so there will only be some resistance at $26.74, the all time high. Over the long term I expect fundamentals to keep improving and the stock to keep rising accordingly.
I'll continue holding SILC for the long term.
SILC had a bit of a pause today. The trend is bullish in all time frames. No news out. I'll continue holding SILC.
This the reason for the sell off today :
SOURCE: Form 144
ISSUER: SILICOM LTD
SYMBOL:
SILCFILER:
ZISAPEL YEHUDATITLE:
Chairman of the BoardBROKER: CIBC WORLD MARKETS
RESTRICTED SHARES TO SELL: 130,000 DATE REGISTERED: 5/29/2007APPROXIMATE DATE OF SALE: 5/16/2007 The Form 144 is filed with the Securities and Exchange Commission to
reflect the intention of any holder of restricted stock to sell those
shares. After the 144 is mailed to the S.E.C., the filer is permitted
to sell the shares, or any fraction of them,
within 90 days.
Form 144 Data Source: The Washington Service
(
[email protected] or 301-913-5100)
(END) Dow Jones Newswires
06-04-07 2324ET
23:24 060407
It will effect this stock more when this news come out on Yahoo ..
just for a short term ..
QuoteIt will effect this stock more when this news come out on Yahoo ..
just for a short term ..
Thanks for the information Garoh, I didn't get it at my news service, and it isn't at the SEC website (http://www.sec.gov/cgi-bin/browse-edgar?company=silicom&CIK=&filenum=&State=&SIC=&owner=include&action=getcompany) either.
So, Zisapel Yehuda will sell 130,000 of his 770,726 shares (http://www.sec.gov/Archives/edgar/data/916793/000117891307000284/zk73408.htm)? Doesn't seem to be a big deal, he'll keep holding 640,726 shares, that's still 320 times more than I do ;D. Selling restricted shares doesn't mean dilution, those shares were already counted in the number of shares outstanding.
Maybe the man wants to buy a new house, or an airplane, who knows?
I'm relieved to know that was the cause for SILC's sell off today, thanks for the information Garoh.
I'll keep holding SILC.
Zisapel Yehuda :
How do we know he finished sell those shares ??
He's taking the stock down badly >:(
Quote from: Garoh on June 06, 2007, 11:01:47 AM
Zisapel Yehuda :
How do we know he finished sell those shares ??
He's taking the stock down badly >:(
I think this is a buying opportunity..added some between 20.25-20.35
Bought somemore here 20.45
Quote from: yukiii on June 06, 2007, 11:11:42 AM
Bought somemore here 20.45
why buying more? people should never average down what if we see 19 tomorrow?and and and....if we close under the MA50 this could be a good short.....especially now if a possible corrections starts....interests concerning...i will short it under 20 with target of 12
not always the majority wins! i am sticking to my plans >:D
Quote from: ket1390 on June 06, 2007, 11:18:02 AM
Quote from: yukiii on June 06, 2007, 11:11:42 AM
Bought somemore here 20.45
why buying more? people should never average down what if we see 19 tomorrow?and and and....if we close under the MA50 this could be a good short.....especially now if a possible corrections starts....interests concerning...i will short it under 20 with target of 12
Nobody is averaging down. I recommended SILC at $12.6 as a long term investment because of the attractiveness of its fundamentals. I would average up and buy your shorted shares if I didn't have the money management rule of never averaging up or down.
Quote from: David Randolph on June 06, 2007, 12:16:29 PM
Quote from: ket1390 on June 06, 2007, 11:18:02 AM
Quote from: yukiii on June 06, 2007, 11:11:42 AM
Bought somemore here 20.45
why buying more? people should never average down what if we see 19 tomorrow?and and and....if we close under the MA50 this could be a good short.....especially now if a possible corrections starts....interests concerning...i will short it under 20 with target of 12
Nobody is averaging down. I recommended SILC at $12.6 as a long term investment because of the attractiveness of its fundamentals. I would average up and buy your shorted shares if I didn't have the money management rule of never averaging up or down.
where is your technical stop to lock in the gain if it goes bearish ?
Quote from: Garoh on June 05, 2007, 04:31:25 PM
This the reason for the sell off today :
SOURCE: Form 144
ISSUER: SILICOM LTD
SYMBOL: SILC
FILER: ZISAPEL YEHUDA
TITLE: Chairman of the Board
BROKER: CIBC WORLD MARKETS
RESTRICTED SHARES TO SELL: 130,000 DATE REGISTERED: 5/29/2007
APPROXIMATE DATE OF SALE: 5/16/2007
The Form 144 is filed with the Securities and Exchange Commission to
reflect the intention of any holder of restricted stock to sell those
shares. After the 144 is mailed to the S.E.C., the filer is permitted
to sell the shares, or any fraction of them, within 90 days.
Form 144 Data Source: The Washington Service
([email protected] or 301-913-5100)
(END) Dow Jones Newswires
06-04-07 2324ET
23:24 060407
It will effect this stock more when this news come out on Yahoo ..
just for a short term ..
Hi garoh
from did you get this information?
it doesn't seem to appear anywhere...
thanks'
Aviv
.
Quote from: Garoh on June 05, 2007, 04:31:25 PM
This the reason for the sell off today :
SOURCE: Form 144
ISSUER: SILICOM LTD
SYMBOL: SILC
FILER: ZISAPEL YEHUDA
TITLE: Chairman of the Board
BROKER: CIBC WORLD MARKETS
RESTRICTED SHARES TO SELL: 130,000 DATE REGISTERED: 5/29/2007
APPROXIMATE DATE OF SALE: 5/16/2007
The Form 144 is filed with the Securities and Exchange Commission to
reflect the intention of any holder of restricted stock to sell those
shares. After the 144 is mailed to the S.E.C., the filer is permitted
to sell the shares, or any fraction of them, within 90 days.
Form 144 Data Source: The Washington Service
([email protected] or 301-913-5100)
(END) Dow Jones Newswires
06-04-07 2324ET
23:24 060407
It will effect this stock more when this news come out on Yahoo ..
just for a short term ..
I don't think that is reason for the sell off. The shares are already sold. I think it just nervous selling by investors hitting stop limits.
"I don't think that is reason for the sell off. The shares are already sold. I think it just nervous selling by investors hitting stop limits."
I think so too.
Silc has had a healthy 13-15% correction and seems to be holding the 50 day MA.
I Just put my money where my mouth is and double downed at $20.60.
I am breaking all kinds of rules by increasing my position from 6.6% 12.2%, but I am a newborn "speculator."
Wx
Quote from: wxmang on June 06, 2007, 02:30:26 PM
"I don't think that is reason for the sell off. The shares are already sold. I think it just nervous selling by investors hitting stop limits."
I think so too.
Silc has had a healthy 13-15% correction and seems to be holding the 50 day MA.
I Just put my money where my mouth is and double downed at $20.60.
I am breaking all kinds of rules by increasing my position from 6.6% 12.2%, but I am a newborn "speculator."
Wx
Always double down if you have faith in the company and nothing has changed.
I've been thinking about SILC since yesterday, in doubt about the way I should write this update.
Four "negatives" happened over the past four months:
1) Q1 earnings were below my expectations. I had to review my revenue CAGR estimate from 2 to 1.84 and increase my dilution factor to 1.12.
• Silicom's Momentum Continues: Q1 Sales up 84% to $6.0M with Net Income of $1.2M (http://biz.yahoo.com/bw/070425/20070425005539.html?.v=1)
Business Wire (Wed, Apr 25)
I decided not to take profits (even though I knew the stock would decline after earnings), because I wanted to hold the stock for the long term, and I know that not so strong quarters always happen in between of a big long term advance.
2) The company made a $17.9 M private placement
• Silicom Ltd. Announces $17.9 Million Private Placement of Ordinary Shares (http://biz.yahoo.com/bw/070504/20070504005358.html?.v=1)
Business Wire (Fri, May 4)
I've held, saying the company opted to get financing right away, instead of slowly selling shares. I've increased the number of initial shares outstanding and reduced the dilution factor to the current 1.02.
3) One of the company's insiders decided to sell 130,000 of his 770,000 shares.
I kept the faith, because the insider will still hold 640,000 shares, and his selling probably isn't connected with the company's financial performance, like it happens in most cases.
4) The stock closed decisively below the 50 days SMA for the first time in 2007.
This makes me think about the best course of action ... fundamentally the company seems to be on track to earn more than $1 per share in 2007 (it earned $0.22 in Q1 2007) and revenue growth and net profit margin are awesome. The company is just a $137 M market cap, operating in the fast growing area of WAN optimization and server appliances. But of course, the future holds risks. It is possible that in Q2 2007, instead of making, say, $0.25 - $0.30 a share, SILC makes, say $0.10. Like it happened last year, at the same time, when a below trend quarter took the stock down 70% from its peak:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=37738;image)
Now, imagine you bought SILC in November 2005 at, say, $5. Today it is above $20, so it is more than a 300% return on your investment in about 18 months. But, in the middle of it, you would see the stock up 140% from your buying point and then go down to show you a loss of 25%. Would you be able to sustain this kind of adversity?
I don't think so, most of you guys would lose faith and just bail out.
Now coming back to the present, I may be right and SILC will be a $92.35 stock in late 2009 (http://www.3stocksonfire.org/fundamental.model.php?ticker=SILC&portfolio=main). Long term fundamental trends say that if everything continues, that will be outcome. However, it is possible that the private placement and the insider selling, happened around these levels because there will be a soft quarter, say, a $0.10 EPS quarter or worse. That could take the stock back down to $10 - $12, that is, after a 100% return, I would be losing. I could still be right about the long term, but it doesn't matter, because most of you would just bail out, not only of the stock, but leave the 3 Stocks Premium service too. You would lose faith not just in the stock, but in me as an analyst too.
So, what to do?
Well, technically the stock shouldn't break the 50% Fibonacci retracement level on close (that level stands at $19.4) and there's short term support at $20.12. If I put a stop at $18.9 I'll make a 50% profit on this trade.
I'm afraid I'll have to let the market decide what I'm going to do, if the stock trades down to $18.9 I'll kneel down and take my 50% profit. If not I'll keep holding.
The lesson for the future is: take your profit when you see the stock going down due to a fundamental development. For example, I could have sold SILC at $26 and CIMT before the 1st quarter earnings, because I saw the decline coming, but didn't want to lose sight of the long term, because I would like to have my 300% returns two years from now. But there's no absolute certainty of that being the outcome. And over the short term performance declined and several people just lost faith.
I'm sure you see the paradox.
Ideally, I would sell the stock near the top and buy back near the bottom, hence taking advantage of the intermediate swings. The problem is that in order to do that, one has to focus on short term information, and indications keep changing, and one isn't able to hold for the big swing that way.
This update is long enough already, the trading plan is:
HOLD SILC, unless the stock prints $18.9. If that's the case, SELL.
Hi David,
I hope all is well with you and your family. I am very confused about what you said in your last post:
>>The lesson for the future is: take your profit when you see the stock going down due to a fundamental development. For example, I could have sold SILC at $26 and CIMT before the 1st quarter earnings, because I saw the decline coming, but didn't want to lose sight of the long term, because I would like to have my 300% returns two years from now. But there's no absolute certainty of that being the outcome. And over the short term performance declined and several people just lost faith.<<
Are you suggesting that you anticipated declines in SILC and CIMT in excess of 25% - that were the result of (negative) fundamental developments? Up to this point, I did not think that there were "negative" fundamental developments affecting these 2 stocks that you thought would cause sharp declines.
I think it is a great idea to hold stocks for the long term, and to reap the benefits - but I do not think it is a good idea to hold the stock through sharp declines - especially sharp declines that we anticipate in advance, due to negative fundamental developments. I don't think this is "losing faith" as much as I think it is "losing capital". Regardless of how much "profit" we have in a stock, I consider that "profit" to be "capital" once it is gained - and I believe that we, as investors, should protect our "capital" in the best way we can.
To protect our capital, I believe we should avoid any declines that we can anticipate in advance - regardless if we choose to continue to invest in the stock for the long term or not. With SILC being 24% and CIMT 48% off the highs, I know that I would have liked to have avoided any part of these declines, if possible - and probably most people here feel the same as I do.
David, don't you think we should sell our position if we anticipate declines? What we are saying here is that there was a negative fundamental development in the company, but we do not know what the impact on the stock will be. In the case of CIMT, the impact was large. Isn't it possible that any deterioration in fundamentals could be an early sign of further future negative fundamental changes in that company and stock? Isn't it possible that CIMT does not have such a "bright" future? Shouldn't we wait for concrete evidence that CIMT is indeed headed down that "prosperous road"? Right now, we have concrete evidence that revenues and profits declined in the most recent quarter, and that the stock is 48% off the highs.
Thank you for your time and insight
Bourbon
There is a lot panic. The last few days the market has been down and SILC being a voltile small float has been down as well. The stock has had 12-13 quarters of growth. They are announcing new deals on a regular basis. (I can't wait for the next one to be announced, hopefully that will be trigger to start us on our way over 25). After next quarter earings, we will probably listed in the IBD top 100, which will give us huge exposure. Our earnings ratings is currently 74 once that reaches 80, which it should easily after next quarters earnings, we will be a shoo-in in the top 100. Our other scores all already high enough (in the mid to high 90's). With our small float, the IBD top 100 exposure, probable analyst coverage from some of the firms that bought the private plavement at $20.50, and the announcement of more deals, this has all the potential to be a huge winner. With all of these factors and some postive momentum, we might be able to hit 50 this year. I added more earilier this morning in the low 20's
I hope I'm wrong but this is what I see from a technical view :
I think this decline will end when we reach 17.70 to 17.90 :(
I could be wrong but I,ve seen it in other stocks before ...
There's someone keep selling all the way down .....Who ? >:(
Quote from: Garoh on June 07, 2007, 10:36:19 AM
I hope I'm wrong but this is what I see from a technical view :
I think this decline will end when we reach 17.70 to 17.90 :(
I could be wrong but I,ve seen it in other stocks before ...
There's someone keep selling all the way down .....Who ? >:(
I don't think we will see a close below $19.25 if we even get that low. The private placement at $20.50 is acting like a kind of support. I don't think we will go lower than about 5%-10% lower then the placement price.
Quote from: David Randolph on June 07, 2007, 04:44:33 AM
HOLD SILC, unless the stock prints $18.9. If that's the case, SELL.
What about the guys like me who bought this stock in the $20-21 range? Same advice?
There is no need to panic and sell based off the technicals or fundamentals. The fundamentals aren't bad enough to sell this stock. We all know where SILC is going long term. I know david doesn't like doubling down but nows the time to double down. If anything SILC will consolidate at these levels before rising again unless we get a near term catalyst. Once the 200 day moving average catches up we will take off again. Stay strong guys. I know where I'm putting my next pay check ;D
LOL!
Prodigykid6, when you say >>Once the 200 day moving average catches up we will take off again.<<
You know the 200 DMA is at $12.33, right?
Like David said previously, SILC might see another 70% decline off the highs - just like last year.
I guess the Question is: Can you be a long-term investor, and have a long-term investor mentality, without sitting through difficult declines (like the one that SILC went through) that can result from a bad quarter?
I think that preserving capital (aka Profits) needs to be a major part of our formula. If that means that we sell a stock to avoid major declines that can happen to small-cap, thinly traded companies, like SILC - then maybe a shorter term-horizon is more appropriate.
Just a thought and best of luck with all of your trades!
Bourbon ;D
Quote from: bourbonstreet_crawdaddy on June 07, 2007, 01:06:33 PM
LOL!
Prodigykid6, when you say >>Once the 200 day moving average catches up we will take off again.<<
You know the 200 DMA is at $12.33, right?
Like David said previously, SILC might see another 70% decline off the highs - just like last year.
I guess the Question is: Can you be a long-term investor, and have a long-term investor mentality, without sitting through difficult declines (like the one that SILC went through) that can result from a bad quarter?
I think that preserving capital (aka Profits) needs to be a major part of our formula. If that means that we sell a stock to avoid major declines that can happen to small-cap, thinly traded companies, like SILC - then maybe a shorter term-horizon is more appropriate.
Just a thought and best of luck with all of your trades!
Bourbon ;D
I'm not saying its going down to $12.33. I'm just saying that 200 day moving average will push up the stock price the closer it gets. Sounds like you already sold your shares and are looking for a dip. But if you are up big take a little off the table and buy on the dips.
Time to buy guys just hit support on the S&P 500 1495
As long as yields on the two and ten are above 5 I don't think we'll have a meaningful rally off support....
We are due for a "normal" correction.
Hoping to get at least 7% -10% this time.
Look at the trend line break on the S&P.
Technically this is not a good thing:
Quote from: yukiii on June 07, 2007, 01:59:28 PM
Time to buy guys just hit support on the S&P 500 1495
Bounced off support, let see if it holds. To bad Bill Gross had to make a comment and bring the market down again. He is usually wrong most of the time.
Closed at the 50 ma
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&b=5&g=0&id=p75293289261 (http://stockcharts.com/h-sc/ui?s=$SPX&p=D&b=5&g=0&id=p75293289261)
QuoteAre you suggesting that you anticipated declines in SILC and CIMT in excess of 25% - that were the result of (negative) fundamental developments?
More or less so, please read my update when the company posted 1st quarter earnings: SILC's update on earnings day (http://www.3stocksonfire.org/trading/index.php?topic=9030.msg96548#msg96548)
«I see the stock opening higher and if I were a short term trader I would certainly take profits. This is one of those cases where there's about 90% probability of the stock going down after today's gap up.»
For CIMT I didn't see the stock going down that much, but I saw a weak quarter coming, due to seasonality.
Anyway, your question is "why not sell, if you see a decline?" Let me try to explain my reasoning, point by point.
QuoteI think it is a great idea to hold stocks for the long term, and to reap the benefits - but I do not think it is a good idea to hold the stock through sharp declines - especially sharp declines that we anticipate in advance, due to negative fundamental developments.
There are short term and long term fundamental developments. You'll never be able to hold a stock for more than two years if you sell every time you see a short term negative fundamental development. There are always soft quarters, bad news ... think of a business instead of a stock. Not everything always goes well, but one needs to know what is relevant for the long term outcome and what may have a short term impact but doesn't affect the long term fundamentals of the business.
Do you think Warren Buffet, the best investor ever, would have held his core positions for 20 or 30 years, if he had sold when there were negative developments? How many times did Coca Cola have a bad quarter? How many times it went down more than 30% from its peak? However, Buffet held it all the way up throughout the decades and still holds it.
QuoteI don't think this is "losing faith" as much as I think it is "losing capital". Regardless of how much "profit" we have in a stock, I consider that "profit" to be "capital" once it is gained - and I believe that we, as investors, should protect our "capital" in the best way we can.
Yes, but trying to avoid losses so much you might end up creating them, never sticking to a business for the long term.
QuoteWith SILC being 24% and CIMT 48% off the highs, I know that I would have liked to have avoided any part of these declines, if possible - and probably most people here feel the same as I do.
Same thing, most stocks that go up several bags have those types of drawdowns several times, because not even good companies always deliver top results or never get overvalued.
QuoteIsn't it possible that CIMT does not have such a "bright" future? Shouldn't we wait for concrete evidence that CIMT is indeed headed down that "prosperous road"? Right now, we have concrete evidence that revenues and profits declined in the most recent quarter, and that the stock is 48% off the highs.
This is for CIMT's thread, I'll reply you there.
Quote from: DragonAMG on June 07, 2007, 12:04:14 PM
Quote from: David Randolph on June 07, 2007, 04:44:33 AM
HOLD SILC, unless the stock prints $18.9. If that's the case, SELL.
What about the guys like me who bought this stock in the $20-21 range? Same advice?
Sure, same advice. I hope the stock doesn't go that low, because I really like the long term fundamentals of the business, but I can't risk losing all the profit and stay alone in this room.
Thank you for your questions, update for SILC after the close.
Quote from: David Randolph on June 07, 2007, 03:17:21 PM
QuoteAre you suggesting that you anticipated declines in SILC and CIMT in excess of 25% - that were the result of (negative) fundamental developments?
More or less so, please read my update when the company posted 1st quarter earnings: SILC's update on earnings day (http://www.3stocksonfire.org/trading/index.php?topic=9030.msg96548#msg96548)
«I see the stock opening higher and if I were a short term trader I would certainly take profits. This is one of those cases where there's about 90% probability of the stock going down after today's gap up.»
For CIMT I didn't see the stock going down that much, but I saw a weak quarter coming, due to seasonality.
Anyway, your question is "why not sell, if you see a decline?" Let me try to explain my reasoning, point by point.
QuoteI think it is a great idea to hold stocks for the long term, and to reap the benefits - but I do not think it is a good idea to hold the stock through sharp declines - especially sharp declines that we anticipate in advance, due to negative fundamental developments.
There are short term and long term fundamental developments. You'll never be able to hold a stock for more than two years if you sell every time you see a short term negative fundamental development. There are always soft quarters, bad news ... think of a business instead of a stock. Not everything always goes well, but one needs to know what is relevant for the long term outcome and what may have a short term impact but doesn't affect the long term fundamentals of the business.
Do you think Warren Buffet, the best investor ever, would have held his core positions for 20 or 30 years, if he had sold when there were negative developments? How many times did Coca Cola have a bad quarter? How many times it went down more than 30% from its peak? However, Buffet held it all the way up throughout the decades and still holds it.
QuoteI don't think this is "losing faith" as much as I think it is "losing capital". Regardless of how much "profit" we have in a stock, I consider that "profit" to be "capital" once it is gained - and I believe that we, as investors, should protect our "capital" in the best way we can.
Yes, but trying to avoid losses so much you might end up creating them, never sticking to a business for the long term.
QuoteWith SILC being 24% and CIMT 48% off the highs, I know that I would have liked to have avoided any part of these declines, if possible - and probably most people here feel the same as I do.
Same thing, most stocks that go up several bags have those types of drawdowns several times, because not even good companies always deliver top results or never get overvalued.
QuoteIsn't it possible that CIMT does not have such a "bright" future? Shouldn't we wait for concrete evidence that CIMT is indeed headed down that "prosperous road"? Right now, we have concrete evidence that revenues and profits declined in the most recent quarter, and that the stock is 48% off the highs.
This is for CIMT's thread, I'll reply you there.
Quote from: DragonAMG on June 07, 2007, 12:04:14 PM
Quote from: David Randolph on June 07, 2007, 04:44:33 AM
HOLD SILC, unless the stock prints $18.9. If that's the case, SELL.
What about the guys like me who bought this stock in the $20-21 range? Same advice?
Sure, same advice. I hope the stock doesn't go that low, because I really like the long term fundamentals of the business, but I can't risk losing all the profit and stay alone in this room.
Thank you for your questions, update for SILC after the close.
David
I hope you are learning from your mistakes.
Summary in general as i repeated them many times before.
1. You can't have a portfolio of small caps for the longterm.
2. You are not Warren Buffet he picks mostly undervalued companies, not speculator small caps.
3. Today was a good day to buy, cheap stocks out there now....
4. The portfolio needs to be adjusted if its for the long term, large caps, mid and small. Your system only works if small caps are going up.
5. Sell your picks when overvalued as of today not 2 years from now.
If you follow this advice it will work much better for 3sof but requires more work for you.
I knew this would happen sooner or later to the portfolio, thats why I always take my profits.
Believe me I've learn the hard way. I could tell you some stories.
Yukiii i wouldnt buy stocks today...the correction might take longer....since july 2006 the market just went up....i couln t sleep with holding stocks long now. With daytrading, stalking stocks i made good profits the last 2 weeks ...portfolio almost up 100% in a year...24% the last 2 weeks...
>:D
I agree with ket1390.
See my S&P breakdown of the ascending trend line above.
Quote from: ket1390 on June 07, 2007, 04:13:08 PM
Yukiii i wouldnt buy stocks today...the correction might take longer....since july 2006 the market just went up....i couln t sleep with holding stocks long now. With daytrading i made good profits the last 2 weeks ...portfolio almost up 100% in a year...24% the last 2 weeks...
>:D
Well I guess if you daytrade nothing make sense untill the nest day. ;D
Many stocks hit there support today and were good buys. SILC, SIMO, ASY, TWIN, ZOLT,BITS, SMCI, STKL
Support didn't hold at 1495. Another couple percent down to go I think.
Quote from: yukiii on June 07, 2007, 04:22:40 PM
Quote from: ket1390 on June 07, 2007, 04:13:08 PM
Yukiii i wouldnt buy stocks today...the correction might take longer....since july 2006 the market just went up....i couln t sleep with holding stocks long now. With daytrading i made good profits the last 2 weeks ...portfolio almost up 100% in a year...24% the last 2 weeks...
>:D
Well I guess if you daytrade nothing make sense untill the nest day. ;D
Many stocks hit there support today and were good buys. SILC, SIMO, ASY, TWIN, ZOLT,BITS, SMCI, STKL
I am not daytrading all the time...just in wild times like this.......but i also consider fundamentals....but technicals has to be right or i dont care about fundamentals.
Quote from: wxmang on June 07, 2007, 02:17:53 PM
We are due for a "normal" correction.
Hoping to get at least 7% -10% this time.
Look at the trend line break on the S&P.
Technically this is not a good thing:
thanks wxmang...is there a short fund for the S+P?...like Qid for QQQQ....and DXD for Dow jones.
Quote from: ygtrdr on June 07, 2007, 04:24:38 PM
Support didn't hold at 1495. Another couple percent down to go I think.
The 50 ma is holding at 1490 after that look out below to 1420.
All four are holding at there 50 dow, sp500, nas, russell
Hi Ket1390,
Here ya go:
Here are the symbols for the three most liquid Ultra ETFs:
NASDAQ 100: (QLD) [2x long]; (QID) [2x short]
S&P 500: (SSO) [2x long]; (SDS) [2x short]
Dow 30: (DDM) [2x long]; (DXD_ [2x short]
Wx
Quote from: yukiii on June 07, 2007, 03:00:17 PM
Quote from: yukiii on June 07, 2007, 01:59:28 PM
Time to buy guys just hit support on the S&P 500 1495
Bounced off support, let see if it holds. To bad Bill Gross had to make a comment and bring the market down again. He is usually wrong most of the time.
Closed at the 50 ma
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&b=5&g=0&id=p75293289261 (http://stockcharts.com/h-sc/ui?s=$SPX&p=D&b=5&g=0&id=p75293289261)
MACD Hist looks bearish...this is the most reliable indicator i use...with success..mostly on weekly basis (elder was right thanks to his book i learned a lot there)
Quote from: ket1390 on June 07, 2007, 04:41:11 PM
Quote from: yukiii on June 07, 2007, 03:00:17 PM
Quote from: yukiii on June 07, 2007, 01:59:28 PM
Time to buy guys just hit support on the S&P 500 1495
Bounced off support, let see if it holds. To bad Bill Gross had to make a comment and bring the market down again. He is usually wrong most of the time.
Closed at the 50 ma
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&b=5&g=0&id=p75293289261 (http://stockcharts.com/h-sc/ui?s=$SPX&p=D&b=5&g=0&id=p75293289261)
MACD Hist looks bearish...this is the most reliable indicator i use...with success..mostly on weekly basis (elder was right thanks to his book i learned a lot there)
Let me get this straight the Dow is down like 500 points and now you predict the market will go down. If you look at my post on the correction may 26th I stated
We are coming up on June, and historical you would want to be out of the market by June 1 or 4th till the 3rd week in June. Or short small caps as a hedge SKK.
Some long-term Buys for your portfolio
*****BHI and *****HXM
****DE, MA, LVS, MBT, C, BAC, FLR, CBG
« Last Edit: May 28, 2007, 04:58:25 PM by yukiii »
QuoteDavid
I hope you are learning from your mistakes.
I hope so.
Quote1. You can't have a portfolio of small caps for the longterm.
Sure I can, most large caps were small caps in their beginning, of course.
Quote2. You are not Warren Buffet he picks mostly undervalued companies, not speculator small caps.
I'm not, but 30 or 40 years from now, if I live that long, I can be, not like Warren Buffet, but a very wealthy individual that did the right thing over the years and feels good about himself. I believe my stocks are undervalued, they're not "speculator small caps". Several big caps Buffet now owns were small caps 30 or 40 years ago.
Anyway, I recognize that my skills or efforts are still way below where they should be to pick exactly the right businesses to hold for the long term. Hence I should stick to my more active, undervalued/overvalued strategy.
Quote3. Today was a good day to buy, cheap stocks out there now....
So, they're cheap now that the market fell 4%, but they weren't cheap 4% higher? I disagree with your cheap/expensive view, it is too short term oriented. I don't want to buy stocks to win or lose 5 or 10%. My motives warrant more than that, or I wouldn't have a valid motive at all.
Quote4. The portfolio needs to be adjusted if its for the long term, large caps, mid and small. Your system only works if small caps are going up.
Good businesses that are mispriced by the market, will continue to go up, regardless of being a small or large cap. I think micro, stock by stock, not macro, sector by sector, or large caps vs small caps. Each case is a unique case, because it is a unique business.
QuoteI knew this would happen sooner or later to the portfolio, thats why I always take my profits.
Yeah, you always take your profits. Do you take your losses too? I've never seen you talk about your losses. Anyway, this isn't about you or me, it's a strategic discussion.
The portfolio is fine, it is up 15.2% in 2007, which annualized gives me about 40% profit. If I were to start today with $100,000 and make 40% a year for the next 33 years, I would reach $6.6 B by the time I retire, age 65.
You say you invest for 40 years, and I respect your experience yukiii, I've been investing for only 11 years. But I must say that I've met hundreds of traders and investors over the years, and almost all of them have a similar short term mentality. They all claim to have great gains, but over the years, I don't see that, I see them staying basically the same or even losing and giving up trading. Sure, they have 20 or 30% monthly gains, sometimes. But years go by and they don't seem to grow. I believe they don't grow because they're doing something that has no basis in the real economic world. In the real economic world, there are good businesses that thrive over the years, and others that shrink and disappear. To excel as an investor, one should buy the stocks of the good businesses and then hold them as they grow.
As I look at SILC, it seems like a great business to me. Its fundamental trends, in terms of revenue and EPS growth, are phenomenal. Valuation is attractive, because most industry peers trade at double the multiples. But it has risks. Its products can become obsolete. Companies that buy them products can develop in house solutions. They can dilute shareholder's value, and even as the business grows, the stock may go down. They did that recently, and I didn't like that.
Thinking of the present situation I must be humble and say that I don't know enough to see the long term future for SILC. I base my investment in recent fundamental trends, but there's no assurance those trends won't change, because, let's face it, the company operates in a niche market and it isn't one of those obvious situations of an expanding business with a unique product to offer consumers. There's the possibility of SILC having a below trend quarter, and the stock gaps down and I'll see all my profits evaporate.
If someone told me: "David, you have to buy 15 stocks that you're going to hold for 30 years no matter what happens and make no other investment whatsoever" I wouldn't put SILC on that list.
But, if the order was: "David, buy 15 stocks that you expect to rise the most over the next three years", without a doubt SILC would be on the list.
Geee, I've been writing this update for over two hours, I have a family too :)
Probably this was boring, the trading plan is:
HOLD SILC, unless the stock is set to close below $19, if that's the case, SELL (notice the slight change).
well...David and yukii, both of you have some good points, but i still believe David's SOF strategy would work well before the market turns to bear.
Since last correction, naz went up 10% without any good corrections, so a pull back is very reasonable like what is happening now, other wise we wont be able to see next big gain, right?
let's take a look at weekly chart:
1st UP wave = 1045 pts (2153 – 1108),
2nd UP wave = 628 pts (2378 – 1750),
Therefore, the 3rd UP wave must be < 628, which stops at 2012 + 628 = 2640.
Summer correction like usual? anyway, i think currently Naz unlikely to break 2640 point. very strong resistance.
So David, you think i am right? and how long do you think this correction will last?
BTW...i can not find a place to post these things on the forum like the daily thread we had before!?
nice link:
http://maya.tase.co.il/bursa/report.asp?report_cd=270616&CompCd=2107
not so nice chart ;D:
tomorrow will be interesting imho
David ,
You still don't get it.
You keep talking long term 2 years . But I bet you won't hold any of these 2 years.
In fact you have sold like 27 companies year to date. If you keep saying longterm then you sell when they go down or someone brings something up you did not notice.
Why not admit its not long term. You say hold SILC till it hits $59 in 2 years.
Now you say sell at $19.00. It would have been wiser to sell $23 or $24 and move on.
You say hold GIGM to $53, but what will you say if next quarter is bad and it goes to $12.00, sell at $11. Better to sell at $16 like many did. You do not follow your own rules.
You are up $15% YTD you should be much more, my fund FVL is up 20%ytd.
What you are doing is setting yourself up for failure.
By what you are saying sounds like you got it from a book on trading, Its easy to pick 15 companies and say hold them for 2 years and make alot of money. If it was that easy everyone would do that.
Most likely 8 will go up and 6 down each year.
The portfolio as it stands let say someone wants to start from fresh today.
They buy SILC,TBSI, NVTL, SNDA, ICOC don't see the others worth buying here. Now let say they go
up 30% the next 3 months.
you have 3 choices
a) sell all 5 fully valued and invest in 5 new undervalued selections.
b) sell 1/2 of each one and buy 3 new undervalued selections.
c) wait for them to correct back to 15%
Which one would you choose?
(A) Would be the best from experience. When selling when they are fully valued you are protecting
yourself from losses from the correction of 15%. When you select 5 new selections that are undervalued and the market corrects you would only lose maybe 5%.
So instead of being a 15% waiting for the market to go up, you are now at 25% waiting for your next 30% up. Dont you agreed I hope.
I am down just under 1% the last 3 days. I was short yesterday, today I bought the market might go down somemore but who cares as long as I got good values at support. from my experience they will all go back up quickly.
You say why buy today, beacuse stocks have been going down the last 3 days. Look at Goldman Sachs GS down 10% Its a good buy. look at SIMO its down 10% look at PRFT down 18% from its high, all good buys. Why buy EDAC and SIF at there Highs don't understand?
Quote from: ket1390 on June 07, 2007, 04:41:11 PM
Quote from: yukiii on June 07, 2007, 03:00:17 PM
Quote from: yukiii on June 07, 2007, 01:59:28 PM
Time to buy guys just hit support on the S&P 500 1495
Bounced off support, let see if it holds. To bad Bill Gross had to make a comment and bring the market down again. He is usually wrong most of the time.
Closed at the 50 ma
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&b=5&g=0&id=p75293289261 (http://stockcharts.com/h-sc/ui?s=$SPX&p=D&b=5&g=0&id=p75293289261)
MACD Hist looks bearish...this is the most reliable indicator i use...with success..mostly on weekly basis (elder was right thanks to his book i learned a lot there)
Pimco's Gross Says He's a Bond Bull in a Bear Market (Update1)
By Deborah Finestone
June 7 (Bloomberg) -- Bill Gross, manager of the world's biggest bond fund, said he continues to expect a ``mild bull market'' for the next year.
``We do like bond markets from this point forward for the next six months,'' Gross said in comments posted on the Pacific Investment Management Co.'s Web site today from a meeting of firm's fund managers in early May. ``But we do suggest in 2008, 2009 and 2010 that interest rates will be moving mildly higher.''
Gross reiterated that housing would slow the U.S. economy and the Federal Reserve will cut interest rates in the ``latter part of 2007.'' Pimco's $103 billion Total Return fund had trailed the performance of about three-quarters of comparable funds in the past year, in part because Gross stuck to his prediction that the Fed was either close to ending its cycle of 17 straight rate increases or about to lower borrowing costs.
Yields on benchmark 10-year note yield reached 5.13 percent today, the highest since July, according to bond broker Cantor Fitzgerald LP. Global bond yields surged today after New Zealand unexpectedly raised interest rates.
Gross wasn't available to comment today, said Mark Porterfield, an spokesman for the Newport Beach, California-based firm. Pimco, which oversees about $668 billion, is a unit of Munich-based insurer Allianz AG.
Global growth may ``exert some type of upward push in terms of inflation and ultimately in terms of interest rates,'' Gross said.
Interest Rate Forecast
Gross last month raised his forecast range for 10-year U.S. Treasury yields on concern inflation may quicken in countries with weakening currencies such as the U.S. Ten-year yields will probably range from 4 percent to 6.5 percent until 2011, he said. Gross had previously said the yield would fluctuate between 4 percent and 5.5 percent.
``After 25 years of being a bull market manager to all of a sudden become a bear market manager, although mildly so in terms of higher interest rates over the next three to five years, is sort of a major shift,'' he said. ``But I think it is a well- deserved shift.''
I expect just a summer correction like last year 1-2 months...long term bullish....but it s good david puts a stop in now he has to protect his 15% gain of the 3sof portfolio.....in case of correction i expect all stocks to retrace 10-30% (who knows). ...if he is not protecting his porfolio it will probably go down to -/+ =0% this year. Then this long term talking, writing doesn t help much.
The problem is when new members arrive they just have to buy the stocks higher in the portfolio as they were not here when 3sof entered like silc was at 12 dollar...but they buy at 21 like some did and the risk increases. Mid term holding would be better as new members get chances to get in in other stocks much earlier...so a new member is a bit lost when he enters to high then....or he waits 2-3 months for the next pick..can he do this ?....and the name of the page is still "3 stocks on fire". In 2005 in the beginning we took more risks here and took gains earlier....i think the portfolio is to fat.....i would start again with 100 000.-. The head gets fresh again. I did the same took the gains to the bank...and restarted...felt good.
But i have to say i thank david i was learning a lot here in the last 2 years...about trading...so thats very positve. The whole story 3sof is still great.
a good trading day for all
ket
Filed today
FORM F-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SILICOM LTD.
(Exact name of Registrant as specified in its charter)
Calculation of Registration Fee
Title of Each Class of
Securities to be Registered Amount to be Registered Proposed Maximum Aggregate
Price Per Security Proposed Maximum
Aggregate Offering Price Amount of
Registration Fee
Ordinary Shares, par value NIS 0.01 per share (1) 1,104,687 $23.85(2) $26,346,784 $808.85
Total $808.85
(1) Represents (i) 875,000 ordinary shares of the Registrant presently outstanding and (ii) 229,687 ordinary shares issuable upon exercise of the Registrant's Warrants. Pursuant to Rule 416 of the Securities Act of 1933, this registration statement also includes an indeterminate number of shares that may be issued to prevent dilution from stock splits, stock dividends or similar transactions that could affect the shares to be offered by selling stockholders.
(2) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) of the Securities Act of 1933 on the basis of the average of the high and low prices, as reported on the Nasdaq Capital Market on June 4, 2007.
Quote from: yukiii on June 07, 2007, 11:07:46 PM
David ,
You still don't get it.
You keep talking long term 2 years . But I bet you won't hold any of these 2 years.
In fact you have sold like 27 companies year to date. If you keep saying longterm then you sell when they go down or someone brings something up you did not notice.
Why not admit its not long term. You say hold SILC till it hits $59 in 2 years.
Now you say sell at $19.00. It would have been wiser to sell $23 or $24 and move on.
You say hold GIGM to $53, but what will you say if next quarter is bad and it goes to $12.00, sell at $11. Better to sell at $16 like many did. You do not follow your own rules.
You are up $15% YTD you should be much more, my fund FVL is up 20%ytd.
What you are doing is setting yourself up for failure.
By what you are saying sounds like you got it from a book on trading, Its easy to pick 15 companies and say hold them for 2 years and make alot of money. If it was that easy everyone would do that.
Most likely 8 will go up and 6 down each year.
The portfolio as it stands let say someone wants to start from fresh today.
They buy SILC,TBSI, NVTL, SNDA, ICOC don't see the others worth buying here. Now let say they go
up 30% the next 3 months.
you have 3 choices
a) sell all 5 fully valued and invest in 5 new undervalued selections.
b) sell 1/2 of each one and buy 3 new undervalued selections.
c) wait for them to correct back to 15%
Which one would you choose?
(A) Would be the best from experience. When selling when they are fully valued you are protecting
yourself from losses from the correction of 15%. When you select 5 new selections that are undervalued and the market corrects you would only lose maybe 5%.
So instead of being a 15% waiting for the market to go up, you are now at 25% waiting for your next 30% up. Dont you agreed I hope.
I am down just under 1% the last 3 days. I was short yesterday, today I bought the market might go down somemore but who cares as long as I got good values at support. from my experience they will all go back up quickly.
You say why buy today, beacuse stocks have been going down the last 3 days. Look at Goldman Sachs GS down 10% Its a good buy. look at SIMO its down 10% look at PRFT down 18% from its high, all good buys. Why buy EDAC and SIF at there Highs don't understand?
I think yukii has raised some very valid points. My take is that David strategy is still evolving. But let me spin another suggestion. I think it may help if we have a single portfolio of 15 equal position stocks. Of them, 3 could be swing trades [ a week to a month holding time or certain target price], 3 could be short term trades of 3 month, another 3 with holding time of about 6 month and still another 3 with holding time of 12 months and the last 3 with holding time of 2 years.
But again I have full faith in David's picks. Though I do think that we should had AAPL and MVIS [the story stocks with catalyst] about few weeks back when the catalyst was known. But I hope there will be others.
Again when the portfolio takes beating all the criticsm starts flowing strongly. Taken positively and not panickly it may be great. Applaud yukii for speaking up his mind.
Stocky
Not to sure we need a time period, and maybe 15 holdings.
We need some balance, some core holdings. Like Apple, Google, Att and GS , XTO (4)
Then some sector picks
Energy (1)
Metals (1) or Country Play
Value picks (2)
Swing picks (2)
Momentum picks (2)
special situations (2)
Something like this.
The 3sof missed out on the energy, mining and utilities and reit big rally this year. So we need to make sure we on in the right sector and caps small,mid and large.
Futures are up alot right now, hope we get my rally, since I jumped all in today with both feet.
All the analyst were on tv today saying sell market will go down another 15%, then you just have to buy ;D
Yukiii,
Think you're making some valid points too, but what I miss is that you let us in on your portfolio and the buying and selling desicions before hand on your picks.
Others have given critism, and indeed always when the 3SOF portfolio takes a beating, in the past but only few let us in on their 'better' strategies... :-\ :-\ :-\ And I can't name a single one who did that over a longer period of time, giving regular updates.
If you would do that it would give your posts maybe more value. I know it would to me :)!
Amarens
Yukiii - Take David up on his offer - let him set you up a portfolio here on 3SoF. What do you have to lose?
Quote from: dnickers on June 08, 2007, 04:47:23 AM
Yukiii - Take David up on his offer - let him set you up a portfolio here on 3SoF. What do you have to lose?
I don't have any problem with that....
Quote from: yukiii on June 08, 2007, 04:54:41 AM
Quote from: dnickers on June 08, 2007, 04:47:23 AM
Yukiii - Take David up on his offer - let him set you up a portfolio here on 3SoF. What do you have to lose?
I don't have any problem with that....
Cool, I'll have to talk to Ramsburg over the weekend so that he sets everything up and will sent you a private message to discuss the details of your more committed participation in 3Stocks.
Thank you.
Quote from: David Randolph on June 07, 2007, 06:43:01 PM
HOLD SILC, unless the stock is set to close below $19, if that's the case, SELL (notice the slight change).
What?!? Your entry point is $14 or so? You have plenty of room to have strong hands and let this one run. Have you forgot about the recent design wins that will be reflected in the next earnings release? The time to sell was at $25; not $19. $19 is the time to buy. Don't let this one get away from you that cheap.
I agree it is a great idea for Yukiii to have his portfolio open here. He is an active participant, although at times too passionate, he sure will have a positive input.
I'd like to comment on the strategy discussion. There is no perfect strategy. There are too many variables in the market. The long term strategy is the best, but it is also the most difficult one to realize.
What David said earlier would be helpful (I rephrase): "buy with a long-term price evolution in mind given sound fundamental and technical trends. HOLD as long as the trends persist; HOLD through SOLELY technical corrections. SELL when you sense a change in fundamental setup or after the fact right away. Investors will take the srock unjustifiably low anyway. BUY again if the fundamental story BECOMES good again and the technicals point up".
I think this is something along lines what Yukiii has been trying to say and what David indirectly said himself! They just talk 2 different languages!!!
And to Stocky's point - I've been watching the bloody APPL and AMZN after their excellent catalysts on the market were made known! And I didn't buy 'cause all my money was in here. So I agree, we shouldn't neglect what market decides for us - just follow it.
Quote from: ket1390 on June 08, 2007, 01:33:54 AM
The problem is when new members arrive they just have to buy the stocks higher in the portfolio as they were not here when 3sof entered like silc was at 12 dollar...but they buy at 21 like some did and the risk increases. Mid term holding would be better as new members get chances to get in in other stocks much earlier...so a new member is a bit lost when he enters to high then....or he waits 2-3 months for the next pick..can he do this ?....and the name of the page is still "3 stocks on fire". In 2005 in the beginning we took more risks here and took gains earlier....
To stop the critisim, we should bring back the name of the game "The 3 Stocks On Fire Portfolio".... keep the Main Portfolio for long-term hold and let them follow who ever wants to follow it.
C'mon! lets get 3SOF up and running... I bet a lot of subscribers will flow in. ;)
Just curious Yukii - Like David, will you be selling if it breaks $18.90?
Hey guys just got up here in Hawaii, market is up that's great. I would hold onto SILC and see where it goes going into earnings in August. No point selling now.
Keep buying yukkii...
Morgan Stanley issues triple sell warning on equities
By Ambrose Evans-Pritchard
Last Updated: 12:19am BST 07/06/2007
Morgan Stanley has advised clients to slash exposure to the stock market after its three key warning indicators began flashing a "Full House" sell signal for the first time since the dotcom bust.
Morgan Stanley has advised clients to slash exposure to the stock market after its three key warning indicators began flashing a sell signal
Morgan Stanley warns the 'mid-cycle rally is over'
Teun Draaisma, chief of European equities strategist for the US investment bank, said the triple warning was a "very powerful" signal that had been triggered just five times since 1980.
"Interest rates are rising and reaching critical levels. This matters more than growth for equities, so we think the mid-cycle rally is over. Our model is forecasting a 14pc correction over the next six months, but it could be more serious," he said. Mr Draaisma said the MSCI index of 600 European and British equities had dropped by an average of 15.2pc over six months after each "Full House" signal, with falls of 25.2pc after September 1987 and 26.2pc after April 2002. "We prefer to be on the right side of these odds," he said.
The first of the three signals Morgan Stanley monitors is a "composite valuation indicator" that divides the price/earnings ratio on stocks by bond yields. It measures "median" share prices that capture the froth of the merger boom, rather than relying on a handful of big companies on the major indexes.
"If you look at all shares, the p/e ratio is at an all-time high of 20," he said.
advertisement
The other two gauges measure fundamentals such as growth and inflation, as well as risk appetite. "Investors are taking far too much comfort from global liquidity. Markets always return to fundamental value, so people could be in for a rude awakening. This is the greater fool theory," he said. "The trigger may be rate rises by the Bank of Japan, or a widening of credit spreads. There are lots of little triggers."
Morgan Stanley is not predicting a recession, believing bond yields will fall during a correction and act as an "automatic stabiliser" for the world economy. Once the market shakes off the latest excesses, it's back to the races.
source:
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/06/06/cnmorgan106.xml
Quote from: ket1390 on June 08, 2007, 12:28:34 PM
Keep buying yukkii...
Morgan Stanley issues triple sell warning on equities
By Ambrose Evans-Pritchard
Last Updated: 12:19am BST 07/06/2007
Morgan Stanley has advised clients to slash exposure to the stock market after its three key warning indicators began flashing a "Full House" sell signal for the first time since the dotcom bust.
Morgan Stanley has advised clients to slash exposure to the stock market after its three key warning indicators began flashing a sell signal
Morgan Stanley warns the 'mid-cycle rally is over'
Teun Draaisma, chief of European equities strategist for the US investment bank, said the triple warning was a "very powerful" signal that had been triggered just five times since 1980.
"Interest rates are rising and reaching critical levels. This matters more than growth for equities, so we think the mid-cycle rally is over. Our model is forecasting a 14pc correction over the next six months, but it could be more serious," he said. Mr Draaisma said the MSCI index of 600 European and British equities had dropped by an average of 15.2pc over six months after each "Full House" signal, with falls of 25.2pc after September 1987 and 26.2pc after April 2002. "We prefer to be on the right side of these odds," he said.
The first of the three signals Morgan Stanley monitors is a "composite valuation indicator" that divides the price/earnings ratio on stocks by bond yields. It measures "median" share prices that capture the froth of the merger boom, rather than relying on a handful of big companies on the major indexes.
"If you look at all shares, the p/e ratio is at an all-time high of 20," he said.
advertisement
The other two gauges measure fundamentals such as growth and inflation, as well as risk appetite. "Investors are taking far too much comfort from global liquidity. Markets always return to fundamental value, so people could be in for a rude awakening. This is the greater fool theory," he said. "The trigger may be rate rises by the Bank of Japan, or a widening of credit spreads. There are lots of little triggers."
Morgan Stanley is not predicting a recession, believing bond yields will fall during a correction and act as an "automatic stabiliser" for the world economy. Once the market shakes off the latest excesses, it's back to the races.
source:
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/06/06/cnmorgan106.xml
Teun Draaisma. Don't know him. Yeah he tells people that the european market will go down 15%
after they have gone down 6% already. Then he see's market going back up. Duh a bit late he should have put this report out a week ago.
The fast money traders on CNBC werent too impressed with the historical accuracy of the Morgan Stanely triple sell call.
Its a good friday, shorts are covering, market up 124. I said buy yesterday hope some of you got in to some bargins yesterday.
Thanks for your strategic inputs, I'll consider them, but you know, I can't please all styles at the same time. I believe the important thing is that I provide valuable information and share trading experiences.
Concerning SILC, buddjas1 gave an advice on the stock:
Quotehttp://What?!? Your entry point is $14 or so? You have plenty of room to have strong hands and let this one run. Have you forgot about the recent design wins that will be reflected in the next earnings release? The time to sell was at $25; not $19. $19 is the time to buy. Don't let this one get away from you that cheap.
You're right, at $25 - $26 it was obvious that a fall would inevitably happen, and at the time I said (not in the exact update of the high, but the next one): "I'm not going to recommend selling SILC here to then recommend buying it back $3-$5 lower". We're now about $5 below, so ... why the weak hands, everything is going as expected.
Well, not everything, in between there was a private placement that diluted shareholder's value. It took my estimates down. But, as I read the CEO's words from the latest earnings release:
«Commenting on the results, Shaike Orbach, President and CEO, said, "The momentum of our business accelerated again during the first quarter, enabling us to achieve another record quarter in terms of revenues, operating profit, net profit and cash. This strong performance demonstrates the cumulative benefit of our growing Design Win platform, together with the ramp-up of demand for our BYPASS adapters. Our business is being driven by the exciting growth of several target markets, especially the WAN Optimization market, which is
still in the early growth phase. We are working to take advantage of our favorable positioning to address this and other high-potential markets, and are
optimistic regarding our ability to deliver strong growth over the long term."»
There were some positive news too, like the "Giant telecom (http://biz.yahoo.com/bw/070514/20070514005607.html?.v=1)" news (I didn't like the tone of it, but ...).
Considering all I've been through with SILC, forecasting a short term decline and not acting on it because I wanted to be a long term investor and see beyond a "weaker than expected" quarter, I guess I can't chicken out and put a trailing stop, asking for the market to shake me out, before doing what I always expected it to do.
Therefore, I'll change my trading plan for SILC again, and will keep holding whatever happens.
Triple applaud. :D
Quote from: David Randolph on June 08, 2007, 04:28:07 PM
Thanks for your strategic inputs, I'll consider them, but you know, I can't please all styles at the same time. I believe the important thing is that I provide valuable information and share trading experiences.
Concerning SILC, buddjas1 gave an advice on the stock:
Quotehttp://What?!? Your entry point is $14 or so? You have plenty of room to have strong hands and let this one run. Have you forgot about the recent design wins that will be reflected in the next earnings release? The time to sell was at $25; not $19. $19 is the time to buy. Don't let this one get away from you that cheap.
You're right, at $25 - $26 it was obvious that a fall would inevitably happen, and at the time I said (not in the exact update of the high, but the next one): "I'm not going to recommend selling SILC here to then recommend buying it back $3-$5 lower". We're now about $5 below, so ... why the weak hands, everything is going as expected.
Well, not everything, in between there was a private placement that diluted shareholder's value. It took my estimates down. But, as I read the CEO's words from the latest earnings release:
«Commenting on the results, Shaike Orbach, President and CEO, said, "The momentum of our business accelerated again during the first quarter, enabling us to achieve another record quarter in terms of revenues, operating profit, net profit and cash. This strong performance demonstrates the cumulative benefit of our growing Design Win platform, together with the ramp-up of demand for our BYPASS adapters. Our business is being driven by the exciting growth of several target markets, especially the WAN Optimization market, which is still in the early growth phase. We are working to take advantage of our favorable positioning to address this and other high-potential markets, and are optimistic regarding our ability to deliver strong growth over the long term."»
There were some positive news too, like the "Giant telecom (http://biz.yahoo.com/bw/070514/20070514005607.html?.v=1)" news (I didn't like the tone of it, but ...).
Considering all I've been through with SILC, forecasting a short term decline and not acting on it because I wanted to be a long term investor and see beyond a "weaker than expected" quarter, I guess I can't chicken out and put a trailing stop, asking for the market to shake me out, before doing what I always expected it to do.
Therefore, I'll change my trading plan for SILC again, and will keep holding whatever happens.
Triple Bottom today! Reversal next week
Quote from: realcoolhead on June 08, 2007, 04:42:55 PM
Triple applaud. :D
Quote from: David Randolph on June 08, 2007, 04:28:07 PM
Thanks for your strategic inputs, I'll consider them, but you know, I can't please all styles at the same time. I believe the important thing is that I provide valuable information and share trading experiences.
Concerning SILC, buddjas1 gave an advice on the stock:
Quotehttp://What?!? Your entry point is $14 or so? You have plenty of room to have strong hands and let this one run. Have you forgot about the recent design wins that will be reflected in the next earnings release? The time to sell was at $25; not $19. $19 is the time to buy. Don't let this one get away from you that cheap.
You're right, at $25 - $26 it was obvious that a fall would inevitably happen, and at the time I said (not in the exact update of the high, but the next one): "I'm not going to recommend selling SILC here to then recommend buying it back $3-$5 lower". We're now about $5 below, so ... why the weak hands, everything is going as expected.
Well, not everything, in between there was a private placement that diluted shareholder's value. It took my estimates down. But, as I read the CEO's words from the latest earnings release:
«Commenting on the results, Shaike Orbach, President and CEO, said, "The momentum of our business accelerated again during the first quarter, enabling us to achieve another record quarter in terms of revenues, operating profit, net profit and cash. This strong performance demonstrates the cumulative benefit of our growing Design Win platform, together with the ramp-up of demand for our BYPASS adapters. Our business is being driven by the exciting growth of several target markets, especially the WAN Optimization market, which is still in the early growth phase. We are working to take advantage of our favorable positioning to address this and other high-potential markets, and are optimistic regarding our ability to deliver strong growth over the long term."»
There were some positive news too, like the "Giant telecom (http://biz.yahoo.com/bw/070514/20070514005607.html?.v=1)" news (I didn't like the tone of it, but ...).
Considering all I've been through with SILC, forecasting a short term decline and not acting on it because I wanted to be a long term investor and see beyond a "weaker than expected" quarter, I guess I can't chicken out and put a trailing stop, asking for the market to shake me out, before doing what I always expected it to do.
Therefore, I'll change my trading plan for SILC again, and will keep holding whatever happens.
The stock - DOESN'T LOOK GOOD.
I'm sorry but now this is the test for the short term.
the stock has a resistance in the 19.7$, but as we all could see the stock closed in 19.88$
but the difference is that the MACD histogram is negative and in the mean time just getting more negative by the day.
i liked the long term fundamentals of SILC but we shouldn't forget that the stock is currently trading in P/E of 33 after the decline.
there are people who are Selling after a huge profit - and many More as David who will sale in the stock will cross the 50% Fibonacci.
unless the stock is going to show that it is holding the 19.7$ Resistance I'm afraid that we'll see
allot of people selling in order to try and save their profits.
SILC 11% of the float is short now.
top holders
BJURMAN, BARRY & ASSOCIATES 331,000 5.24 $5,451,570 31-Mar-07
OBERWEIS ASSET MANAGEMENT INC. 248,700 3.93 $4,096,089 31-Mar-07
While waiting for SILC to go back up,
Comex gold has been declining since peaking at $698.0 on April 20. Precious metal will stabilize this week, as weakness approaches the 200-day simple moving average at $640.7. With increasing economic uncertainty in the wake of last week's dramatic rise in US Treasury bond yields. Buy gold stocks AUY, EGO as gold approaches $641.
As I remember correctly 3SOF rules indicate each topic should have its own thread
this one is for SILC and therefore any other good comment should be elsewhere.
Suggest we all stick to the rules and guidelines as in any organized community.
Thanks
Quote from: avivwiz on June 09, 2007, 02:19:51 PM
The stock - DOESN'T LOOK GOOD.
I'm sorry but now this is the test for the short term.
the stock has a resistance in the 19.7$, but as we all could see the stock closed in 19.88$
but the difference is that the MACD histogram is negative and in the mean time just getting more negative by the day.
i liked the long term fundamentals of SILC but we shouldn't forget that the stock is currently trading in P/E of 33 after the decline.
there are people who are Selling after a huge profit - and many More as David who will sale in the stock will cross the 50% Fibonacci.
unless the stock is going to show that it is holding the 19.7$ Resistance I'm afraid that we'll see
allot of people selling in order to try and save their profits.
I agree totally with you
RSI 2 and fast stochastic say its way over sold. wouldn't the resent decline simply be a short profit taking which was expected?
so wouldn't this be a great opportunity for it to come back?
don't get me wrong I don't know as much as you guys do about the market, after all that is why I pay for this service so I can have another avenue through which I can gather more information in order to make a more informed decision on my own trades.
I believe SILC will pullback a bit.
If I am holding now my shares and not holding it for the long-term, then I would sell from here and come back later at the support area at $16.00, that's about 20% down from the current level.
But I also believe that this company will go up over the years to come, I like their products (PCI Express Adapters this is way faster than PCI.... and other networking equipment. ;)
Don't forget to see what SILC is doing in the Israeli market.
i'll keep you all posted
Quote from: DragonAMG on June 08, 2007, 11:58:22 AM
Just curious Yukii - Like David, will you be selling if it breaks $18.90?
Actually the old low was 19.06 on May 6th so that would be key support if you adjust that for now it would be closed to $19.37. If you notice on friday we went down to $19.37 then recovered to 19.93. Then closed at 19.85 after the close. I would watch those numbers on Monday. The last two candlesticks formed a Bullish (Doji) Star Pattern. This is a bullish reversal pattern that marks a potential change in trend. We will see??
Quote from: Garoh on June 07, 2007, 10:36:19 AM
I hope I'm wrong but this is what I see from a technical view :
I think this decline will end when we reach 17.70 to 17.90 :(
I could be wrong but I,ve seen it in other stocks before ...
There's someone keep selling all the way down .....Who ? >:(
I still have the same point of view :
I sold half of my position after I've seen the news about selling 130,000 shares and when it broke 22.88 and I still see the price I mentioned which is 17.70 to 17.90 maybe this week ..
that would be my entry price of not I will wait until It close above 21.50 and buy back ....
This is a great stock .. I Invest and in the same time I daytrading do I don't recommend to sell this stock as long as it a short time change ...
I still wish I'm wrong in my thoughts
drifting lower on light volume today...
SILC went down some more today, even as the market went up, and I guess the cause is the selling by some core shareholders, partially or completely. Or better, the cause for today's fall was the selling from small fish because of reports saying that big sharks sold their position in SILC. There was an SEC filing saying that Bjurman Barry & Associates is now holding 0 shares of SILC, instead of the 663,100 shares they held in December 2006:
Form SC 13G - 06/08/2007 (http://www.sec.gov/Archives/edgar/data/916793/000093511307000019/sc13g0531.txt)
Form SC 13G - 12/27/2006 (http://www.sec.gov/Archives/edgar/data/916793/000093511306000157/sc13g12.txt)
Well, this firm sold, others bought. Shares are always changing hands, and there's no reason to believe that sellers know more than buyers, in my opinion. What I care about isn't who owns the shares, but how much they'll be worth.
Given the current fundamental trends I believe SILC will be worth a lot more than the current market price. I see at least $1 EPS in 2007, and that means SILC is trading at less than 20 times forward earnings, and I don't think that's fair given the company's 84% revenue growth rate and the 20% plus net profit margin.
I'll continue holding SILC.
From magic on Yahoo boards.
SILC closed at $6.56 before its October/06 earning. After the earning, SILC surged to as high as $9.39 in 3 days and then started to pullback. The stock was mostly traded at middle $7 level even though it did drop below $7 shortly. It built a solid base at $7 and then started to move up before the next earning. The stock closed at $10.00 before its January/07 earning. After the earning, the stock surged to as high as $16.00 in less than 2 weeks and started to pullback. It found a strong support at $12 even though it did drop below $12 shortly. The stock spent a couple of weeks to build a base at $12 and then started to move up again before the next earning. It closed at $24.66 before its April/07 earning. After the earning, the stock rose to as high as $26.74 and then started to pullback. The stock found a strong support at $20 even though it did drop below that a couple of times. This strong support was based on SILC's low forward PE (about 20), compared favorably with its peers such as RVBD (forward PE of about 80). Also, the private placement price of $20.50 also served as a protection here because institutions didn't buy this stock for a loss. Therefore, even last weeks' brutal selling of over 300K shares by Bjurman, Barry & Associates did not undermine this support. Bjurman, Barry & Associates had at least quadrupled in their investment in this stock because when I accumulated this stock at $5 last September, they were also a big holder.
If we look at the timing, SILC was basing at $12 exactly 3 months ago (early to middle March). The stock started to move up in middle March and doubled in a month. Now SILC is basing again at $20. With Bjurman, Barry & Associates out of the way for a big profit, we won't have many sellers below the private placement price. As the next earning is getting closer, we will probably see the pre-earning run, similar to last quarter again.
we are bleeding slowly everyday... when is this going to end?
As long as bond rates are moving up I don't see how stocks can rally especially small caps. I think this will hit the 61% retracement on the fib. I will look to start accumulating in that general price range.
I was pretty unlucky with 3 stocks on Fire Portfolio: I bought the three stocks at their picks and now down 25% on the whole portfolio...ouch...
I am strongly considering just cutting my losses with SILC and moving on. Thoughts? David do you plan on holding this?
Weekly MACD Bearish Cross, SILC is going for the support area possibly @ $16 or at $12 area.
-- price is now below 9sma weekly chart
Quote from: Terliso on June 12, 2007, 11:22:23 AM
Weekly MACD Bearish Cross, SILC is going for the support area possibly @ $16 or at $12 area.
-- price is now below 9sma weekly chart
Based on David's original decision to sell his position at 18.92, the action of the last week, your technical analysis, overall market correcting, and my gut feeling, I have decided to cut my losses in this stock an I am out at $18.76. I am a newbie in the stock market and I don't have the stomach to watch this drop anyone. Like others I believe in this company and will look to re-enter at a lower price. Good luck to everyone who decides to hold this (I wish I could).
Got stopped Out at $19.01
Hi David,
I hope that you are having a terrific day. Would you please take a moment to update your recommendation for SILC for the board members?
I am confused about whether we should Hold or Sell SILC at this point - now that the stock looks like it will close below $18.90?
Also David, do you think that SILC might drop significantly, possibly to the $10-12 range now that major support around $19 has been broken?
Thanks as always, and keep up your great work!
Bourbon :)
Hi Bourbon, I hope you're doing well too.
The instruction is always the one you receive with your daily newsletter. I've made up my mind to hold SILC whatever happens over the latest update, because I believe in the long term fundamentals of the company and knew the market would try everything to shake me out of my long term position.
I believe this course of action is the best to ensure a superior long term performance.
However, each individual is free to do what he wants to do, of course.
I'll keep holding SILC for the long term, expecting to take profits at $50 plus 2 years from now. Good luck :)
Thank You for your reassurance David.
I guess that I am just having a difficult time adjusting to our new strategy, and that I need to learn to have the discipline that is required to profit from it.
I am thankful that you have "strong hands", and continue to reiterate to all of the board members that what we are doing is the right thing, and that we will reap the rewards that we are seeking. Patience is the key - but is not easy to demonstrate from day to day, and week to week.
Have a terrific week David
Bourbon ;)
Quote from: Garoh on June 10, 2007, 07:01:51 AM
Quote from: Garoh on June 07, 2007, 10:36:19 AM
I hope I'm wrong but this is what I see from a technical view :
I think this decline will end when we reach 17.70 to 17.90 :(
I could be wrong but I,ve seen it in other stocks before ...
There's someone keep selling all the way down .....Who ? >:(
I still have the same point of view :
I sold half of my position after I've seen the news about selling 130,000 shares and when it broke 22.88 and I still see the price I mentioned which is 17.70 to 17.90 maybe this week ..
that would be my entry price of not I will wait until It close above 21.50 and buy back ....
This is a great stock .. I Invest and in the same time I daytrading do I don't recommend to sell this stock as long as it a short time change ...
I still wish I'm wrong in my thoughts
We are very close to the target .....
The stock is oversold now and it should finish this drop at that price (17.70 to 17.90 )
I'm repeating this again and again and still wish it rebounds from these levels :)
David keep the good work
Why $17.80, I show next support at $16.87
Quote from: DragonAMG on June 12, 2007, 12:19:07 PM
Quote from: Terliso on June 12, 2007, 11:22:23 AM
Weekly MACD Bearish Cross, SILC is going for the support area possibly @ $16 or at $12 area.
-- price is now below 9sma weekly chart
Based on David's original decision to sell his position at 18.92, the action of the last week, your technical analysis, overall market correcting, and my gut feeling, I have decided to cut my losses in this stock an I am out at $18.76. I am a newbie in the stock market and I don't have the stomach to watch this drop anyone. Like others I believe in this company and will look to re-enter at a lower price. Good luck to everyone who decides to hold this (I wish I could).
Im adding here..call me crazy..but now is the time to buy, not sell.
Quote from: nicknite20 on June 12, 2007, 02:36:05 PM
Quote from: DragonAMG on June 12, 2007, 12:19:07 PM
Quote from: Terliso on June 12, 2007, 11:22:23 AM
Weekly MACD Bearish Cross, SILC is going for the support area possibly @ $16 or at $12 area.
-- price is now below 9sma weekly chart
Based on David's original decision to sell his position at 18.92, the action of the last week, your technical analysis, overall market correcting, and my gut feeling, I have decided to cut my losses in this stock an I am out at $18.76. I am a newbie in the stock market and I don't have the stomach to watch this drop anyone. Like others I believe in this company and will look to re-enter at a lower price. Good luck to everyone who decides to hold this (I wish I could).
Im adding here..call me crazy..but now is the time to buy, not sell.
I am adding here as well. awaiting announcement of the next design win and/or earnings run-up. If SILC had the same PE as RVBD we would be over 50.
Quote from: yukiii on June 12, 2007, 02:29:42 PM
Why $17.80, I show next support at $16.87
support and we probably close above 18.90 today ... If it closes above 18.90 today then 18.39 is the bottom if not then we'er going to my price 90%
No panic just wait for the rebound daytraders won't miss it ;D
http://stockcharts.com/h-sc/ui?s=SILC&p=D&b=5&g=0&id=p44425796901 (http://stockcharts.com/h-sc/ui?s=SILC&p=D&b=5&g=0&id=p44425796901)
QuoteI am adding here as well. awaiting announcement of the next design win and/or earnings run-up. If SILC had the same PE as RVBD we would be over 50.
I agree with you eggman11, SILC's earnings multiple should expand some more, the growth rate and fat net profit margin should allow it. Technically the stock broke down below the 50% Fibonacci retracement level, opening a small gap at the open, between $19.15 and $19.30.
I still see 2% dilution, 84% revenue CAGR, 25% net profit margin and 26.37 EPS multiple, and this will lead to a much higher share price over the long term. So, no reason to sell around current levels.
I'll keep holding SILC.
SILC trendline 2, stands tomorrow @ $17.72, hopefully it holds so we can all buy. ;)
Quote from: Garoh on June 12, 2007, 02:20:41 PM
Quote from: Garoh on June 10, 2007, 07:01:51 AM
Quote from: Garoh on June 07, 2007, 10:36:19 AM
I hope I'm wrong but this is what I see from a technical view :
I think this decline will end when we reach 17.70 to 17.90 :(
I could be wrong but I,ve seen it in other stocks before ...
There's someone keep selling all the way down .....Who ? >:(
I still have the same point of view :
I sold half of my position after I've seen the news about selling 130,000 shares and when it broke 22.88 and I still see the price I mentioned which is 17.70 to 17.90 maybe this week ..
that would be my entry price of not I will wait until It close above 21.50 and buy back ....
This is a great stock .. I Invest and in the same time I daytrading do I don't recommend to sell this stock as long as it a short time change ...
I still wish I'm wrong in my thoughts
We are very close to the target .....
The stock is oversold now and it should finish this drop at that price (17.70 to 17.90 )
I'm repeating this again and again and still wish it rebounds from these levels :)
David keep the good work
Thanks Terliso
This is the support which I've talking about since a week :)
We got a bit of a relief bounce in SILC, closing a small gap that was left open yesterday.
Technically the stock is still short term bearish, it would have to close back above $19.40 or so to become short term bullish.
Fundamentally SILC had $0.22 EPS in Q1 2007. I believe it is reasonable to expect at least $1 EPS in full year 2007, so the stock is trading at roughly 19 times forward earnings. Other stocks in the same space (WAN optimization market) trade at 76 times estimated 2007 earnings, like RVBD.
SILC should enjoy a multiple expansion and breakout to new all time highs.
I'll keep holding SILC for the long term.
It's showing some strenght even though a low volume .
Quote from: Garoh on June 14, 2007, 11:00:17 AM
It's showing some strenght even though a low volume .
Yes, the relief bounce continues.
I wrote the following comment over the previous update:
QuoteTechnically the stock is still short term bearish, it would have to close back above $19.40 or so to become short term bullish.
SILC did it, albeit just barely, closing at $19.55. I'm curious to know if the short term (and perhaps long term) low was made, that would be a valuable experience, because I had a trailing stop at a close below $18.9 (would have been stopped at $18.65), but instead I've opted to hold, despite the technical breakdown.
Fundamentally nothing changed, I'll keep holding SILC.
SILC's bounce continues, and the stock is now $1 above my original stop price. From the declining volume it doesn't look like the low was made, but that's really a poor way to forecast stock's movements.
One thing comes to my mind, the recent sell off from $24.3 to a low of $18.39 happened because an insider sold 130,000 of his 700,000 plus shares, and because an investment firm sold its entire position of 663,000 shares.
But Bjurman Barry & Associates, the firm that sold 663,000 of SILC's shares above $20, is no insider and also doesn't look like a long term investor in companies, take a look at their website:
http://www.bjurmanbarry.com/
They originally bought the position in December, 2006 (http://www.sec.gov/Archives/edgar/data/916793/000093511306000157/sc13g12.txt):
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=38014;image)
Awesome trade :o. But SILC was probably the best trade they made this year, because their microcap fund is underperforming the Russel 2000 Growth Index:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=38016;image)
... and certainly underperforming the Main Portfolio (http://www.3stocksonfire.org/3stocksonfire.php), which is currently up 17.2% year to date, compared to 4.5% for the Bjurman, Barry Micro-Cap Growth Fund.
So, should I sell just because they sell? Just because they manage more money they know more than I do? Obviously not.
I'll keep holding SILC.
Hi David,
Have a general question, not specific to SILC.
I dont see a sectoral split / allocation in ur portflio. Do you also try to identify certain sectors which will be expected to perform well in the next 3-6 months?
For example, if you expect energy will be hot over the next 3-6 months, do you try to allocate say 30% of your portfolio towards that sector?
Nick
Quote from: nicknite20 on June 16, 2007, 10:52:11 AM
Hi David,
Have a general question, not specific to SILC.
I dont see a sectoral split / allocation in ur portflio. Do you also try to identify certain sectors which will be expected to perform well in the next 3-6 months?
For example, if you expect energy will be hot over the next 3-6 months, do you try to allocate say 30% of your portfolio towards that sector?
Nick
Yes, that's what I have said before, 3SOF missed out on the energy and material boom also on
the Germany and Singapore run up. But I guess if you are long term 3 years your outlook is different..
Quote from: nicknite20 on June 16, 2007, 10:52:11 AM
Hi David,
Have a general question, not specific to SILC.
I dont see a sectoral split / allocation in ur portflio. Do you also try to identify certain sectors which will be expected to perform well in the next 3-6 months?
For example, if you expect energy will be hot over the next 3-6 months, do you try to allocate say 30% of your portfolio towards that sector?
Nick
No, I'm applying a specific, stock by stock approach. If you consider my valuation model you see that the 4th estimate, the EPS multiple estimate, always compares the individual company with its industry average.
If that sector is hot, or in high demand in the market at that particular moment in time, that will be reflected in my valuation model by an higher EPS multiple estimate.
QuoteYes, that's what I have said before, 3SOF missed out on the energy and material boom also on the Germany and Singapore run up. But I guess if you are long term 3 years your outlook is different..
The Main Portfolio now is a long only, US traded stocks. Not a macro fund. And it is up 17.5% year to date. Even though this isn't spectacular, there aren't many funds outthere that have achieved this.
SILC started well today, but couldn't hold the early morning gains. Nothing changed from a fundamental standpoint. I'll keep holding SILC.
SILC rose a bit over the late day trading yesterday. We've already seen that the recent decline was due to the selling of 663,000 shares by Bjurman, Barry & Associates, but that doesn't mean they know more than we do about SILC, since their micro-cap fund is up 5.08% year to date (http://www.bjurmanbarry.com/site/html/bmcfx.htm) while the Main Portfolio is returning 18.4%.
I'll keep holding SILC.
SILC is back to where it was a week ago. Nothing new from a fundamental standpoint. People selling now know that they're selling shares cheap, but they can't avoid it anyway. When the next positive press release comes out they'll buy again, but probably they'll pay a higher price.
I'll keep holding SILC.
Nothing new on SILC today, the stock is drifting lower on low volume. Fundamentally, SILC had 12 consecutive quarters of growing revenues, are you going to fight this trend?
If revenue continues to grow, and net profit margin expands a bit, SILC will naturally earn more than $1 per share this year. The Networking & Communication devices industry trades at 27 times earnings, so at least $27 price per share by the end of the year, no?
Longer term expect much more, we're at the early stages of the WAN optimization market growth.
I'll keep holding SILC despite the short term technical weakness.
Maybe get a bottom in SILC tomorrow. Will try to get back in around $18.60. SILC should start moving back up about a month before earnings come out.
Quote from: yukiii on June 22, 2007, 03:42:04 AM
Maybe get a bottom in SILC tomorrow. Will try to get back in around $18.60. SILC should start moving back up about a month before earnings come out.
We reached a bottom yesterday It's a good buy now ...
18.55 is very important or >:(
Quote from: Garoh on June 22, 2007, 07:48:56 AM
Quote from: yukiii on June 22, 2007, 03:42:04 AM
Maybe get a bottom in SILC tomorrow. Will try to get back in around $18.60. SILC should start moving back up about a month before earnings come out.
We reached a bottom yesterday It's a good buy now ...
18.55 is very important or >:(
Got back in today $18.65
Quote from: Garoh on June 22, 2007, 07:48:56 AM
Quote from: yukiii on June 22, 2007, 03:42:04 AM
Maybe get a bottom in SILC tomorrow. Will try to get back in around $18.60. SILC should start moving back up about a month before earnings come out.
We reached a bottom yesterday It's a good buy now ...
18.55 is very important or >:(
today's low 18.57 only 2 cents from my first order >:(
I'm in again at 18.72 got my half position again
We should've had a tall white candle today but the market didn't help it ...
David give us some fundemental facts to calm us down ;D
Quote from: Garoh on June 22, 2007, 04:47:40 PM
Quote from: Garoh on June 22, 2007, 07:48:56 AM
Quote from: yukiii on June 22, 2007, 03:42:04 AM
Maybe get a bottom in SILC tomorrow. Will try to get back in around $18.60. SILC should start moving back up about a month before earnings come out.
We reached a bottom yesterday It's a good buy now ...
18.55 is very important or >:(
today's low 18.57 only 2 cents from my first order >:(
I'm in again at 18.72 got my half position again
We should've had a tall white candle today but the market didn't help it ...
David give us some fundemental facts to calm us down ;D
My target on this is $24.00
Let's read the "giant" press release again:
• Giant Telecom Equipment Manufacturer Chooses Silicom Multi-Port Adapters for Its Security Appliances (http://biz.yahoo.com/bw/070514/20070514005607.html?.v=1)
Business Wire (Mon, May 14)
I especially like the following part:
«"We believe this Design Win, into which we have already delivered production products, will lead to additional orders on an ongoing basis. Just as important, it demonstrates market need for our high-performance multiport product lines - especially our 6-port models - and their potential, along with our BYPASS products, as a strong revenue driver in the years ahead."»
Still no analysts covering the stock.
Technically SILC doesn't seem willing to go much further down. It showed a bit of relative strength today.
I'll keep holding SILC.
???
What's wrong with this guy ??!!!!
Again he's selling more shares !!! >:(
SOURCE: Form 144
ISSUER: SILICOM LTD
SYMBOL: SILC
FILER: ZISAPEL YEHUDA
TITLE: Chairman of the Board
BROKER: CIBC WORLD MARKETS
RESTRICTED SHARES TO SELL: 100,000 DATE REGISTERED: 6/18/2007
APPROXIMATE DATE OF SALE: 6/6/2007
The Form 144 is filed with the Securities and Exchange Commission to
reflect the intention of any holder of restricted stock to sell those
shares. After the 144 is mailed to the S.E.C., the filer is permitted
to sell the shares, or any fraction of them, within 90 days.
Form 144 Data Source: The Washington Service
(
[email protected] or 301-913-5100)
(END) Dow Jones Newswires
06-22-07 2303ET
23:03 062207
Are you sure that's a new report Garoh? I don't see anything new at www.sec.gov for SILC (http://www.sec.gov/cgi-bin/browse-edgar?company=silicom&CIK=&filenum=&State=&SIC=&owner=include&action=getcompany).
Your post says Approximate date of sale: 6/6/2007
Anyway, who owns the shares doesn't change the value of the company.
Thanks Garoh!
Quote from: Garoh on June 25, 2007, 09:45:28 AM
What's wrong with this guy ??!!!!
Again he's selling more shares !!! >:(
SOURCE: Form 144
ISSUER: SILICOM LTD
SYMBOL: SILC
FILER: ZISAPEL YEHUDA
TITLE: Chairman of the Board
BROKER: CIBC WORLD MARKETS
RESTRICTED SHARES TO SELL: 100,000 DATE REGISTERED: 6/18/2007
APPROXIMATE DATE OF SALE: 6/6/2007
The Form 144 is filed with the Securities and Exchange Commission to
reflect the intention of any holder of restricted stock to sell those
shares. After the 144 is mailed to the S.E.C., the filer is permitted
to sell the shares, or any fraction of them, within 90 days.
Form 144 Data Source: The Washington Service
([email protected] or 301-913-5100)
(END) Dow Jones Newswires
06-22-07 2303ET
23:03 062207
Yes David
it says DATE REGISTERED: 6/18/2007 ...
Thisnew came out on friday after market closed
QuoteYes David
it says DATE REGISTERED: 6/18/2007 ...
Thisnew came out on friday after market closed
Thanks Garoh.
Everybody is selling SILC because everybody is selling SILC. First earnings were a bit below what could be expected from the historical growth rate. Second a significant private placement. Then insiders sold shares. Then an institutional sold 663,000 shares. And now this insider selling 100,000 more.
People looking at this can only press the sell button. I've seen a 100% profit turn into a 38% profit >:(
My fault and responsibility, of course. I can't and I won't blame the market for this, I was the one that choose this "long term investment strategy path".
And what about that 70% drawdown, when SILC came off from $12 to below $4? That was really something, I was afraid something like that could happen, but wanted my hands to be strong.
It is pretty clear now that most people expect Q2 2007 to be weak, as Q2 2006 was. There are just 5 days for the quarter to be over ... I should have been more alert to that "giant" word on the press release.
I have two options now:
1) Consider that fundamentals are still on track and that the company will make at least $0.88 EPS in 2007 (that would mean no growth from the $0.22 it achieved in Q1 2007). Forward EPS multiple is 19.8, below the industry average of 27. But of course, there are risks. The major risk is if server makers think they should make in house products similar to SILC's, instead of buying them. SILC suffered from a similar trend in the past.
2) Take my 38% or so profit, learn my lesson and move on. The lesson being "if you see that a stock will go down, even if that seems to be for temporary reasons, take your profit. Re-valuate later".
If I were alone, managing my own diversified portfolio, not thinking of everything I said and wrote in the past, what would I do now? If I didn't have an ego, what would I do now?
I would kneel down in respect for the market and take my 38% or so profit.
Unfortunately that's the trading plan. I say unfortunately because I really wished things to turn out differently, so I could make a point about investment strategies. But the market has been ruthless every time I try to make a point.
Too bad >:(
I expected this one to stop at 17.70 two weeks ago but today before the market open I so a very bad sign which showed a 17.55 target BUT didn't expect this drop :-\
I saw these movements many time especially with Israeli company !!
I see ugly chart on both weekly and daily ....we could see a temprorily rebound after the stock is oversold now ....
David which option would you choose ?
pff, why do I always choose the wrong ones, originally bought SILC around 21$ and also CIMT around 3.65$ :( >:(
I'm starting to believe that this fundamental strategy is not my cup of tea ... :-\
QuoteDavid which option would you choose ?
It's pretty clear that he is going to take his 38% and more on.
Quote from: Se7en on June 25, 2007, 05:14:55 PM
pff, why do I always choose the wrong ones, originally bought SILC around 21$ and also CIMT around 3.65$ :( >:(
I'm starting to believe that this funda
I did the same... bought SILC around 21. I don't think you have to worry about CIMT though.
Quote from: Se7en on June 25, 2007, 05:14:55 PM
pff, why do I always choose the wrong ones, originally bought SILC around 21$ and also CIMT around 3.65$ :( >:(
I'm starting to believe that this fundamental strategy is not my cup of tea ... :-\
Anyone that bought the "fire" portfolio within the last couple months or so would be red all around. Bleh, such is the market.
I bought SILC over $21! :P
Will the stock rebound a little in the future? Maybe I will hold to see if it will go up a little, to soften the loss?
Let's hope that their 2nd new design win this quarter comes quick ... ::)
Hey Guys,
Sounds like you may hold for a little while?
yukiii will let go before we do, because he got in lower.
this thing looks like it is headed back to $12 and relatively quick. :(
Quote from: DragonAMG on June 25, 2007, 08:10:51 PM
this thing looks like it is headed back to $12 and relatively quick. :(
Quote from: Se7en on June 25, 2007, 05:14:55 PM
pff, why do I always choose the wrong ones, originally bought SILC around 21$ and also CIMT around 3.65$ :( >:(
I'm starting to believe that this fundamental strategy is not my cup of tea ... :-\
a stock is just good when it goes up...even when fundamentals are good. So fundamentals with strict technical use..is the key...i enter and have always a mental stop....and then i sell.
I rebought at $ 21,80 >:( >:( >:( After selling at $ 22,77
Previous win became smaller now by 20%, big bummer. It's all in the game. Technical signs were there, long term vision was different.
Amarens
Quote from: Amarens on June 26, 2007, 06:39:50 AM
I rebought at $ 21,80 >:( >:( >:( After selling at $ 22,77
Previous win became smaller now by 20%, big bummer. It's all in the game. Technical signs were there, long term vision was different.
Amarens
yes never fall in love with a stock....in this thread was much time wasted about the company....group dynamic that can be dangerous....keep it simple less talk acting more strict...and save time...sell and move to the next one. If it would be really long term investments then we dont need to analyse the chart every second day or ? thats a bit the strange thing to me...
Quote from: ket1390 on June 06, 2007, 11:18:02 AM
Quote from: yukiii on June 06, 2007, 11:11:42 AM
Bought somemore here 20.45
why buying more? people should never average down what if we see 19 tomorrow?and and and....if we close under the MA50 this could be a good short.....especially now if a possible corrections starts....interests concerning...i will short it under 20 with target of 12
not always the majority wins! i am sticking to my plans >:D
QuoteIf it would be really long term investments then we dont need to analyse the chart every second day or ? thats a bit the strange thing to me...
The website needs new content everyday, and when there's nothing new to say on the fundamental side, I write about the chart. What else?
Let me try to explain SILC's selling decision better, or differently.
If one goes back on this thread, and other threads where we've talked about SILC, at some point I said SILC could be a 10 bagger. But after studying some more, I said it could be a 2 to 3 bagger, but hardly a 10 bagger, because it was roughly a one product company, a product that could become obsolete.
SILC gave 1 bag to the people that bought around $12, and then started trading sideways. Several negative fundamental developments were out, but the stock held roughly between $19 and $24, right? buddjas1 and others wrote that around $19 we would be at rock bottom prices, and I agreed, that's why I took my stop out, because I was afraid I could be shaken out not by a decisive sell signal, but because of whipsawed market action.
But yesterday the market proved the $18.5 - $19.5 bulls wrong.
I guess the market knows something, either some key costumers will start producing their server connection needs in house, or else sales this quarter will disappoint and the company will post a slim profit, like it happened in Q2 2006. The stock started falling in April and the bad news was out only in August. Between the two months there was a 70% fall.
I don't know how it feels like having a 100% profit and watch it go away completely and I don't want to find out.
For you people that bought at $21, may I remind you that your entry point shouldn't be a factor in your trading decisions, because the market simply doesn't care, it doesn't even know. We're talking about a 20% loss which for a diversified portfolio shouldn't cause much damage to the overall portfolio performance. For example, the Main Portfolio took 20 losses of more than 20% and that didn't prevent it from being up 297% since inception. In fact, I believe that helped because most of those stocks kept going down.
Anyway, do as you wish. For my part I wish I had sold SILC at that gap up after Q1 results, because the stock was about to go down. I didn't think it would go down this much though, but since then things changed to the worse. But what I could have done doesn't count, it's all perfect trades at the "if" section. What matters are the facts.
And the fact is I'm about to take a 38% profit, which is a lot less than I expected, but not bad. I need to improve on managing expectations.
Just a few words for realcoolhead: "I hope you understand this decision, the market clearly proved me wrong and there are significant risks. As I'll keep working to find attractive picks, I expect the Main to deliver 30%-40% return this year, which is in line with our long term goals. Thanks for your support!"
Thanks for your support too, good luck :)
Quotedavid randolph:
For you people that bought at $21, may I remind you that your entry point shouldn't be a factor in your trading decisions, because the market simply doesn't care, it doesn't even know. We're talking about a 20% loss which for a diversified portfolio shouldn't cause much damage to the overall portfolio performance. For example, the Main Portfolio took 20 losses of more than 20% and that didn't prevent it from being up 297% since inception. In fact, I believe that helped because most of those stocks kept going down.
i strongly dissagree the entry point is more than 50% of a good trade....it doesnt matter if the market cares or not.....if you buy for example on breakouts and sell if it doesnt happen....you never have 20% losses....the right entry technically is very important as we saw here with silc up from 4 to 21 in few months. Then an entry at 21 has to be tied with tight stops as the stock already was up serveral 100 percent.
Not everybody has the funds to diversify their portfolio like 3SOF, so a 20% drop can hurt, it does for me ... :(
some sentences that are burned in my brain while trading: >:D
the first loss it the best loss
buy just stocks that go the right direction (like momentum)
is volume there easier to exit if something wrong
where is my stop / target
what do i buy next or sell next ?
protect my capital
i appreciate it to trade every day...it s a pleasure
which sector is hot ?
what could happen overnight with the stock (for ex. china stock)
risk/reward here?
....
Thanks David
I am out of all SILC now.
If there was one of your picks that you would recommend to recoup losses, what would it be?
There are a lot of pics of yours (on video too!) that I just haven't been able to get in to.
Thanks and Best
GMan
Quote from: Garoh on June 25, 2007, 04:57:25 PM
Too bad >:(
I expected this one to stop at 17.70 two weeks ago but today before the market open I so a very bad sign which showed a 17.55 target BUT didn't expect this drop :-\
I saw these movements many time especially with Israeli company !!
I see ugly chart on both weekly and daily ....we could see a temprorily rebound after the stock is oversold now ....
David which option would you choose ?
It's oversold now .. I think it's not the time to sell now maybe higher ..
Quote from: David Randolph on June 26, 2007, 07:20:49 AM
buddjas1 and others wrote that around $19 we would be at rock bottom prices, and I agreed, that's why I took my stop out, because I was afraid I could be shaken out not by a decisive sell signal, but because of whipsawed market action.
But yesterday the market proved the $18.5 - $19.5 bulls wrong.
Actually, I recommended selling at $25 after earnings release. I thought that selling at $19 or whatever was the wrong move (but I never said that $19 was "rock bottom"). I still view SILC as one of your best long term investments and there is no sense selling at $17, when you still have 35% left (strong hands). Today's sell was the wrong move and a year from now (or two) you will regret it.
Quote from: buddjas1 on June 26, 2007, 10:13:22 AM
Quote from: David Randolph on June 26, 2007, 07:20:49 AM
buddjas1 and others wrote that around $19 we would be at rock bottom prices, and I agreed, that's why I took my stop out, because I was afraid I could be shaken out not by a decisive sell signal, but because of whipsawed market action.
But yesterday the market proved the $18.5 - $19.5 bulls wrong.
Actually, I recommended selling at $25 after earnings release. I thought that selling at $19 or whatever was the wrong move (but I never said that $19 was "rock bottom"). I still view SILC as one of your best long term investments and there is no sense selling at $17, when you still have 35% left (strong hands). Today's sell was the wrong move and a year from now (or two) you will regret it.
Seems like we had this conversation before, buddjas1 I think we both recommended selling at $25.
I also said
NTES
EXM
ROY
TZOO
were bad choices along with PAL JAKK and GW, but anyways live and learn I guess.
Hopefully we can move on from this and make some changes to way we select stocks for the portfolio
and timing.
1. don't fall in love with a company.
2. take your money and run to come back another day.
3. portfolio needs to be more diversified.
4. Don't keep picking stocks at there highs like GW PAL TZOO ROY EXM after the news is out unless they have a valid reason to keep going up like EMC, GOOGLE, APPLE, RIG, DO
5. Don't rely on a model to pick stocks or a system, each company is a different situation.
Hope this help some as I keep repeating myself.
Back to trading...........................
Buying CTGX a good growing small cap.
a smallcap leader in one of
my favorite markets...IT services. Unlike many, CTGX survived the IT
bloodbath following the busted dot-com bubble and is on the verge of
making a next-level leap due to their highly focused strategy of serving
in-demand niche markets. The best part? Global healthcare IT trends and
government initiatives are creating opportunities that play directly to
the company's experience and expertise. CTGX survived the demand
declines, in part, by providing low margin IT staffing while their IT
solutions business suffered. Now the company has a plan in place to
regain a balanced 50/50% revenue mix between IT staffing and IT
solutions revenue and it seems to be working. Between the U.S., U.K. and
EU, CTGX is on the verge of layering in several higher margin business
opportunities that should elevate profit margins back to respectable
levels and create earnings growth that shareholders haven't seen in
years. The many opportunities on the horizon provide a significant
upside while the 5-year trading base and core business provides the
downside support.
Buying SPIL on the dip today. should resume upwards tomorrow.
Quote from: yukiii on June 26, 2007, 12:25:30 PM
Quote from: buddjas1 on June 26, 2007, 10:13:22 AM
Quote from: David Randolph on June 26, 2007, 07:20:49 AM
buddjas1 and others wrote that around $19 we would be at rock bottom prices, and I agreed, that's why I took my stop out, because I was afraid I could be shaken out not by a decisive sell signal, but because of whipsawed market action.
But yesterday the market proved the $18.5 - $19.5 bulls wrong.
Actually, I recommended selling at $25 after earnings release. I thought that selling at $19 or whatever was the wrong move (but I never said that $19 was "rock bottom"). I still view SILC as one of your best long term investments and there is no sense selling at $17, when you still have 35% left (strong hands). Today's sell was the wrong move and a year from now (or two) you will regret it.
Seems like we had this conversation before, buddjas1 I think we both recommended selling at $25.
I also said
NTES
EXM
ROY
TZOO
were bad choices along with PAL JAKK and GW, but anyways live and learn I guess.
Hopefully we can move on from this and make some changes to way we select stocks for the portfolio
and timing.
1. don't fall in love with a company.
2. take your money and run to come back another day.
3. portfolio needs to be more diversified.
4. Don't keep picking stocks at there highs like GW PAL TZOO ROY EXM after the news is out unless they have a valid reason to keep going up like EMC, GOOGLE, APPLE, RIG, DO
5. Don't rely on a model to pick stocks or a system, each company is a different situation.
Hope this help some as I keep repeating myself.
Back to trading...........................
Buying CTGX a good growing small cap.
a smallcap leader in one of
my favorite markets...IT services. Unlike many, CTGX survived the IT
bloodbath following the busted dot-com bubble and is on the verge of
making a next-level leap due to their highly focused strategy of serving
in-demand niche markets. The best part? Global healthcare IT trends and
government initiatives are creating opportunities that play directly to
the company's experience and expertise. CTGX survived the demand
declines, in part, by providing low margin IT staffing while their IT
solutions business suffered. Now the company has a plan in place to
regain a balanced 50/50% revenue mix between IT staffing and IT
solutions revenue and it seems to be working. Between the U.S., U.K. and
EU, CTGX is on the verge of layering in several higher margin business
opportunities that should elevate profit margins back to respectable
levels and create earnings growth that shareholders haven't seen in
years. The many opportunities on the horizon provide a significant
upside while the 5-year trading base and core business provides the
downside support.
Buying SPIL on the dip today. should resume upwards tomorrow.
Very nice pick Yukiii
Yukii,
Your last post on the SILC board was bullish (June 22) you said your target on SILC is $24 - based on your shares you recently bought earlier at the mid $18s. Does the following mean you changed your mind and sold it?
David and Everyone,
I am currently holding to SILC, I still believe that with 12 straight quarters of revenue growth, the private placement placement at $20.50 (to investors who probably received a lot more information thean we did), An insider Mark Sussman purchased 60,000 shares between 19-21 in April on top of buying over 90,000 shares earlier in the month of april in the 13 range. I believe this is one of those major pullbacks that multibaggers have from time to time.
Quote from: yukiii on June 26, 2007, 12:25:30 PM
Quote from: buddjas1 on June 26, 2007, 10:13:22 AM
Quote from: David Randolph on June 26, 2007, 07:20:49 AM
buddjas1 and others wrote that around $19 we would be at rock bottom prices, and I agreed, that's why I took my stop out, because I was afraid I could be shaken out not by a decisive sell signal, but because of whipsawed market action.
But yesterday the market proved the $18.5 - $19.5 bulls wrong.
Actually, I recommended selling at $25 after earnings release. I thought that selling at $19 or whatever was the wrong move (but I never said that $19 was "rock bottom"). I still view SILC as one of your best long term investments and there is no sense selling at $17, when you still have 35% left (strong hands). Today's sell was the wrong move and a year from now (or two) you will regret it.
Seems like we had this conversation before, buddjas1 I think we both recommended selling at $25.
I also said
NTES
EXM
ROY
TZOO
were bad choices along with PAL JAKK and GW, but anyways live and learn I guess.
Hopefully we can move on from this and make some changes to way we select stocks for the portfolio
and timing.
1. don't fall in love with a company.
2. take your money and run to come back another day.
3. portfolio needs to be more diversified.
4. Don't keep picking stocks at there highs like GW PAL TZOO ROY EXM after the news is out unless they have a valid reason to keep going up like EMC, GOOGLE, APPLE, RIG, DO
5. Don't rely on a model to pick stocks or a system, each company is a different situation.
Hope this help some as I keep repeating myself.
Back to trading...........................
Buying CTGX a good growing small cap.
a smallcap leader in one of
my favorite markets...IT services. Unlike many, CTGX survived the IT
bloodbath following the busted dot-com bubble and is on the verge of
making a next-level leap due to their highly focused strategy of serving
in-demand niche markets. The best part? Global healthcare IT trends and
government initiatives are creating opportunities that play directly to
the company's experience and expertise. CTGX survived the demand
declines, in part, by providing low margin IT staffing while their IT
solutions business suffered. Now the company has a plan in place to
regain a balanced 50/50% revenue mix between IT staffing and IT
solutions revenue and it seems to be working. Between the U.S., U.K. and
EU, CTGX is on the verge of layering in several higher margin business
opportunities that should elevate profit margins back to respectable
levels and create earnings growth that shareholders haven't seen in
years. The many opportunities on the horizon provide a significant
upside while the 5-year trading base and core business provides the
downside support.
Buying SPIL on the dip today. should resume upwards tomorrow.
Quote from: eggman11 on June 26, 2007, 02:35:54 PM
Yukii,
Your last post on the SILC board was bullish (June 22) you said your target on SILC is $24 - based on your shares you recently bought earlier at the mid $18s. Does the following mean you changed your mind and sold it?
David and Everyone,
I am currently holding to SILC, I still believe that with 12 straight quarters of revenue growth, the private placement placement at $20.50 (to investors who probably received a lot more information thean we did), An insider Mark Sussman purchased 60,000 shares between 19-21 in April on top of buying over 90,000 shares earlier in the month of april in the 13 range. I believe this is one of those major pullbacks that multibaggers have from time to time.
I bought and sold SILC like 5 times, my last purchase was recently at $18.65 will buy more if it goes below $17.00
yukii
2 more stocks to watch NSTC Ness Tech.
GUID Guidance Software
I sold this am at 17.43.
I am like Se7en. I pick 3 or 4 stocks, because that is all I can afford.
I picked from the Fire portfolio and then one from main.
I have SILC (sold today), CIMT, GIGM, and TZOO (bought on down slide after David sold, entry 29.31).
It was good for me to sell SILC.
I hope SILC recovers for everyone holding.
My Best to everyone.
Quote from: yukiii on June 26, 2007, 02:44:52 PM
Quote from: eggman11 on June 26, 2007, 02:35:54 PM
Yukii,
Your last post on the SILC board was bullish (June 22) you said your target on SILC is $24 - based on your shares you recently bought earlier at the mid $18s. Does the following mean you changed your mind and sold it?
David and Everyone,
I am currently holding to SILC, I still believe that with 12 straight quarters of revenue growth, the private placement placement at $20.50 (to investors who probably received a lot more information thean we did), An insider Mark Sussman purchased 60,000 shares between 19-21 in April on top of buying over 90,000 shares earlier in the month of april in the 13 range. I believe this is one of those major pullbacks that multibaggers have from time to time.
I bought and sold SILC like 5 times, my last purchase was recently at $18.65 will buy more if it goes below $17.00
yukii
2 more stocks to watch NSTC Ness Tech.
GUID Guidance Software
Yukki is averaging down...good luck...(for me this is very amateur trading...where is the bottom?...no knows for sure..sorry) why not buy the bounce? average down means no safety for sure. Never fall in love with comany average up and sell the breakdown.
Quote from: ket1390 on June 26, 2007, 04:17:56 PM
Quote from: yukiii on June 26, 2007, 02:44:52 PM
Quote from: eggman11 on June 26, 2007, 02:35:54 PM
Yukii,
Your last post on the SILC board was bullish (June 22) you said your target on SILC is $24 - based on your shares you recently bought earlier at the mid $18s. Does the following mean you changed your mind and sold it?
David and Everyone,
I am currently holding to SILC, I still believe that with 12 straight quarters of revenue growth, the private placement placement at $20.50 (to investors who probably received a lot more information thean we did), An insider Mark Sussman purchased 60,000 shares between 19-21 in April on top of buying over 90,000 shares earlier in the month of april in the 13 range. I believe this is one of those major pullbacks that multibaggers have from time to time.
I bought and sold SILC like 5 times, my last purchase was recently at $18.65 will buy more if it goes below $17.00
yukii
2 more stocks to watch NSTC Ness Tech.
GUID Guidance Software
Yukki is averaging down...good luck...(for me this is very amateur trading...where is the bottom?...no knows for sure..sorry) why not buy the bounce? average down means no safety for sure. Never fall in love with comany average up and sell the breakdown.
Well I have been in SILC since $4.00 so I think I know what I am doing. What ever works for you bro...... There are all different ways to trade a stock, the main thing is not to take big losses. I like
buying bottoms or close to the bottom. If you buy the bounce and sell the breakdown you will probable not do very well in the longterm.
David, I understand your decision. No one said you should hold a stock forever.
However I have two general concerns after following your portfolio for over half a year. One is about your exit strategy. You seem to be overly optimistic about these small-cap stocks. You choose industry average P/E to gauge an optimal selling point, but these small-cap stocks rarely command high P/E enjoyed by big players. Also stocks outside USA usually trade at discount because of perceived additional risk. Moreover, so far I still don't understand how Yahoo calculates that industry average P/E you rely on, as they sometimes fluctuate more than 10% week over week. Do I have an answer, no. That's why I didn't say this earlier. I know it is a tough job. My hope is that you will apply your experience and maybe your instinct to a certain degree in deciding when to sell. Now this may sound strange from my mouth because I have always been promoting consistency yet instinct is rarely consistent ... But think about where your strength lies after being in the market for over 10 years? How much edge do you have over other people in analyzing company fundamentals? With your due-diligence you are advantageous over other "lazy" people, but you have no way to beat those insiders. Unfortunately the smaller a company is, the greater those insiders can manipulate or at least influence the stock price. It is always somewhat a gamble investing in those small-caps, especially micro-caps.
The other concern is about diversification. Right now you are running a concentrated portolfio with a huge beta. I undertand that in order to achieve bigger return one has to accept greater risk. But there is an optimal point and portfolio theory says it should be around 30 or so across all the main sectors. It is certainly exciting to grow portfolio 2-3% everyday, but it is also gut-wrenching to see your portfolio swing both sides like a yoyo ... and over the long-run a smoother ride has a much more staying power. I always find it puzzling when people say "I don't have enough money to buy many stocks". With commission so low to day, like at interactivebrokers.com each trade is just a buck or two, is this the real issue? I think the hidden message when people say that is "I want gambling for exceptional returns! I don't like 20% each year, that's lame!" There is a certain amount of insincerity here. To this end, I think that Fire Portfolio is meaningless, not only the performance is almost the same as main portfolio now, it allures some people to think striking gold is possible. So what do people do with a couple of thousand dollars and think making 20% each year is boring? Work to earn more! Work for a couple of months and save up to, say, $20K. How hard is that? Then you will see what 20% return each year can bring you: you got close to $5 million over 30 years ... What if David "keeps his words" ;) and presents you with 30% each year instead of 20%? Well, you will get almost $5 million just in 12 years! (well, I ignored the tax you will have to pay but you get the message ...) I bet if everyone here is looking for a "mere" 20%-30% return each year. People won't be so stressed and David can be more at ease too.
So in summary, what I want to say is: let's work on a better exit strategy, have a more diversified portfolio and people, lower your unrealistic expectation!
Quote from: David Randolph on June 26, 2007, 07:20:49 AM
Just a few words for realcoolhead: "I hope you understand this decision, the market clearly proved me wrong and there are significant risks. As I'll keep working to find attractive picks, I expect the Main to deliver 30%-40% return this year, which is in line with our long term goals. Thanks for your support!"
20%/year, that's something like 1,66666666666667%/month, I'm sorry but you don't have to be a technical or fundamental analysis guru to achieve this! ::)
And not everyone can use these foreign brokers or is not willing to do it because of the lack of visibility, there's no office of one these foreign brokers in my country, I'd rather pay some extra money for a broker where I can address myself too in my own language or that is based in my country!
Also, not everyone has a starting capital of 30,40,50k $ so people need to choose between the picks, I don't even own half of them, maximum 2 or 3 and I bet I'm not the only one here but what if you pick the 2-3 'bad' ones most of the time...
I prefer a combination of fundamental/technical analysis because you can't exclude one imo. How many % was the 3SOF portfolio up before the 'new path' was chosen, I believe it was a few 100's in a couple of years time, that also proves a lot imo ...
This is all my opinion and I know how much work David is putting into this and I appreciate that very much but I don't think it's working out for me, maybe I'm not 'made' for investing in stocks or have the right attitude but it's also not good when Im' feeling not comfortable with it.
Btw, sold my SILC at 17.40$ today ...
So, I guess you are outside US?
Tell you what, if you can REALLY get 20% per year consistently, come to New York. Guys on Wall Street will pay you millions of cool salary per year to hire you :D ;D
Quote from: Se7en on June 26, 2007, 05:40:21 PM
20%/year, that's something like 1,66666666666667%/month, I'm sorry but you don't have to be a technical or fundamental analysis guru to achieve this! ::)
Quote from: realcoolhead on June 26, 2007, 05:47:25 PM
So, I guess you are outside US?
Tell you what, if you can REALLY get 20% per year consistently, come to New York. Guys on Wall Street will pay you millions of cool salary per year to hire you :D ;D
Quote from: Se7en on June 26, 2007, 05:40:21 PM
20%/year, that's something like 1,66666666666667%/month, I'm sorry but you don't have to be a technical or fundamental analysis guru to achieve this! ::)
Outside US yes, Belgium (Europe), I'm online trading through my bank, around 30$/trade now ...
You know what I'm saying, it would require more risk (not diversifying so much) and with a combination of technical/fundamental analysis it's possible IMO!
The 3SOF portfolio was up over 200% in about 1,5 year if I'm not mistaking, so let's send David to Wall Street ... :)
Quote from: yukiii on June 26, 2007, 06:00:14 PM
Quote from: Se7en on June 26, 2007, 05:55:42 PM
Quote from: realcoolhead on June 26, 2007, 05:47:25 PM
So, I guess you are outside US?
Tell you what, if you can REALLY get 20% per year consistently, come to New York. Guys on Wall Street will pay you millions of cool salary per year to hire you :D ;D
Quote from: Se7en on June 26, 2007, 05:40:21 PM
20%/year, that's something like 1,66666666666667%/month, I'm sorry but you don't have to be a technical or fundamental analysis guru to achieve this! ::)
Outside US yes, Belgium (Europe), I'm online trading through my bank, around 30$/trade now ...
You know what I'm saying, it would require more risk (not diversifying so much) and with a combination of technical/fundamental analysis it's possible IMO!
The 3SOF portfolio was up over 200% in about 1,5 year if I'm not mistaking, so let's send David to Wall Street ... :)
Its up because of a few penny trades in 2005 heres one ex:
AMRE.OB
6.66%
0.016
20-05-2005
0.21
24-05-2005
1212.50%
Yep, but it was only 6,66% of the portfolio, I think the porfolio still would have been up a lot without that trade, no?!
The 3 Stocks on Fire portfolio was also up +50% (around 80% if I'm not mistaking)in a few months time, if you take that money away and sit back for the rest of the year, that's nice!
It only proves that it's possible to make more than 20%/year with a different approach and I'm not saying it isn't possible with only fundamental analysis, I just have more problems with it as I am clearly picking the wrong ones... ::)
Quote from: Terliso on June 12, 2007, 11:22:23 AM
Weekly MACD Bearish Cross, SILC is going for the support area possibly @ $16 or at $12 area.
-- price is now below 9sma weekly chart
This stock is already a sell couple weeks ago.
If you really love this stock come back at the support area.
Quote from: Se7en on June 26, 2007, 05:55:42 PM
Quote from: realcoolhead on June 26, 2007, 05:47:25 PM
So, I guess you are outside US?
Tell you what, if you can REALLY get 20% per year consistently, come to New York. Guys on Wall Street will pay you millions of cool salary per year to hire you :D ;D
Quote from: Se7en on June 26, 2007, 05:40:21 PM
20%/year, that's something like 1,66666666666667%/month, I'm sorry but you don't have to be a technical or fundamental analysis guru to achieve this! ::)
Outside US yes, Belgium (Europe), I'm online trading through my bank, around 30$/trade now ...
You know what I'm saying, it would require more risk (not diversifying so much) and with a combination of technical/fundamental analysis it's possible IMO!
The 3SOF portfolio was up over 200% in about 1,5 year if I'm not mistaking, so let's send David to Wall Street ... :)
to work good at wallstreet you need at least 30 000.- $......choose a big american broker like ameritrade courtage is 9.99$. or a cheaper one but i am satisfied with them. And when i take my gains they send them right away to my account in switzerland (1day). ;D
If you just have 2-3 stocks (each 3333.-) in the portfolio the mental pressure to hold gets higher if you just have 10000.- workcapital for example......pressure like they have to go up is there. But if you buy each for 4000.- for ex. 3x 4000.- = 12000.- so you still have 18 000.- cash to look for another buy opportunities. In the background you let 3-5 stocks grow....with the remaining 10000-15000.- you can daytrade...there are every day golden opportunites to jump on...so it doesnt get boring.
This stock is going to $19 ;D
^Going Up^ ;D
SILC will test 25 again before earnings release.
The 10-day moving average is current at $18.88, if we can close above that with decent volume we could be looking at a reversal.
Looking good today, back to where I bought it, should go up to earnings.
Today it touched an upward trend it used to be a support before at 18.84 ...
Now it's a resistance and it's going up 8 cents everyday , we should close above it to resume the upward trend ;)
So much for that resistance. Opened at 19.55 :o
I hope it sticks
20.10! ;D
Anybody know what's the deal? This is clearly more than a retracement.
Silc started at BUY WR Hambrecht ;D
Still holding with strong hands :) Added more in low 18s..
Now my 2nd biggest holding after GIGM.
We will surely see a run up into the earnings..
Quote from: danman3459 on June 28, 2007, 11:44:54 AM
20.10! ;D
Anybody know what's the deal? This is clearly more than a retracement.
The deal is that it is undervalued; the last of the weak hands were shaken out and now it's time to go up.
Hey guys that is great!
Wish I had held and not taken a big fat stupid loss!! >:( that totally stinks. something to be said about technical stuff. >:(
Quote from: Garoh on June 28, 2007, 11:59:46 AM
Silc started at BUY WR Hambrecht ;D
;)
SILC: WR Hambrecht Starts @ Buy; Sets Tgt @ $25; Analyst Notes
Thursday , June 28, 2007 07:52ET
Issuer: Silicom Ltd (NasdaqSC: SILC)
Analyst Firm: WR Hambrecht
Ratings Action: INITIATE
Current Rating: Buy
Target Price Action: INITIATE
Target Price: $25.00Analyst Comments: Silicom is a provider of high-end server networking cards that improve connectivity for servers and add functionality to wide-area data services (WDS), security and other network appliances. The firm believes Silicom will be a beneficiary of the significant growth in key areas of the networking and data infrastructure markets, specifically the wide-area data services market. Although the market is competitive, they believe Silicom has set itself apart through its differentiated product portfolio. The firm's $25 price target on SILC shares is based on 24x their 2008 EPS estimate of $1.05, representing a PEG ratio of 1.
best regards
Oliver
Distribution still stronger than accumulation. Other than that, SILC still trading down the channel and below 50sma.
Quote from: Houlahan on June 28, 2007, 02:03:11 PM
Hey guys that is great!
Wish I had held and not taken a big fat stupid loss!! >:( that totally stinks. something to be said about technical stuff. >:(
Houlahan Look at this reply Reply #187 on: 07 June 2007, 17:36:19
this was 3 weeks ago when the stock was trading around $22 and the stock went a bit lower than my price ..
This is a stock market :)
Yep, I remember reading that post Gorah. It dipped just below the $17.70 price but not by much. Good call!
up till earnings yeah
WR Hambrecht initiates coverage of Silicom: The share rose on the news and recommendation.
Sunday , July 01, 2007 16:57ET
Shiri Habib
Jul 01, 2007 (Globes - McClatchy-Tribune Information Services via COMTEX) -- WR Hambrecht has initiated coverage of server networking card maker Silicom Ltd. (Nasdaq:SILC; TASE:SILC) with a "Buy" recommendation and $25 target. WR Hambrecht is the only investment house covering the company at present.
Silicom rose 8 percent on the news, narrowing the target premium to 24 percent. Silicom has a market cap of $108 million, after rising 117 percent since January.
WR Hambrecht analyst Ryan Hutchinson says, "We expect to Silicom experience accelerated as the adoption of wide-area data services (WDS) continues. As each WDS appliance should have one to three bypass server adapter cards installed, we expect to see an up-tick in Silicom's business as it sells incremental product to its WDS customers."
Trading at 21.02 in premarket. Anybody see news? For some reason ETrade is really slow on the news for SILC.
I haven't seen any news there. Still holding.
Quote from: danman3459 on July 09, 2007, 08:02:58 AM
Trading at 21.02 in premarket. Anybody see news? For some reason ETrade is really slow on the news for SILC.
There are two possible reasons for the rise in SILC today
1)They just announced that earnings will be released on July 23, which some few a positive, some people believe that a monday mornings earnings release is signal that earnings will be good, as opposed to later in the week.
2) according to the Yahoo boards (I don't know if its true), WR Hambrecht said on Friday after the close that they reiterate their buy on SILC and that SILC will report slightly above estimates.
Anyone else still holding SILC? It is on the verge of breaking the downtrend. I like the chart right now. Fundamentals, we all know, are excellent. I don't think the private placement need be worried about. Quickly growing co.
I think a lot of TA people could come in and buy on a break of the downtrend. Quick run to new highs quite possible, imo of course... Once we clear 23ish, its off to the races, and we're only 2 points away. A break of this downtrend and a little short squeeze could easily give us 2, 3, 4 points...
Hey bjc,
I am still in SILC and holding on. It has crossed over its 50-day moving average and it turning bullish, plus after the latest earnings report it has a very good chance to move into the IBD top 100 list, which will give it more exposure.
Nice eggman...good day today so far. That really strange activity that weve been seeing where the bid and the ask stay static for 2 or 3 hours..or maybe it just seemed like that long. I don't know what to make of it, but it usually results in some bullish activity.
We retested 21 twice after rising above it and now we made a run to 21.50. That downtrend line is so close...we're currently trading at 21.42.
All technical indicators I use look good.
Go SILC, GO!! I want to see $30 by the end of Summer the latest! ;D
I am still in SILC. Been in Australia and the outback for 2 months w/little to no internet service. Even when I had it, hard to catch US trading time.
Trying to play catchup now that I'm back home.
SILC has closed at the top of the day, marking the downtrend resistance line. All it needs now is to break it up close up there. The volume is above average today. Good thing.
Beautiful chart right now. We all know the fundamentals from David's excellent work.
I think SILC will agian be a huge home run. Anticipating the earnings very much. Unless something in the ER changes my mind, I hold SILC til the $30 or $35 mark.
Short term, I could see the price fluctuating between the downtrend line and the 50 ma, setting up for a huge bo. This downtrend line I speak of, the way I have it drawn, stands at about $22 Monday dropping about $0.10 a day.
Since we don't have a daily coverage on SILC anymore, I placed a stop loss sell order at $20. If it shall break down below that uptrend support line and exit the triangle at it's tip to the south, I'll bail out. Otherwise, I'll wait for the ER.
Very bullish day so far for SILC, sitting at $-.02 after retesting the high 20.xxs again.
I'm just not sure if it will break the downtrend with convincing volume with Earnings coming Monday. I can't see too much action, other than maybe drifting higher or slightly lower.
The industry they're in seems to be a hotspot. There was an interesting read that leads me feel quite bullish about the upcoming earnings posted on Yahoo! today. SILC will be a long term hold for me. Here's the article.
http://www.wrhambrecht.com/sector/network/notes/silc20070706.pdf
Great close..ultra-bullish day.
Close +1.00 at 22.45. Broke downtrend, 200k volume enormous for SILC.
Thanks for the article, bjc. SILC closed with a nice white candle. If those additional design wins come through, they can give a nice boost to SILC's revenue projection, hence provide a substance for a price target upgrade from this sole analyst. In any case, $25 is looming before or after the earnings. Let's see if we get a gap up. ;)
berloga-
If we hit $25 within the next couple days, I might sell half. If earnings are good and we gap up, I'm willing to pay up to get my whole position back, but just in case the market doesn't like the earnings, I still protect myself half way.
I'd also consider simply holding. The more I read about the industry, the more I feel like turning my head and ignoring short term fluctuations.
On an overall market note, nice recovery in to the close today and it's good to see IBM posted good earnings.
up 8.9% in premarket
why??
;D
SILC: Q2 EPS 25c vs 6c Beats 20c Est
Monday , July 23, 2007 08:32ET
QUARTER RESULTS
Silicom Ltd (SILC) reported Q2 results ended June 2007. Q2 Revenues were $6.62M; +81.87% vs yr-ago; BEATING revenue consensus by +1.85%. Q2 EPS was 25c; +316.67% vs yr-ago; BEATING earnings consensus by +25.00%.
Q2 RESULTS Reported Year-Ago Y/Y Chg Estimate SURPRISE
---------- ------------ ------------ ---------- ------------ ----------
Revenues: 6.62M $3.64M +81.87% $6.50M +1.85%
---------- ------------ ------------ ---------- ------------ ----------
EPS: 25c 6c +316.67% 20c +25.00%
---------- ------------ ------------ ---------- ------------ ----------
I hope cimt responds to earnings like this.
The company obviously has been more efficient delivering a much stronger profit margin, than expected. I wonder if that'll persist. We need to see the guidance. Holding for now. ;D
The 10% gap is reduced to 4%. Looks like a lot of people have been waiting to the ER to dump their shares... Anybody listening to the CC?
Down 7,5% now, I have no position but I wonder what's happenning ... ::)
edit: 8,5% now ...
apparently they stated in the CC that there is no 'visibililty' ...
Stopped out of SILC at $20. Just don't want to see it contine dropping. Didn't make the gap money, but well, not bad anyway. I missed out pretty much on most of the gaps we've had in the past, including more than 1 on GIGM. Now I know, when you see +10% in pre-open, SELL and go have a cup of coffee. :)
What kind of fucking idiots say there's no visibility?
What a joke
Out at 24.01 ;D That's luck for ya.
I am Long and I don't mind so much seeing SILC heading to cover its first gap
at (19,43 - 18,84) because:
1) the strong ascending support line would give SILC a chance to rebound from there after closing the gap and for the second time escaping nord at the top of a flag formation.
2) finishing the right shoulder by closing the gap and rebounding from there.
(I just spotted the shape of this reverse Head and shoulder formation --good for Long!--, the right shoulder is now forming(not draw on the chart)).
But I would sell if the ascending support line is cross.
Breathing a sigh of relief today on SILC. Hopefully this is the last we've seen of the teens, though I wouldn't be surprised at all if we got yanked down there again.
It seems as if common sense might be taking over here, but who knows, we'll see. With SILC trading at a trailing PE in the upper 20s and a forward PE south of 20, IMO SILC has the opportunity to rise to the upper 20s, maybe even extending into the lower 30s on a big rally.
My reading by priority is:
1) for Long's SILC is back inside the flag after its false breakout and wait to rebound at the ascending trendline level.
2) for Long's SILC build the right shoulder from a inverse Head and Shoulder pattern
giving a target of
24,27 + 7,27 = 31,54$
from the inverse H&S neck line level(24,27).
3) for Long's SILC is finishing the job of closing the gap (18,84 - 19,46 )
from the 28 Jun 2007
4) for Short's SILC is back in a descending channel, going down.
SILC is a good investment opportunity now at these levels ....
We really need David's readings and oppinion after the Ernings released
..
Quote from: ket1390 on June 08, 2007, 01:33:54 AM
I expect just a summer correction like last year 1-2 months...long term bullish....but it s good david puts a stop in now he has to protect his 15% gain of the 3sof portfolio.....in case of correction i expect all stocks to retrace 10-30% (who knows). ...if he is not protecting his porfolio it will probably go down to -/+ =0% this year. Then this long term talking, writing doesn t help much.
The problem is when new members arrive they just have to buy the stocks higher in the portfolio as they were not here when 3sof entered like silc was at 12 dollar...but they buy at 21 like some did and the risk increases. Mid term holding would be better as new members get chances to get in in other stocks much earlier...so a new member is a bit lost when he enters to high then....or he waits 2-3 months for the next pick..can he do this ?....and the name of the page is still "3 stocks on fire". In 2005 in the beginning we took more risks here and took gains earlier....i think the portfolio is to fat.....i would start again with 100 000.-. The head gets fresh again. I did the same took the gains to the bank...and restarted...felt good.
But i have to say i thank david i was learning a lot here in the last 2 years...about trading...so thats very positve. The whole story 3sof is still great.
a good trading day for all
ket
it s a pity profits melting..
Quote from: Terliso on June 29, 2007, 05:41:34 AM
Distribution still stronger than accumulation. Other than that, SILC still trading down the channel and below 50sma.
SILC is back inside the channel & below 50sma.... not so good to hold on to.....
Tomorrow will be a good day for SILC. ;D
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_S/threadview?m=tm&bn=16580&tid=7599&mid=7599&tof=2&frt=2
Nice day today, hopefully we have another good one tomorrow on higher volume to confirm some kind of a turnaround.
SILC is simply too cheap. Look at earnings and revenue trends. It deserves a higher pe ratio than 23.6, simple as that. Forward PE, based on ETrade's estimates, is 18.
I'm down about 10% I believe, maybe a bit less. I'm not too concerned. I'll sell my shares for $25 plus. Once we get a shift in trend, we should overextend to $30. That's where I'll sell.
I spent part of the weekend looking for stocks to buy, and even though I found some interesting stuff, I didn't get any better than some of the old Main's holdings, especially SILC. I heard the latest conference call, and even though revenue growth and EPS were great, the stock came off because management made the usual "there will be quarterly fluctuations" and "there's no visibility, that's why we don't provide any guidance" comments.
They made the same comments in Q1 (that was part of the reason my hands were weak) and still delivered a record Q2.
As I heard the 2nd quarter conference call and gave some more thought about the business and the stock, I believe I fully understood the nature of the business and see it growing a lot over the long term.
Just a few highlights from the conference call:
- The company had 47 design wins and that is about the same as "costumers";
- It is talking to 100 more companies to become their costumers. SILC had two design wins in Q2, but only announced one - this is because they only announce the ones that are very significant from a revenue impact point of view;
- They're looking for acquisitions;
- They've been talking with IBM, DELL and HP, but couldn't sign any deal because they were too small, not just in terms of revenues, but also in terms of working capital. Management believes now is the time to approach these giants again, and a contract with any one of them would provide at least $10 M more in annual revenues;
- The WAN optimization market will surely keep growing over the long term, but SILC may have quarterly fluctuations and even see sales down sequentially, if all costumers order less by-pass or non by-pass equipment;
- The company's inventory rose $1 M from Q1, that's because they expected more orders that didn't materialize in Q2. The question now is: will these orders happen in Q3 or not? Anyway, the inventory increase in Q2 may help expanding profit margins in Q3.
Overall I want to get back to SILC as a long term investor, but I think that because of fear of an earnings miss in Q3, the stock will probably touch the 200 days SMA, eventually.
I want to buy SILC at the 200 days SMA (blue in the chart below) and I'll adjust the trading plan accordingly everyday. For today the trading plan is:
Buy SILC, 6.66% of capital as always, if the stock prints $15.66.
SILC's 200 days SMA today stands at $15.72. The trading plan is to buy SILC if it reaches this value today, which is highly unlikely.
I guess the SMA will move up to catch up with price, instead of the price coming down to touch the 200 days SMA. We'll see.
I guess our plan to buy SILC at below $16 can now be safely abolished. Good thing my wife was stubborn and kept SILC in our account... I was a bit hasty and sold at $20 in my IRA...
SILC is 15% up today and closing in on $25...
Quote from: berloga on September 04, 2007, 02:58:43 PM
I guess our plan to buy SILC at below $16 can now be safely abolished. Good thing my wife was stubborn and kept SILC in our account... I was a bit hasty and sold at $20 in my IRA...
SILC is 15% up today and closing in on $25...
:'( :'(
Painful, but well deserved in my case.
Two lessons for the future:
1) If you want to buy, buy, forget waiting for a pullback;
2) Hold for as long as you trust the fundamentals, forget the chart.
Good judgement, David. Applaud!
I agree, patience pays off, given it has a fundamental justification. Investors are in a constant
pursuit of worthy stocks, hence the ones undiscovered will sooner or later be.
I wouldn't even think about selling SILC here. IBD is on to it. was highlighted on "Today's Daily Stock Analysis" at investors.com and is mentioned on today's front page at "The Big Picture"- and "leaders up in volume" - thinly traded network adapter that has barged out of a long price pattern this week.
Not on the IBD 100 list yet, but might soon appear there. .
By the way, IBD says market is still in confirmed rally since Aug 29, even though yesterday counted as a distribution day for the major indexes.
Thanks for the info, still holding...\
Kent
Quote from: BigSully1 on September 06, 2007, 06:28:18 PM
I wouldn't even think about selling SILC here. IBD is on to it. was highlighted on "Today's Daily Stock Analysis" at investors.com and is mentioned on today's front page at "The Big Picture"- and "leaders up in volume" - thinly traded network adapter that has barged out of a long price pattern this week.
Not on the IBD 100 list yet, but might soon appear there. .
By the way, IBD says market is still in confirmed rally since Aug 29, even though yesterday counted as a distribution day for the major indexes.
Hi BigSully1
are you a subscriber with IBD ? and what service ?
thanks
Quote from: Garoh on September 07, 2007, 03:55:16 AM
Quote from: BigSully1 on September 06, 2007, 06:28:18 PM
I wouldn't even think about selling SILC here. IBD is on to it. was highlighted on "Today's Daily Stock Analysis" at investors.com and is mentioned on today's front page at "The Big Picture"- and "leaders up in volume" - thinly traded network adapter that has barged out of a long price pattern this week.
Not on the IBD 100 list yet, but might soon appear there. .
By the way, IBD says market is still in confirmed rally since Aug 29, even though yesterday counted as a distribution day for the major indexes.
Hi BigSully1
are you a subscriber with IBD ? and what service ?
thanks
Yes, I get the daily paper and also have access to investors.com. Is that what you mean?
SILC showing strength, pretty good volume kicked in...and made a new high.
Kent
It looks like it is having a run into the earnings. Still holding on one of our accounts... Printed $27 a minute ago! >:D
from Zacks:
Silicom Ltd. (NASDAQ: SILC) announced last week a new line of Standalone BYPASS cards and modules, which will offer full BYPASS functionality in a ready-for-integration add-on card or module with no extra communication ports. According to the company, the innovative feature of the new product line takes it another step towards becoming a 'one-stop shop' for best-in-breed appliance connectivity solutions. Silicom Ltd. is an industry-leading provider of high-performance server/appliances networking solutions.
Silicom was a top-performing Zacks #1 Rank company last week with a gain of 19.1%. For its second quarter, the company reported earnings per share of 25 cents on revenues of $6.6 million. The earnings results soared almost 400% from the previous year's six cents and beat the consensus by 25%. Revenues increased 82% from $3.6 million.
nice chart:
;)
David,
Having amazing run with SILC & GIGM..These have been my top 2 holdings for a while now..
thanks for recommending SILC..
Nick
Quote from: David Randolph on September 04, 2007, 03:10:17 PM
Quote from: berloga on September 04, 2007, 02:58:43 PM
I guess our plan to buy SILC at below $16 can now be safely abolished. Good thing my wife was stubborn and kept SILC in our account... I was a bit hasty and sold at $20 in my IRA...
SILC is 15% up today and closing in on $25...
:'( :'(
Painful, but well deserved in my case.
Two lessons for the future:
1) If you want to buy, buy, forget waiting for a pullback;
2) Hold for as long as you trust the fundamentals, forget the chart.
SILC: WR Hambrecht Cuts to Hold from Buy; Analyst Notes
Wednesday, September 19, 2007 08:24ET
Issuer: Silicom Ltd (NasdaqSC: SILC)
Analyst Firm: WR Hambrecht
Ratings Action: DOWNGRADE
Current Rating: Hold (from Buy)
Analyst Comments: While the firm continues to believe that Silicom will benefit from the significant growth in key areas of the networking market, specifically the wide-area data services (WDS) market, they believe that expectations for growth are priced in and that SILC shares are fully valued at these levels. Given the recent run up in the stock (30% MTD) and the absence of any foreseeable near-term catalysts, they do not expect significant upside from these levels.
What do those guys know? They are not considering the revenue growth. SILC was at these levels 5 months ago and noone downgraded it. Now that it has reached above $24 suddenly a downgrade? According to David's model SILC must have plenty of steam to go on. ;)
It's a good chance now for a good gain in a few weeks ...
there's one condition which is not to close below $24 , it looks very nice now
David it could be nice to get back to this one if doesn't close below the stop $24
;)
Closed at $23.6 ... below the support. Unfortunately, the analyst may be right about the abcense of any catalysts to boost the stock up. So it can trend down now until the next leg up. :'(
OK, so we are now 15% (give or take a bit) off of the level at which it was considered "fully valued". . Does that make it a buy? I guess they unloaded yesterday so another 10-20% or so down and they will issue a "buy" after they have allowed their clients to load up at 20-25% below "fully valued".
>:(
Kent
QuoteDavid it could be nice to get back to this one if doesn't close below the stop $24
;)
It is more likely that I buy it if it falls further than if it holds $24, because I'm a long term investor based on fundamental analysis (the only way to be a long term investor, the chart analysis doesn't let you do that - unless it is a really long term analysis - using weekly data).
I think SILC is cheap when compared to its peers and its future is bright. The CEO has repeatedly talked about "quarterly fluctuations" which may happen, so maybe there's going to be a disappointment in one quarter or another, but we don't know when that's going to happen, or at what price. I would use the weak quarter news to buy SILC.
I should just buy and hold SILC, but I'll keep waiting for one of two things to happen for me to add it to the Main Portfolio:
1 - The stock touches the 200 days SMA, currently standing at $17.21.
2 - We get a weaker than expected quarter (which is to be expected, sometime) and I'll use that dip to buy, because I believe in the long term fundamentals of the business.
It's at the 200MA now, time to buy ... ?! ::)
Quote from: Se7en on October 22, 2007, 11:40:52 AM
It's at the 200MA now, time to buy ... ?! ::)
going to $16 for sure ::)
Just wait , Very bad gap down ..
No news today, why is it falling??? >:( We still are holding for the long term.
Has to be an earnings leak.
Quote from: buddjas1 on October 22, 2007, 01:49:29 PM
Has to be an earnings leak.
that has to be a big leak, already over 1mill shares traded ... but I don't think that's the reason, people often say this when a stock falls a lot but I don't 'buy' it ...
Quote from: buddjas1 on October 22, 2007, 01:49:29 PM
Has to be an earnings leak.
The CEO talked a lot about quarterly "fluctuations" in the past, and that has kept SILC's valuation in check. If there's a "fluctuation" in SILC's quarterly earnings I'm going to have to find a way to buy it.
I don't have a position in this stock, but I believe thats about to change real soon! My take on what happened is that although there wasn't any news that we know of, due to the general market sell-off last Friday, I believe a large hedge fund had to sell to meet margin calls due to other positions going lower. With SILC's float at around 3-4 million, it can easily move up or down big with a large order buying or leaving at one time. We have so many hedge funds in the market now, so this type of action is not uncommon. I'm going to watch the movement tomorrow and will be ready to buy this if it gains support at its 200 dma.
Good Luck Folks!
SILC has around 6M shares outstanding. It only had a small % of shares short (around 200K). Institutional holdings are around 20% of outstanding shares (approx 1.3m). Not exactly stats to predict such a meteoric sell off.
Today's volume was an historic record for SILC and interestingly it was this same week in 2006 (23rd Oct) that SILC had another huge volume day that effectively was the start of it's rise from being a $6 share to most recently a $25 share.
No one can know what the sell off was caused by, technicaly it looks horrendous. Will be watching for support to 'appear' before I make any judgements.
Good trading
Quote from: AussieTrader on October 23, 2007, 03:15:28 AM
No one can know what the sell off was caused by, technicaly it looks horrendous. Will be watching for support to 'appear' before I make any judgements.
Good trading
$17 zone has been significant support / resistance being tested multiple times going back to early 2007.
Quote from: Garoh on October 22, 2007, 12:40:26 PM
Quote from: Se7en on October 22, 2007, 11:40:52 AM
It's at the 200MA now, time to buy ... ?! ::)
going to $16 for sure ::)
Just wait , Very bad gap down ..
Still waiting for the target 8)
(SILC).......
ACHIEVES NEW DESIGN CONTRACT: Silicom Ltd. (SILC) has achieved a new design win for
its Bypass adapters from a company in the WAN optimization market, bringing the total number
of players in the WAN Optimization market which use Silicom cards to seven.
Quote from: AussieTrader on October 24, 2007, 04:02:38 AM
$17 zone has been significant support / resistance being tested multiple times going back to early 2007.
I entered earlier than I first expected purely because price action seemed to be bouncing off support nicely. The previous times it has tested that level it has proceeded to revert back toward the resitance zone within 10 sessions or so. Today closed above the 200MA which hopefully sets the stage for perhaps a repeat of that pattern. Mid to low $24 is a tough nut to crack and hold for SILC. For me part of this trade may become a reversion entry with profit taking in the resistance zone.
Quote from: AussieTrader on October 25, 2007, 02:47:49 AM
I entered earlier than I first expected purely because price action seemed to be bouncing off support nicely. The previous times it has tested that level it has proceeded to revert back toward the resitance zone within 10 sessions or so. Today closed above the 200MA which hopefully sets the stage for perhaps a repeat of that pattern. Mid to low $24 is a tough nut to crack and hold for SILC. For me part of this trade may become a reversion entry with profit taking in the resistance zone
Exited earlier than expected also! Closed my position Friday at $18.78 as I had some concerrn of the struggle to regain the 200SMA especially on a day when the markets were posting good action.
Silicom Reports Q3 Results: Q3 Sales up 59%; 9-Month Sales up 74% to $19.3M with $0.72 EPS
Monday October 29, 8:45 am ET
KFAR SAVA, Israel--(BUSINESS WIRE)--Silicom Ltd. (NASDAQ and TASE: SILC) today reported results for the third quarter and nine months ended September 30, 2007.
ADVERTISEMENT
Revenues for the third quarter of 2007 were $6.6 million, a 59% increase compared with $4.2 million in the parallel quarter of 2006. Net income for the period increased by 147% to $1.6 million, or $0.25 per basic and diluted share, compared to $666,000, or $0.12 per diluted share ($0.13 per basic share), for the third quarter of 2006.
Revenues for the first nine months of 2007 increased by 74% to a record $19.3 million compared with $11.1 million for the first nine months of 2006. Net income for the period increased by 191% to $4.5 million, or $0.72 per diluted share ($0.75 per basic share), compared with $1.5 million, or $0.29 per diluted share ($0.30 per basic share), for the first nine months of 2006.
Commenting on the results, Shaike Orbach, President and CEO, said, "We are very proud of our results for the quarter, especially the exceptional 24.8% net margin, which demonstrates once again the robustness of our business model. The strong sales that we have achieved throughout the year have enabled us to grow our year-to-date revenues by 74% while nearly tripling our net income for the period.
"This growth is tracking the continued strong development of our target markets - especially the WAN Optimization, Security and Network Appliances segments - which continue to increase the need for our multi-port connectivity and BYPASS products and to be an important growth engine for our company. Having secured two Design Wins during the third quarter and a new WAN Optimization Design Win just a week ago, we have now accumulated a total of 50 Design Wins and established an expanded footprint in our most important target markets."
Mr. Orbach continued, "To benefit fully from our favorable positioning, we continue to develop new, innovative solutions in line with market needs, another step in our plan for becoming a 'one-stop shop' for best-in-breed appliance connectivity solutions. By keeping an 'ear to the ground,' we are able to identify unmet needs and to continuously expand our addressable markets, fueling sustainable future growth. We are working to take advantage of our favorable positioning in fast-growing markets and are optimistic regarding our ability to deliver strong growth over the long term."
Conference Call Details:
Silicom's Management will host an interactive conference today, October 29th, at 9am EDT (6am Pacific Time, 3pm Israel Time) to review and discuss the results. To participate, please call one of the following numbers approximately 10 minutes before that time.
US: 1 888 281 1167
UK: 0 800 917 9141
ISRAEL: 03 918 0609
INTERNATIONAL: +972 3 918 0609
At: 9am Eastern Time, 6am Pacific Time, 3pm Israel Time
For those unable to listen to the live call, a replay of the call will be available for three months from the day after the call under the investor relations section of Silicom's website, at: www.silicom.co.il
About Silicom
Silicom Ltd. is an industry-leading provider of high-performance server/appliances networking solutions. The Company's flagship products include a variety of multi-port Gigabit Ethernet, copper and fiber-optic, server adapters and innovative BYPASS adapters designed to increase throughput and availability of server-based systems, WAN Optimization and security appliances and other mission-critical gateway applications. For more information, please visit: www.silicom.co.il.
Statements in this press release which are not historical data are forward-looking statements which involve known and unknown risks, uncertainties, or other factors not under the Company's control, which may cause actual results, performance, or achievements of the Company to be materially different from the results, performance, or other expectations implied by these forward-looking statements. These factors include, but are not limited to, those detailed in the Company's periodic filings with the Securities and Exchange Commission. The Company disclaims any duty to update such statements.
Silicom Ltd. Consolidated
Summary of Results
U.S. dollars, in thousands, except for per share amounts
Three-month period
ended September 30,
Nine-month period
ended September 30,
2007
(Unaudited)
2006 (Unaudited) 2007 (Unaudited) 2006 (Unaudited)
Sales $ 6,640 $ 4,179 $ 19,306 $ 11,101
Cost of sales 3,990 2,520 11,624 6,805
Gross profit 2,650 1,659 7,682 4,296
Research and development costs, gross 524
441
1,587
1,349
Less – royalty bearing participations ---
(8
)
---
(11
)
Research and development costs, net 524
449
1,587
1,360
Selling and marketing expenses 365 315 1,147 811
General and administrative 316 275 858 689
1,205 1,039 3,592 2,860
Operating income 1,445 620 4,090 1,436
Financial income, net 297 46 649 97
Income before taxes on income 1,742 666 4,739 1,533
Taxes on income 96 --- 279 ---
Net income $ 1,646 $ 666 $ 4,460 $ 1,533
Basic income per share $ 0.25 $ 0.13 $ 0.75 $ 0.30
Weighted average number of shares outstanding - Basic EPS (in thousands)
6,495
5,198
5,976
5,118
Diluted income per share $ 0.25 $ 0.12 $ 0.72 $ 0.29
Weighted average number of shares outstanding – Diluted EPS (in thousands)
6,707
5,347
6,174
5,329
Silicom Ltd. Consolidated Balance Sheets
(U.S. dollars, in thousands)
September 30, 2007
(Unaudited)
December 31, 2006
(Audited)
Assets
Current assets
Cash and cash equivalents $ 10,353 $ 4,513
Short term investments 3,218 1,009
Trade receivables 4,937 3,277
Other receivables 251 301
Inventories 5,137 3,739
Deferred taxes 48 46
23,944 12,885
Long term investments 17,433 3,811
Severance pay fund 854 730
Property and equipment, net 609 379
Other assets 42 48
Total assets $ 42,882 $ 17,853
Liabilities and shareholder's equity
Current liabilities
Trade payables
2,396 2,481
Other payables and accrued liabilities
1,633 971
Total current liabilities
4,029 3,452
Liability for severance pay 1,499 1,220
Total liabilities
5,528 4,672
Shareholders' Equity
Share capital and additional paid in capital
31,587 11,874
Treasury stock
(38 ) (38 )
Retained earnings
5,805 1,345
37,354 13,181
Total liabilities and shareholders equity $
42,882
$
17,853
Contact:
Silicom Ltd.
Eran Gilad, CFO, Tel: +972-9-764-4555
[email protected]or
Investor Relations:
GK Investor Relations
Kenny Green / Ehud Helft, Tel: 1 646-201-9246
[email protected]
Missed a bit on the consensus top line figure, but met the bottom line with strong margins. Looks like there probably was a leak, and should alreadty be more than priced in. I'm going to look for a bargain this morn.
Where's the next major support for this one? 16? I want to buy but am hesitant. Thanks.
Quote from: ygtrdr on October 29, 2007, 10:05:52 AM
Where's the next major support for this one? 16? I want to buy but am hesitant. Thanks.
Support is around $17 on close. Since March SILC doesn't close below $17.
I'll listen to the conference call and will consider SILC to buy tomorrow at the open. It is roughly at the same price I sold it, and that was a mistake, so I need to consider the buying hypothesizes strongly.
Good luck if you already own it :)
Applaud. Thanks David.
update:
1)
SILC: Merriman Ups to Buy from Neutral; Analyst Notes
Monday , October 29, 2007 13:04ET
Issuer: Silicom Ltd (NasdaqSC: SILC)
Analyst Firm: Merriman Curhan Ford & Co.
Ratings Action: UPGRADE
Current Rating: Buy (from Neutral)
Analyst Comments: The firm's upgrade is based on the company's strong profitability in 3Q07, an expected rebound in growth from the company's bypass card revenue after a 17% sequential decline caused by inventory digestion and an inexpensive valuation. They believe Silicom has not lost any share in the WAN optimization appliance market and view the 3Q07 drop in revenue from the company's bypass card line as a temporary setback due to inventory
digestion and order timing.
2)
Silicom falls after 3Q results; Merriman Curhan sees 'opportunity' in stock
Monday , October 29, 2007 16:16ET
By Staff Reporter
BOSTON, Oct 30, 2007 (Thomson Financial via COMTEX) -- Shares of Silicom Ltd. fell Monday after the Kfar-Sava, Israel-based networking and communications devices manufacturer reported third-quarter results that disappointed some analysts.
The company reported ahead of Monday's open net income of $1.6 million, or 25 cents a share, up from $666,000, or 13 cents a share in the year-earlier period, amid a 59% increase in revenue to $6.6 million.
Two analysts surveyed by Thomson Financial has estimated earnings of 24 to 27 cents a share, for an average of 26 cents a share, on revenue of $7 million to $7.34 million..
Shares fell 8% to $17.58 on volume of 534,000. The issue's 30-day average volume is 209,600.
Despite the weaker-than-expected results, Merriman Curhan Ford & Co. upgraded Silicom to buy from neutral saying that a 17% sequential decline in the company's bypass card revenue is a "temporary setback due to inventory digestion and order timing from the wide-area network optimization original equipment manufacturers."
The company's bypass card revenue fell to $3.3 million from $4 million in the second quarter, which Merriman believes was a result of large order placed earlier in the year that caused inventory correction in the most recent quarter. "We view the setback in the current quarter as an opportunity for an inexpensive entry point to a highly profitable and potentially rapidly growing company," said analyst David Duley.
3)
Chart:
Damn it, the conference call replay still isn't available in SILC's website (http://www.silicom.co.il/pgx.php?p2=393). But, judging from the analysts recommendations la-onda brought us the call was fine.
According to the following ...
QuoteDespite the weaker-than-expected results, Merriman Curhan Ford & Co. upgraded Silicom to buy from neutral saying that a 17% sequential decline in the company's bypass card revenue is a "temporary setback due to inventory digestion and order timing from the wide-area network optimization original equipment manufacturers."
The company's bypass card revenue fell to $3.3 million from $4 million in the second quarter, which Merriman believes was a result of large order placed earlier in the year that caused inventory correction in the most recent quarter. "We view the setback in the current quarter as an opportunity for an inexpensive entry point to a highly profitable and potentially rapidly growing company," said analyst David Duley.
... we've had the "revenue fluctuation" the CEO had warned it would inevitably happen in one quarter or another, not compromising growth prospects.
With $0.25 EPS in Q3 2007 I would say the stock is trading at about 17.5 times earnings, which is cheap, given its historical growth rate and prospects.
However, I see a few "negatives" when I compare reality with the expectations I had when I initially recommended this stock, namely:
1 - The share count grew 25% over the past 12 months, which is quite a lot:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41463;image)
2 - Analysts are forecasting just 23% revenue growth in 2008 (http://finance.yahoo.com/q/ae?s=SILC);
3 - The tax rate in Q3 2007 was just 5.5% and in the nine months so far in 2007 it was just 5.88%. I don't think this will last forever, and when the company passes the "incentive tax period" I think net profit margin will be hit.
So, if I derive more "conservative" estimates, the stock looks fairly valued and should go up about 16% a year going forward, which is attractive, but not enough for the Main Portfolio and its long term goal of a 30% average annual return:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41464;image)
My conclusion is that SILC is attractive at this point and it will surely bounce nicely from the $17 support level, but I'm not going to buy it because I think I can do better if I work harder towards finding the best long term investments for the Main Portfolio.
Good luck if you own it :)
from seeking alpha:
Silicom Selloff Overdone; Expecting Quick Recovery
posted on: November 27, 2007 | about stocks: SILC
Print Email
Silicom Ltd. is a company that has experienced strong growth over the last couple of years but has sold off recently after a flat quarter. I think the drop in share price has been way overdone and now would be a good time to buy some shares.
Silicom Ltd. engages in the design, manufacture, marketing, and support of connectivity solutions for a range of servers and server-based systems in Israel, the United States, and internationally. It primarily manufactures server networking cards with and without bypass (Server Adapters), and legacy products, including connectivity solutions for portable personal computers and broadband Internet access products.
The company's revenue and net income have been growing quickly over the last year with the exception of last quarter which was essentially flat (see chart below).
In the conference call for Q3 07 the CEO of Silicom Ltd. said purchases can vary from quarter to quarter so the flat results last quarter are not indicative of a trend. He also stated he is optimistic about future growth.
I don't think the results Silicom Ltd. reported last quarter merited such a huge sell off (the stock is off 50% from its yearly high). However, I think the overreaction provides a nice buying opportunity.
The stock price of Silicom Ltd. has found support and is starting to rebound. The stock is also trading at a nice valuation (trailing PE of 15). If Silicom Ltd. can continue to show growth like they have in the last couple of years the stock price will quickly recover.
QuoteI don't think the results Silicom Ltd. reported last quarter merited such a huge sell off (the stock is off 50% from its yearly high). However, I think the overreaction provides a nice buying opportunity.
The stock price of Silicom Ltd. has found support and is starting to rebound. The stock is also trading at a nice valuation (trailing PE of 15). If Silicom Ltd. can continue to show growth like they have in the last couple of years the stock price will quickly recover.
I agree with this Seeking Alpha analysis la-onda. I just wonder if there won't be a further sell off to close that gap at $10:
SILC would be a wonderful buy at $10. I wonder if the market will be inefficient enough to take it that low.
Quote from: David Randolph on January 08, 2008, 07:56:31 AM
SILC would be a wonderful buy at $10. I wonder if the market will be inefficient enough to take it that low.
Indeed.
At $10 SILC will be a fast growing technology company, uncorrelated with the economic cycle, trading at 10 times earnings. But since the market is about to open with a "crash feeling", I'll be even more demanding and will try to buy SILC between $9 and $9.5.
I've been waiting for this opportunity for a long time and wish the timing is right, since at this price I have no doubts about the attractiveness of the fundamentals.
The Trading Plan is:Buy SILC between $9 and $9.50. 6.66% of capital as usual. Note: If it doesn't reach $9-$9.50 today I'll wait a few more days, it seems something just happened in the market and they wont open as low ... what was it?
Fed cuts interest rates by 75 basis points (http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B7C98B5FC%2DE264%2D4F75%2D8C42%2D0256DEB52242%7D&siteid=mktw)
0.75% rate reduction!
Silicom's Fourth Quarter and Full Year 2007 Results Release Scheduled for January 28
Monday , January 21, 2008 03:18ET
KFAR SAVA, Israel, Jan 21, 2008 (BUSINESS WIRE) -- Silicom Ltd. (NASDAQ:SILC) (TASE:SILC), an industry-leading provider of high-performance server/appliances networking solutions, announced that it will be releasing its fourth quarter and full year 2007 results on Monday, January 28th, 2008, before the US market opens.
nice call David!
Quotenice call David!
We'll see about that la-onda :)
SILC will report earnings shortly:
• Silicom's Fourth Quarter and Full Year 2007 Results Release Scheduled for January 28 (http://biz.yahoo.com/bw/080121/20080121005225.html?.v=1)
Business Wire (Mon 3:19am)
Actually it will report on my birthday, I hope SILC gives me a nice birthday present :D
The one analyst covering the stock expects $0.25 EPS for the quarter, the same as it was in Q2 and Q3:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=43233;image)
As for 2008, he expects $1.10 EPS, so SILC is trading at 9 times forward earnings. I actually think SILC will grow more than this, but it's good to see expectations are contained and the stock is this cheap.
In fact, a 1 cent miss in one single quarter (even though management previously warned several times that there would be quarterly fluctuations) made the stock tank 61% in just three months:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=43234;image)
Instead of getting angry because the market is so inefficient and moves so wildly over the short term, I need to adapt and take advantage of this. But I still don't know how to do it. Well, this SILC trade seems to be a step in the right direction ... I thought the stock was cheap at $15 but opted to wait until it was a deep bargain to buy it ... also waited for the right timing from a technical perspective. We'll see if it was a good move.
so fare so good ;)
Quote from: la-onda on January 24, 2008, 08:31:18 PM
so fare so good ;)
Yep, 4th quarter results will be out Monday before the open and I'll hold through them.
up 20% pre-market
Silicom's Momentum Continues: Achieves Record Results for Q4 & 2007
Monday January 28, 8:15 am ET
- Q4- $7.5M Revenues, $1.8M Net Profit, 22% Operating Margin -
- 2007- $26.8M Revenues, $1.00 EPS -
KFAR SAVA, Israel--(BUSINESS WIRE)--Silicom Ltd. (NASDAQ:SILC - News)(TASE:SILC) today reported record results for the fourth quarter and twelve months ended December 31, 2007.
ADVERTISEMENT
Revenues for the fourth quarter of 2007 increased by 49% to $7.5 million compared with $5.0 million for the fourth quarter of 2006. These are the Company's highest quarterly revenues on record, and represent 13% sequential growth compared to the third quarter of 2007. Net income for the period increased by 71% to $1.8 million, or $0.27 per diluted share ($0.28 per basic share), compared to $1.1 million, or $0.20 per diluted share ($0.21 per basic share), for the fourth quarter of 2006. Operating margin for the quarter increased to 22% compared with 19% for the fourth quarter of 2006.
Revenues for 2007 increased by 66% to $26.8 million compared with $16.1 million for 2006. These are the Company's highest annual revenues on record. Net income for 2007 increased by 142% to $6.3 million, or $1.00 per diluted share ($1.03 per basic share), compared with $2.6 million, or $0.49 per diluted share ($0.51 per basic share), for 2006. Operating margin for the year increased to 21%, compared with 15% for 2006.
As of the end of 2007, the Company's cash and equivalents totaled $32.9 million, compared with $9.3 million at the end of 2006.
Commenting on the results, Shaike Orbach, President and CEO, said, "We are proud to report the strongest quarter and year in our history, both of which set new records in terms of revenues, operating profit and net income. These exciting results are being driven by the accelerated growth of our target WAN Optimization, Security and other Network Appliances markets, which continue to exhibit strong demand for our advanced multi-port connectivity and BYPASS products; moreover, we have been growing faster than our target markets through our success at expanding our business with existing customers while continuing to achieve new design wins."
Mr. Orbach continued, "We are particularly pleased to record a steady rise in our operating margin to its current level of 21%, a demonstration of the leverage inherent in our business model. Having accumulated a total of more than 50 Design Wins in a variety of market segments for the full range of our products, we are not dependent upon any single market segment, and feel well positioned to continue delivering growth in the future."
Thanks for posting the results Se7en :)
• Silicom's Momentum Continues: Achieves Record Results for Q4 & 2007 (http://biz.yahoo.com/bw/080128/20080128005647.html?.v=1)
Business Wire (Mon 8:15am)
SILC's fundamentals continue to improve, so the slide from almost $30 to below $10 was just due to an earnings multiple contraction.
I notice the stock up strongly in the pre-market, however I also noticed that insiders have prepared themselves to unload some shares on the good news:
http://www.sec.gov/Archives/edgar/data/916793/000117891308000205/zk84756.htm
«Silicom Ltd. (the "Registrant") held an Extraordinary General Meeting of Shareholders on January 24, 2008 at 10:00 a.m. Israel time (adjourned from January 17, 2008) at the Registrant's offices at 8 Hanagar Street, Kfar Sava 44000, Israel. Copies of the Notice of Extraordinary General Meeting, Proxy Statement (including Exhibits A and B thereto) and Proxy Card relating to the Meeting were filed on Form 6-K by the Registrant on December 13, 2007. The Registrant is announcing that the resolutions relating to: (i) the replacement of the Registrant's Articles of Association; (ii) severance arrangements for the Registrant's Active Chairman of the Board of Directors; (iii) severance arrangements for the Registrant's President and Chief Executive Officer; (iv) option grants to the Registrant's Active Chairman of the Board of Directors; (v) option grants to the Registrant's President and Chief Executive Officer; and (vi) authorization of a new form of indemnification agreement for the Registrant's officers and directors, were duly passed at the Meeting.»
I'll try to take profits around $13.3 for a 40% profit (also the 50 days SMA stands at $13.35). If we break $12 on the downside before this happens I'll also SELL. I'm tired of watching my profits slip. I won't allow it this time.
(but hey, don't you go putting orders in the pre-market and damage the momentum)
Maybe the orders around $13.3 didn't allow the stock to go up to that point, since the high of the day was $13.26.
As I was writing now the stock broke down below $13 ... feel free to sell now if you wish.
I'll have to put the selling price according to the trading plan posted above.
SILC seems destined for $20. Why would you sell here? What happened to long term investing? Very confused about your trading plan on this one.
Me too ???
Got out at $13.3, as planned :)
QuoteSILC seems destined for $20.
You think so? I hope so, but I don't know man, growth is slowing down and there aren't many micro caps outthere sporting a p/e of 20. But this can change and that's my expectation in general , so I hope you're right.
QuoteWhy would you sell here?
I posted my reasoning. I sniffed insiders preparing to unload shares on the good news, so if they do sell, why shouldn't I take profits?
Another issue is that they continue to increase the share count:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=43305;image)
QuoteWhat happened to long term investing?
Nothing happened.
QuoteVery confused about your trading plan on this one.
I'm human like everybody else and wanted to take a profit on my birthday ;D
No, seriously, perhaps I'll come back to SILC later, maybe even at a higher price, but for now I'm happy with the way this trade unfolded. I'm a long term investor, but I'm free!
Good luck :)
Well done David. 40% profit in this market in such a short time is great.Sell and say thank you very much.
Hey Cesar, I guess, the best wish for you would be strong health! I hope all your weaknesses are temporary and you'll fight all ailments decisevely, as you usually approach things!
The best of luck and help bring the fortune to all of us here!! :-*
*************************************************************************
A note for SILC: good move. And thanks for admitting the PFSW opportunity at $1.50. You never know. But, you're right, you still remain a lon-term investor, eventhough you sell a stock today. The idea is to take considerable profits when they come quickly and then continue to analyze and decide whether to buy again or not. This way, you'll have financial backing of the short-term profits. Do not fight market inefficiencies!
Hi Cesar,
A very happy birthday to you. Mine is tomorrow.. looking forward to presents from the wife, kids, and dog.. and hopefully a great earnings report from ISRG ( by far my biggest holding! )
Rick
Sold at $ 13,90 ;D ;D ;D ;D
Thank you David! We needed one like this ;)
Amarens
Best Wishes to You , Happy Birthday!
I hope CIMT will repeat SILC in near future
Vova
HAPPY BIRTHDAY DAVID!
I wish you the best.
Don't listen to those boys. I love short-term trades. hehe
Happy Birthday David! My birthday was yesterday.
As for SILC, it was a great trade! Thanks!
I think we ought to have at least one trade like this every week to help the portfolio catch up!
Enjoy your day!
Silicom Enters China: Receives $1.8M Order from Leading Chinese Server Company
Monday February 4, 7:23 am ET
http://biz.yahoo.com/bw/080204/20080204005674.html?.v=1 (http://biz.yahoo.com/bw/080204/20080204005674.html?.v=1)
KFAR SAVA, Israel--(BUSINESS WIRE)--Silicom Ltd. (NASDAQ:SILC - News)(TASE:SILC) today reported that it has received a $1.8 million order from one of China's largest domestic server companies, representing its first significant penetration into the vast Chinese market. The order is for production quantities of Silicom's advanced fiber multi-port Gigabit Ethernet adapters scheduled for delivery during the first quarter.
"We are excited to achieve this significant initial penetration of the strategic Chinese market," commented Shaike Orbach, Silicom's President and CEO. "China's rapid growth represents a huge new opportunity for Silicom, especially the fact that its server usage is growing in step with the phenomenal development of its telecom, transportation, banking and other sectors. In fact, according to CCID Consulting, more than half a million x86 servers were sold in China in 2007, with additional strong growth projected for 2008.
"As such, this first order from a major Chinese server vendor is a significant milestone for us. Beyond its potential to generate repeat orders over time, this order demonstrates our ability to achieve significant sales in China, paving the way for success with the market's many additional vendors. As such, we believe the Chinese server market could become a strong new driver of our long-term growth."
Great news for SILC as Se7en posted. The stock is at $16 in pre-market ... that 40% quick profit was a birthday present that I shouldn't have taken. Congrats to the ones still holding and thank you for your kind words :)
Silicom's First Market Penetration
into China Forecasted in Earnings Call
Trading on Silicom Ltd. (SILC) was up 13.934% on news that the company has received a $1.8M order from one of China's largest domestic server companies, representing its first significant penetration into the Chinese market. In Silicom's January 28 earnings call, Silicom's CEO stated, "We currently do not have visibility but we feel we're making progress in this market, and we've decided this will become a major focus for us. Until now, we've hardly had any business in china, but I think we will begin to very soon." The company has now experienced four years of continuous revenue growth, driven by its main end-market
in WAN optimization, network security and servers market, where it believes will continue to see signiciant growth opportunity. Silicom reports increasing market awareness for ten Gigbit data speed, particularly among enterprise networks, trending toward ten gigabit solutions.
Silicom's focus long term growth is in its design wins, which will enable the company to see year-over-year growth ahead of its target market.
The China order for Silicom's advanced fiber multi-port Gigabit Ethernet adapters is scheduled for delivery during the first quarter. According to CCID Consulting, more than half a million x86 servers were sold in China in 2007, with additional strong growth projected for 2008.
awesome chart, again nice pick David (even if you have sold a little bit too early but locking profits in this market environement is fine!!
Am I late to wish you happy birthday, David? ;-)
happy birthday also to houlahan!
ciao,
A.
QuoteGreat news for SILC as Se7en posted. The stock is at $16 in pre-market ... that 40% quick profit was a birthday present that I shouldn't have taken.
Well, after that "great" news from China, SILC came off to a low of $11.31. Currently it stands at $13, just fluctuating on low volume.
The stock looks cheap on a comparison with its peers ...
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=44933;image)
... but that's not enough of a reason to consider it a buy. The discount is probably there for a reason, since SILC warns a lot of potential wild fluctuations in quarterly results, someday probably it will report a sharply lower EPS. I've been waiting for this and it still didn't happen, yet the stock fell 60% just due to multiple compression ::)
::) :-X
Silicom Delivers Record Revenues for Q1 2008
Monday , April 28, 2008 08:14ET
KFAR SAVA, Israel, Apr 28, 2008 (BUSINESS WIRE) -- Silicom Ltd. (NASDAQ:SILC)(TASE:SILC) today reported its financial results for the first quarter ended March 31, 2008.
Revenues for the first quarter of 2008 reached a record $7.7 million, an increase of 27% compared with $6.0 million recorded in the first quarter of 2007.
Net income for the period increased by 39% to $1.7 million, or $0.26 per share (basic and diluted), compared with $1.2 million, or $0.22 per diluted share ($0.23 per basic share), for the first quarter of 2007.
As of the end of the first quarter, the Company's cash, cash equivalents and marketable securities totaled $35.1 million, an increase of $2.2 million compared with the end of 2007.
Commenting on the results, Shaike Orbach, President and CEO, said, "We are pleased to report another quarter of record revenues and sequential revenue growth, especially in a market environment that has entered a period of slowdown. Despite the current uncertainty, we continue to see many opportunities in our target markets that we are well-positioned to address. During the past year, we built our business to a new level, increasing our customer base to over 50 companies, many of them leaders in our target markets, and made a successful initial penetration into the vast Chinese market. In parallel, we broadened our product portfolio in ways that enhance our competitive positioning in our addressable markets. We believe these are differentiating advantages that will help us continue to win business and to grow our company over the long term."
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SILC: Q1 EPS 26c vs 22c Meets 26c Est
Monday , April 28, 2008 08:30ET
QUARTER RESULTS
Silicom Ltd (SILC) reported Q1 results ended March 2008. Q1 Revenues were $7.70M; +27.34% vs yr-ago; BEATING revenue consensus by +0.17%. Q1 EPS was 26c; +18.18% vs yr-ago; MATCHING earnings consensus.
Q1 RESULTS Reported Year-Ago Y/Y Chg Estimate SURPRISE
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Revenues: $7.70M $6.05M +27.34% $7.69M +0.17%
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EPS: 26c 22c +18.18% 26c 0.00%
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SILC: Merriman Cuts to Neutral from Buy; Analyst Notes
Tuesday , April 29, 2008 08:52ET
Issuer: Silicom Ltd (NasdaqNM: SILC)
Analyst Firm: Merriman Curhan Ford & Co.
Ratings Action: DOWNGRADE
Current Rating: Neutral (from Buy)
Analyst Comments: Despite in-line 1Q08 results, the firm is downgrading SILC shares to Neutral from Buy given the prevailing headwinds that its core customers are experiencing and the related impact to the company's bypass card and adapter sales. While Silicom expects to see continued growth in these business segments, visibility continues to remain weak, which can result in back-end loaded quarters (~50% of sales in month 3 - their estimate). They are encouraged by the company's movement into adjacent markets to help diversify its business, but until there is improved visibility with some of its largest customers, the firm is moving towards a more cautious stance. &
SILC: Downgraded on Customer Headwinds as Company Looks to Chinese Server Mrkt
Tuesday , April 29, 2008 16:00ET
By Michael Cavallaro,
[email protected]Trading on Silicom Ltd (NASDAQ NM: SILC) was down 5.847% following this morning's news that Merriman Curhan Ford & Co. had downgraded the company's shares from Buy to Neutral given the prevailing headwinds that its core customers are experiencing and the related impact to the company's bypass card and adapter sales. Said the analyst firm, "While Silicom expects to see continued growth in these business segments, visibility continues to remain weak, which can result in back-end loaded quarters. In lieu of this, the company has moved into adjacent markets to help diversify its business.
During yesterday's conference call, the company reported that vendors in the LAN optimization market such as Riverhead were showing signs of slowing growth with elongated sales cycles. Said CEO Shaike Orbach, "This is a concern for us because this is a significant market for us. In our conversation with customers, they're more than concerned because orders were being placed more quickly, and we're directly in the food chain."
Silicom also reported a $1.8M purchase order in the Chinese server market, which rose above the gross margin range. Gross margins were impacted by the Chinese server order because of fiber costs where margins are high. Going forward the company hopes to penetrate additional vendors based on this win. Said Orbach, "This customer is working project to project, so we can't be sure about receiving additional orders. But once they're able to acheive more projects, we have reason to believe we will have more purchase orders. Right now the customer is working to get more projects."
SILC
here is the update chart after a 3 days plonge.
I think most people here knows SILC reasonably well.
It's obvious that the stock is bearish from a technical standpoint, as one can see in the following chart:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=45550;image)
Down 71% in about 8 months. What happened?
Well, fundamentally, nothing very dramatic happened. The company just didn't keep growing very fast on a quarterly basis, as it reached a plateau in EPS, between $0.25 and $0.28 a quarter.
So, the p/e multiple came down from 28 or so to the current 8 or so.
This last fall, from $13 to $8, was due to the downgrade la-onda posted above (and I've attached the complete analysis). The analyst didn't have much to complain about, he was just fearful that SILC's major costumers, Cisco and Riverbed, were slowing down orders. ARUN is also another company which is probably SILC's costumer, at least it is in the same area as RVBD.
Well, I was bearish in ARUN and RVBD because those stocks seem so way overvalued using the usual metrics. But it seems I was wrong, as you can see in the following two charts, these stocks are making bullish technical signals:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=45551;image)
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=45552;image)
Now, I don't understand very well why they're turning bullish, but the fact is that they are, and this should put a more positive spin on SILC. This still didn't happen, as SILC has been going down every day, but I guess it will happen sooner rather than later.
SILC is now a $56 M market cap company, with revenue of $28.4 M over the last 12 months. The company also earned $1.04 per share in the same period, so its trailing p/e multiple is 7.9. I believe it doesn't make much sense to value SILC's costumers at 100 times earnings (RVBD), or negative p/e (ARUN) and at the same time, value SILC, the company providing them products for them to do what they do, at just 7.9 times earnings.
If the costumers grow, SILC will also grow. So, why the differences in valuation? It isn't because of recent numbers, because if SILC experienced a slowdown, others saw an even more meaningful decline in revenue and EPS in Q1 08.
I've missed several stocks which at some point were very attractive because I was fearful. I'm going to get more confident and recommend bargain hunting SILC at this point. The balance sheet also provides safety, with $26 M in working capital and $19 M in cash (good for a $56 M market cap company).
The plan is:
Add SILC to the Main at today's opening price, 6.66% of capital as usual.
Update:
Like David mentioned, SILC technical outlook was bearish, and even with the recent pullback it is still bearish. Anyway, David's motivation on this trade had nothing to do with technicals, this is a bargain hunt based on the stock valuation at these prices (which is something impossible to do with technical analysis alone).
The timing for this trade looks great for now, SILC is still trading at 8 times earnings, while its industry trades above the 20's. Even with downgrades and lower estimates, it doesn't make much sense to watch this stock trading on this kind of multiples.
From a TA perspective we can't add much yet, the volume generated in this last down swing may suggest some sort of selling exhaustion, but it's too early to conclude.
There is a Gap opened above $11, a descending resistance near $12, and the EMA-50 on the same zone... so if I had to call a target for a pullback, I would point something like $11/$12, but as I said, not a very solid technical perspective yet as we may watch a lot of short term «noise».
Trading Plan:
HOLD SILC
Regards,
Update:
SILC has performed a few triangular patterns during the last few months; unfortunately all those symmetrical triangles were broken to the downside...
Well, SILC is once again with a clear triangulation for the short term, so we must be protective, and even if the stock has great fundamental prospects and is clearly trading at bargain multiples, I'm setting a tight stop level (taking in consideration the triangle setup right now).
So the new trading plan is
Trading Plan:
HOLD SILC with a stop @ $8.20
Update:
Just a quick technical update:
The triangular layout needs to be updated but can still be considered (as the recent market action changed the pattern).
We can still considerate the inversion scenario, SILC didn't had much price or volume action for the past weeks, but it is still holding these level quite well. Our entry was at $8.32, current short term support at $8.30 and our stop at $8.20 makes this trade a low risk shot to catch a decent rebound play. The trading plan remains the same:
Trading Plan:
HOLD SILC with a stop @ $8.20
SILC stopped @ $8.20