The last four stocks I bought for the Main Portfolio (http://www.3stocksonfire.org/3stocksonfire.php), TZOO, NTES, JAKK and VPHM are showing a loss, but I believe that is just temporary. Anyway, I could use buying a stock that goes up not just over the medium/long term, but also over the short term. I believe NGA is that stock:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=36510;image)
I know the stock is already up a lot, but the fundamental improvement the company just had tells me there's at least another 50% in the pipe over the short term. NGA also looks like an extremely attractive long term holding for the Main Portfolio (http://www.3stocksonfire.org/3stocksonfire.php).
Q1 2007 results were out on that big gap up day:
• North American Galvanizing & Coatings Reports Record First Quarter 2007 (http://biz.yahoo.com/prnews/070430/dam008.html?.v=97)
PR Newswire (Mon, Apr 30)
Q1 EPS on a fully diluted basis was $0.28. If we multiply this by four quarters (but there has been growth), we get a full year EPS of $1.12. Since the stock closed yesterday at $11.7 it is trading at 10.4 times conservatively estimated 2007 earnings, which is very attractive, considering the 52% revenue and 115% EPS growth the company is experiencing from 2006 levels.
NGA is still just a $96 M market cap, and it has a good chance of reaching $100 M in revenues and $10 M in net income in 2007, since the net profit margin in Q1 was 10%.
Let me compute those 4 variables so we can get a more clear picture of a legitimate expectation for the long term:
1) Dilution factor
The balance sheet is weak, but it has been that way for many years and they didn't dilute shareholder's value. There has been some dilution lately but that is due to a 2004 stock option compensation plan that granted employees the right to buy 1,250,000 shares at around $2, so they're exercising the right to buy these shares, therefore increasing the share count. Those 1,250,000 options were already exercised, so I don't expect more than 2% dilution factor going forward, since there wasn't any historical dilution prior to 2006.
2) Revenue CAGR
Revenues were $35 M in 2004, $47 M in 2005, $74 M in 2006 and we already got $23.5 M in Q1, so I guess the company has a good shot at $100 M plus revenues in 2007. Revenue growth was 34% in 2005 and 57% in 2006. I'm estimating just 34% for 2007, but revenue growth in Q1 2007 when compared to Q1 2006 was 52%. I believe I'm being conservative enough if I estimate revenue will grow at an average annual pace of 30% over the next three years, so my revenue CAGR estimate is 1.3.
3) Net profit margin estimate
Net profit margin was 10% in Q1 2007, I'll use this as my estimate for the future, but it can get better, if the zinc price declines, as we'll discuss next.
4) EPS multiple estimate
The Industrial Equipment & Components industry (http://finance.yahoo.com/q/co?s=NGA) average earnings multiple is 18.36, but NGA is growing about three times more than the industry average. Nevertheless, to be conservative, I'll assume an EPS multiple estimate equal to the industry average of 18.36.
The valuation model results are:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=36513;image)
There are two things that I especially enjoy about this stock. The first is its capacity to pass along higher costs to even higher prices to its clients. This means that if zinc (its main input) goes down, the company will increase its net profit margin, because probably it won't lower the end prices as much as the commodity may decline. It is apparent to me that this company has a lot of pricing power.
The second issue that really attracts me to it, given the current difficulty of the Main Portfolio (http://www.3stocksonfire.org/3stocksonfire.php) to push to new highs, is that this stock is not just undervalued, it is obvious to anyone that takes 5 minutes to look at it that it is undervalued. You don't have to dig much to see it, it's all over the Q1 results. That's why I expect NGA to quickly correct this undervaluation, at least partially, by rising another 50% over the next couple of months.
The Trading Plan is:
Buy NGA, 6.66% of capital as always.
Another great pick David
It's really attractive fundemantly and technically ...
keep the good work :)
David, I don't believe they will do over $1.00 in 2007 but more like .75.
Looks like a strong first quarter due to 54% increase in zinc.
(The company's ability to increase average selling prices above zinc cost increases had a favorable impact on operating income. The London Metals Exchange (LME) market price for zinc for the first quarter of 2007 averaged $1.57 per pound, compared to $1.02 per pound in the first quarter of 2006, representing a 54% increase. In the three-months ended March 31, 2007, average selling prices for galvanizing and related coating services were 55% higher than the prior year first quarter. Forward purchases of zinc at prices lower than current market during the first three months of 2006 contributed $915,000 to that period's operating income.)
Puts value at $13.50 will pullback when volume leaves.
Zinc is an expense for the company, if zinc price didn't go up, profits would be even higher:
«The Company conducts a service, galvanizing and coating operations, through its
NAG subsidiary. NAG is principally engaged in hot dip galvanizing of metal
products and components fabricated and owned by its customers. All of NAG's
revenue is generated from the value-added galvanizing and coating of
customer-owned products. NAG galvanizes iron and steel products by immersing
them in molten zinc. This bonding process produces an alloyed metal surface that
provides an effective barrier ("cathodic protection") against oxidation and
corrosion from exposure to the elements, for up to 50 years. Additional coating
services provided by NAG include sandblasting, quenching, metalizing (flame
sprayed), centrifuge spinner galvanizing, Corrocote Classic II painting and
INFRASHIELDsm Coating.»
NGA made $0.28 EPS per diluted share in Q1 2007. There's no seasonality here, just very strong growth. In Q1 2006 NGA made $0.13, and then $0.58 for the full year, more than the "natural" $0.52 (which is $0.13 multiplied by 4).
So we can realistically expect EPS of $1.10 to $1.20 for the full year 2007. NGA Friday's close was $12.36, so the stock is trading at a forward earnings multiple of about 10.75. I say this rally should take it at least to a 15 forward earnings multiple, and that would mean a $17.25 stock.
There will be pullbacks along the way, but I see this stock at $17.25 in a couple of months and I'll keep on holding it.
N.A. Galvanizing Director Sells Shares
Monday May 7, 3:14 pm ET
North American Galvanizing & Coatings Director John H. Sununu Sells 96,266 Shares.
Quote from: jos on May 07, 2007, 08:14:28 PM
N.A. Galvanizing Director Sells Shares
Monday May 7, 3:14 pm ET
North American Galvanizing & Coatings Director John H. Sununu Sells 96,266 Shares.
The SEC form 4 with that information was out on May 4 and it didn't prevent the stock from rising. Maybe he wanted to buy a new house, or give one to a child of his as a marriage present, who knows? Many times insiders sell shares just because they want the money, not because of any fundamental problem with the company. They're always receiving new shares anyway, because of the options compensation/motivation plans.
For example, another director, Joseph Morrow, owns 1.72 million shares of NGA (there are just 8.17 million shares issued and outstanding).
Today is going to be interesting, the candlestick theory says the stock will probably head down, because the candle on the chart below is really bearish, but fundamental analysis says that, despite the huge bull run, the stock is still undervalued, so it should continue to rise. Which theory is going to win this short term battle?
I don't know, but over the longer term, fundamental analysis always wins. As I wrote previously NGA will probably earn something between $1.10 and $1.20 EPS in full year 2007, so it is trading at a forward earnings multiple of just about 11.1. That's too cheap. I say it will trade at 15 times forward earnings over the next few months. That translates into $17.25 price per share. That's where I plan to take profits on NGA and I'll ignore all short term gyrations.
I'll continue holding NGA.
Wow, NGA's behavior yesterday was truly amazing. Look what I wrote over the previous update:
QuoteToday is going to be interesting, the candlestick theory says the stock will probably head down, because the candle on the chart below is really bearish, but fundamental analysis says that, despite the huge bull run, the stock is still undervalued, so it should continue to rise. Which theory is going to win this short term battle?
I don't know, but over the longer term, fundamental analysis always wins.
Short term traders started selling this stock because it ran up so much so it was "due for a pullback", disregarding fundamentals, but they were wrong, because when the stock started going down fundamental players saw great value and bid the stock up.
I have nothing to add or change to what I said yesterday:
QuoteAs I wrote previously NGA will probably earn something between $1.10 and $1.20 EPS in full year 2007, so it is trading at a forward earnings multiple of just about 11.1. That's too cheap. I say it will trade at 15 times forward earnings over the next few months. That translates into $17.25 price per share. That's where I plan to take profits on NGA and I'll ignore all short term gyrations.
I'll continue holding NGA.
Since your analysis is based on a 3-yr growth rate...isn't it safe to assume that $17 is optimal or i guess considered 'fair market value' in the 3rd year? in other words, why would you expect the $17 to happen anytime soon? just only trying to understand why it's valued at $17 now rather than later...
QuoteSince your analysis is based on a 3-yr growth rate...isn't it safe to assume that $17 is optimal or i guess considered 'fair market value' in the 3rd year?
No, the "fair market value" in the third year given by my valuation model for NGA is $33.57 (http://www.3stocksonfire.org/fundamental.model.php?ticker=NGA&portfolio=main), which is the final estimated share price.
Quotein other words, why would you expect the $17 to happen anytime soon?
Because, as I've been writing on this thread, the stock is so obviously undervalued at the current market price, when compared to its industry peers. It is a somewhat different reasoning of the usual "follow the model" strategy, that's why I called it "performance boost", not just over the long term, but right here, right now (you can check this over the initial analysis and first updates on this thread).
Quotejust only trying to understand why it's valued at $17 now rather than later...
Because Q1 2007 EPS was $0.28 compared to $0.13 in the year ago period, which leads to a reasonable and safe estimate of about $1.15 EPS for the full year of 2007. At $14.6 the stock is trading with a forward earnings multiple of $14.6/$1.15 = 12.7, and that is outrageously cheap for a company that is growing earnings by 100% or more, don't you think?
I say the stock should trade at an earnings multiple of at least 15, immediately. The only thing that makes it so hard to understand is the speed at which the stock price is rising, without any stop for a breather. But, seriously, why should it stop if the fundamental value is obviously superior?
I'll maintain my trading plan of taking profits at $17.25.
NGA has a history of going for a few days after earningss come out and is run up. It always goes down after till the next earnings release. I am out at $13.50
Quote from: yukiii on May 10, 2007, 11:21:24 PM
NGA has a history of going for a few days after earningss come out and is run up. It always goes down after till the next earnings release. I am out at $13.50
How come you're out at $13.5? You said the stock was no good when I initially recommended it. If you're going to post the trades you make, do it timely and accurately, or not at all. Thank you.
With the general market breaking down as severely as it did, people holding fat profits in NGA bailed for the exit door, thinking "at least here I'm going to make good money to offset the losses I had elsewhere". I know this course of action, I've done it myself in the past, when I traded less intelligently.
NGA's fundamental value is superior, everybody that makes a few calculus sees that, or else the stock wouldn't have come up so much and so fast as it did. Now there's some profit and loss taking to make, the inevitable consolidation phase, but then NGA will move towards its fundamental value, which I currently calculate at $17.25 (more over the longer term (http://www.3stocksonfire.org/fundamental.model.php?ticker=NGA&portfolio=main)).
I'll keep holding NGA.
Never said i didn't like it, just that your value was off. I said value was $13.50 not $21.00
Good call on the buy and timing, but not a stock to hold.........
Quote from: yukiii on May 11, 2007, 03:26:18 AM
Never said i didn't like it, just that your value was off. I said value was $13.50 not $21.00
Good call on the buy and timing, but not a stock to hold.........
Ok, I didn't thought you would buy stocks at $12 plus thinking the fair value is $13.5, but it looks like you do. Congrats on the nice short term trade :)
In 2006 NGA had EPS of $0.58. In Q1 2007, EPS was already $0.28 on a fully diluted basis, more than doubling from the Q1 2006 EPS of $0.13. Therefore I expect something like $1.1 to $1.2 EPS for the full year 2007.
I believe the Street is in awe with this company because of its immense pricing power. The main raw material it uses (zinc) was up 57% over the last 12 months, but the company raised the prices of its services even more than that without any cooling of demand. This tells me NGA will be even more profitable if $zinc declines, because I'm sure they won't be so fast cutting prices as they were about raising them.
At $14.4, NGA is still trading at 12.5 times estimated 2007 earnings. I say that without a doubt NGA will trade at least at 15 times 2007 EPS, that is, at $17.25, but in fact it should trade a lot higher, because a company that is growing earnings by more than 100% a year can't be valued at just 15 times earnings.
I'm not very interested in owning a galvanizing company for the long term, and that's why I plan to take profits when the stock reaches a more acceptable valuation of 15 times forward earnings. The trading plan remains: take profits at $17.25 if you get the chance, or else keep holding and waiting.
David, any idea around which date earnings will be announced?
Quote from: Se7en on May 13, 2007, 06:58:39 PM
David, any idea around which date earnings will be announced?
Q1 earnings were already released, in April 30, 2007. If you're talking about Q2, I would say earnings will be published around August 15.
I'm sorry, wrong thread, this was meant to be for the GOAM thread! :-[
Yesterday's high was $15.95, so $17.25 doesn't seem all that far away now, does it? NGA ended up 5.9% yesterday on another strong volume day of 1.07 million shares traded. I'll keep the plan of taking profits around $17.25 if I get the chance, otherwise I'll keep holding the stock.
Hey guys long time no speak ;)
North American Galvanizing & Coatings Announces a 3 for 2 Stock Split Effected Through a 50 Percent Stock DividendLast update: 5/15/2007 9:04:00 AMTULSA, Okla., May 15, 2007 /PRNewswire-FirstCall via COMTEX/
-- North American Galvanizing & Coatings, Inc. (NGA), a provider of hot-dip galvanizing and coatings services, announced today at its annual shareholders meeting, that on May 14, 2007 its Board of Directors declared a 3 for 2 stock split of its common stock in the form of a 50% stock dividend. The stock dividend is payable on June 8, 2007 to shareholders of record as of May 25, 2007, with a broker's cut-off date of June 1, 2007. The stock dividend entitles each shareholder of record as of May 25, 2007 to receive one share of common stock for each two shares then owned. Any fractional shares resulting from the stock split will be paid in cash based on the closing market price of the common stock on the record date. Mr. Ronald J. Evans, President and Chief Operating Officer of North American Galvanizing & Coatings, Inc., said, "This 3 for 2 stock split reflects our confidence in the long-term prospects of the Company. The stock split should allow our stock to be more accessible to a broader range of investors and to improve shareholder liquidity."
QuoteHey guys long time no speak ;)
True, I sometimes see you reading, but you're not writing lately. I hope everything is well with you my friend, someday I'll visit you at Perth, someday ...
• North American Galvanizing & Coatings Announces a 3 for 2 Stock Split Effected Through a 50 Percent Stock Dividend (http://biz.yahoo.com/prnews/070515/aqtu124.html?.v=3)
PR Newswire (Tue 9:04am)
This 2 for 3 stock split doesn't change the company's value at all, but it will perhaps give it an additional boost to kiss my $17.25 short term target and selling point (the word "dividend" always attracts a lot of naive buyers). We'll see.
Nice to see you Aussie ;)
David thanks for your fast reply on thesenews .
first when I saw the news and the stock strarted to retreat at the open I thought it will be bad news and that means increase in outstanding shares # just like dilution ;D
you made it clear
Thanks for the great pick David.
Quote from: Garoh on May 15, 2007, 09:41:44 AM
David thanks for your fast reply on thesenews .
first when I saw the news and the stock strarted to retreat at the open I thought it will be bad news and that means increase in outstanding shares # just like dilution ;D
you made it clear
No, a stock split doesn't mean dilution. In this case after the ex-dividend date the stock price will go down by about 33.33% and we'll receive 1 share for each two held. The company isn't selling new shares, it is giving them, to improve liquidity.
As far as I'm concerned this thing wasn't needed ... but it is really irrelevant.
Quote from: ygtrdr on May 15, 2007, 09:42:34 AM
Thanks for the great pick David.
You're welcome ygtrdr :)
The stock has been all over the map today, perhaps it is time for a pullback now. But I'll keep holding anyway, since $17.25 is my target, as I've explained previously (I'll probably have to change it due to the effect of the stock split if I hold the stock through it)
NGA down 8% today ... the idea of a stock split and the higher open dampened short term bullish momentum. Why split a $15 stock? Why not split it at $60, or $120, for example?
Anyway, it doesn't change anything from a fundamental standpoint, but it will probably take a bit longer for the stock to be trading at 15 times 2007 estimated earnings. What a shot in the foot from management.
As we've seen previously, the stock split news ...
• North American Galvanizing & Coatings Announces a 3 for 2 Stock Split Effected Through a 50 Percent Stock Dividend (http://biz.yahoo.com/prnews/070515/aqtu124.html?.v=3)
PR Newswire (Tue 9:04am)
... is a non event.
Now, the following comparison is of most interest:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=36876;image)
I my view a company with this kind of fundamental improvement (revenue growth of 52% and net income growth of 138%) can't trade at 12.5 times conservatively estimated forward earnings. I say that at least 15 times $1.15 2007 estimated EPS is warranted and that means $17.25 price per share. That's where I plan to take profits.
NGA still has wind on its wings. To be a shareholder of record in May 25 th and get one share for each two owned, I need to hold this stock at May 22, which is next Tuesday. But I'm not interested in the stock dividend, I believe the stock will fall more than 33% after the ex-dividend date, perhaps not in the first day, but over the next few weeks.
So, I'm changing my trading plan slightly:
1) Take profits around $17.25, that is, 10.4% higher than yesterday's close, or else,
2) Sell on Monday.
Stocks seem to perform pretty darn well when they get on this list:
That is my observation and opinion of course.
IBD's Top 200 Composite Stocks (5/17/07)
Thursday News-stand Edition
Stock: NGA
Rating: #3(unchanged by split announcement)
Composite Rating: 99
EPS: 99
RS: 99
Acc/Dis: A+
Quote from: wxmang on May 17, 2007, 04:05:30 PM
Stocks seem to perform pretty darn well when they get on this list:
That is my observation and opinion of course.
IBD's Top 200 Composite Stocks (5/17/07)
Thursday News-stand Edition
Stock: NGA
Rating: #3(unchanged by split announcement)
Composite Rating: 99
EPS: 99
RS: 99
Acc/Dis: A+
I thought IBD might soon begin touting it. I think I'm going to continue holding mine.
QuoteI thought IBD might soon begin touting it. I think I'm going to continue holding mine.
It would be nice if IBD could pump NGA to my target before the ex-dividend date. The stock still has two days to rise 14%, not impossible.
NGA published the following press release yesterday:
• North American Galvanizing & Coatings, Inc. Louisville Facility Earns Two 'Safety Awards' (http://biz.yahoo.com/prnews/070517/aqth144.html?.v=1)
PR Newswire (Thu 5:41pm)
Although the news doesn't have financial impact, it may help to give some more publicity to the stock, which undoubtedly is worth more than the current price.
I'll keep my trading plan:
Quote1) Take profits around $17.25, or else,
2) Sell on Monday.
David, the ex-dividend date is Wednesday 23rd, shouldn't you hold until next Tuesday?
Wait a minute, I remember last year on IBCX board, here it is: http://www.nasd.com/web/groups/rules_regs/documents/notice_to_members/nasdw_003997.pdf
essentially it says that the ex-dividend date for a stock dividend that is 25% or more always falls on the next business date after payable date. Which means we won't see NGA traded 2/3 on May 23rd...
Looks like we'er gonna be around 17 on Monday :)
Standing by....ready to short :o
QuoteDavid, the ex-dividend date is Wednesday 23rd, shouldn't you hold until next Tuesday?
Good point realcoolhead, the stock will adjust downward only on Wednesday, I can hold on Monday and sell on Tuesday by the close.
QuoteWait a minute, I remember last year on IBCX board, here it is: http://www.nasd.com/web/groups/rules_regs/documents/notice_to_members/nasdw_003997.pdf
essentially it says that the ex-dividend date for a stock dividend that is 25% or more always falls on the next business date after payable date. Which means we won't see NGA traded 2/3 on May 23rd...
Good memory realcoolhead, but I believe that rule only applies to Nasdaq, OTCBB and PK stocks, and NGA is an AMEX traded stock, so I believe the rule doesn't apply to NGA.
Quote from: 422fwhp on May 19, 2007, 10:25:34 AM
Standing by....ready to short :o
Short when, before or after the ex-dividend date? Good luck on your short 422fwhp, but wouldn't you rather short something less bullish and less undervalued?
Again, I'm changing the trading plan slightly:
1) Take profits at $17.25
2) Take profits on Tuesday
NGA's trading plan was made long ago and today is the conclusion of it. I'm going to make just a slight change:
1) Take profits between $17 and $17.25 if you have the chance, or else,
2) Sell just before 2 pm ET.
I still haven't decided whether to sell or not. The stock did debut at #5 on IBD's 100 list, but after the split it will have to come back off after it falls back below $15. Hmm.
I really wish they weren't doing this split.
Quote from: BigSully1 on May 22, 2007, 12:52:48 PM
I still haven't decided whether to sell or not. The stock did debut at #5 on IBD's 100 list, but after the split it will have to come back off after it falls back below $15. Hmm.
I really wish they weren't doing this split.
its better to short near the top then the bottom
Quote from: BigSully1 on May 22, 2007, 12:52:48 PM
I still haven't decided whether to sell or not. The stock did debut at #5 on IBD's 100 list, but after the split it will have to come back off after it falls back below $15. Hmm.
I really wish they weren't doing this split.
Unfortunately it didn't go as high as I would like in the morning ... I sold it when it started turning negative on the session. The problem with holding today is, even if you sell tomorrow you'll keep holding the stock (at least one third of your position) and you won't be able to sell it even if "something happens", because you won't have your third share until June 8th.
Like you, I wish they didn't make this split, it's pretty annoying.
Quote from: nullzero on May 22, 2007, 01:06:22 PM
Quote from: BigSully1 on May 22, 2007, 12:52:48 PM
I still haven't decided whether to sell or not. The stock did debut at #5 on IBD's 100 list, but after the split it will have to come back off after it falls back below $15. Hmm.
I really wish they weren't doing this split.
its better to short near the top then the bottom
Null, I was talking about selling my long position, not shorting it. i wouldn't even think about shorting it. I will likely hold it now unless it approaches $17 again before the close.
David, I still doubt that it will be treated like a cash dividend ... but we will see tomorrow. ;)
Quote from: David Randolph on May 22, 2007, 01:11:55 PM
Quote from: BigSully1 on May 22, 2007, 12:52:48 PM
I still haven't decided whether to sell or not. The stock did debut at #5 on IBD's 100 list, but after the split it will have to come back off after it falls back below $15. Hmm.
I really wish they weren't doing this split.
Unfortunately it didn't go as high as I would like in the morning ... I sold it when it started turning negative on the session. The problem with holding today is, even if you sell tomorrow you'll keep holding the stock (at least one third of your position) and you won't be able to sell it even if "something happens", because you won't have your third share until June 8th.
Like you, I wish they didn't make this split, it's pretty annoying.
QuoteDavid, I still doubt that it will be treated like a cash dividend ... but we will see tomorrow. ;)
What do you mean realcool, you're expecting to receive 1 share for every two held and the stock not to go down 33% tomorrow? Why?
Thanks :)
I think it will be just like a normal split, meaning "nothing" will happen tomorrow ... you will get 1 for 2 on the payable date. But I could be wrong. :D
Quote from: David Randolph on May 22, 2007, 02:00:40 PM
QuoteDavid, I still doubt that it will be treated like a cash dividend ... but we will see tomorrow. ;)
What do you mean realcool, you're expecting to receive 1 share for every two held and the stock not to go down 33% tomorrow? Why?
Thanks :)
A side question: David, do you not like TZOO anymore? >:D
Quote from: David Randolph on May 22, 2007, 02:00:40 PM
QuoteDavid, I still doubt that it will be treated like a cash dividend ... but we will see tomorrow. ;)
What do you mean realcool, you're expecting to receive 1 share for every two held and the stock not to go down 33% tomorrow? Why?
Thanks :)
QuoteI think it will be just like a normal split, meaning "nothing" will happen tomorrow ... you will get 1 for 2 on the payable date. But I could be wrong. :D
So, you expect the stock to go down 33% just on the payable date. But, since tomorrow's buyers won't have the right to the new share, I guess it should go down tomorrow. We'll see ... anyway, I already booked my 36% profit, not bad :)
QuoteA side question: David, do you not like TZOO anymore? >:D
I like TZOO, I'll buy it sometime between now and the next quarterly earnings release.
QuoteI think it will be just like a normal split, meaning "nothing" will happen tomorrow ... you will get 1 for 2 on the payable date. But I could be wrong. :D
You were absolutely right realcoolhead (as always). I hope the stock hits $17.25 or more today, you deserve it. I wonder what I've seen wrong on this dividend/split issue ??? ... I would like to know because it can be useful if a similar situation arises in the future. Did you talk to your broker or something?
Thanks and congrats :)
$17.25 now. :)
Quote from: BigSully1 on May 23, 2007, 10:12:52 AM
$17.25 now. :)
Selling off now, after touching the 15 times forward estimated earnings. It would have been a perfect trade if I held it one more day ... arghh. Anyway, 36% profit was good enough.
I expect a pre-split registering day run on Friday. So I'm still holding.
Quote from: David Randolph on May 23, 2007, 11:23:19 AM
Quote from: BigSully1 on May 23, 2007, 10:12:52 AM
$17.25 now. :)
Selling off now, after touching the 15 times forward estimated earnings. It would have been a perfect trade if I held it one more day ... arghh. Anyway, 36% profit was good enough.
You're right David, excellent trade you provided, but I'm going to be just a bit greedier on it, hopefully it'll work out. Thanks.
QuoteYou're right David, excellent trade you provided, but I'm going to be just a bit greedier on it, hopefully it'll work out. Thanks.
I think that's the way to go BigSully1, always hope your profits will grow more and fear your losses will grow more too. Good luck :)
QuoteI expect a pre-split registering day run on Friday. So I'm still holding.
Friday? Why? Thanks :)
I just think that 25% dividend threshold rule should apply to NYSE/AMEX too.
Besides, it would be very unreasnable if your imagined scenario would happen: you wanted to sell all but 1/3 of shares are yet to come :o .
I guess in this case, record date only has something to do behind the scenario, like if I buy NGA now, 1/3 of the shares are physically somewhere else even though I have ownership etc... But I am just guessing. >:D
Quote from: David Randolph on May 23, 2007, 09:50:13 AM
QuoteI think it will be just like a normal split, meaning "nothing" will happen tomorrow ... you will get 1 for 2 on the payable date. But I could be wrong. :D
You were absolutely right realcoolhead (as always). I hope the stock hits $17.25 or more today, you deserve it. I wonder what I've seen wrong on this dividend/split issue ??? ... I would like to know because it can be useful if a similar situation arises in the future. Did you talk to your broker or something?
Thanks and congrats :)
QuoteI just think that 25% dividend threshold rule should apply to NYSE/AMEX too.
Besides, it would be very unreasnable if your imagined scenario would happen: you wanted to sell all but 1/3 of shares are yet to come :o .
I guess in this case, record date only has something to do behind the scenario, like if I buy NGA now, 1/3 of the shares are physically somewhere else even though I have ownership etc... But I am just guessing. >:D
realcoolhead was right on this dividend issue (as in all the rest :)).
Fundamentally everything is roughly the same as when I initially bought NGA. I took a 36% profit on the stock and now it is almost at the price I initially bought (well, it is 8% higher now).
The stock split issue is behind us. And the stock has a strong support at the $8.50 area, which yesterday was complemented by the 50 days SMA support.
NGA is now trading at 11 times forward earnings, implied by an extrapolation of the $0.19 EPS it earned in Q1 2007 (split adjusted). Its industry average trades at 19.85 times earnings. Moreover NGA is growing a lot faster than its industry average (52.5% for NGA vs 16.3% for the industry (http://finance.yahoo.com/q/co?s=NGA)).
The fact that zinc prices came off recently bodes well for margin expansion at NGA, because NGA uses mainly zinc for its galvanizing and coating services.
So, fundamentally I really like the stock and it seems to be at a sweat spot to buy from a technical standpoint too.
The Trading Plan is:
Buy NGA, 6.66% of capital.
i dont want to bash this stock
but its a better short than long
the MACD HIst didnt turn yet in the weekly
a close below MA 50 which is near (daily not weekly chart)
no reversal candle in the daily...no signs for a trend back up
a see 6 dollar coming
thanks i am probably shorting.
i told you this thing never looked bullish
Quote from: ket1390 on June 27, 2007, 08:49:30 AM
i dont want to bash this stock
but its a better short than long
reminds me at silc when it was 20 dollar excactly the same
the MACD HIst didnt turn yet in the weekly
a close below MA 50 which is near
a see 6 dollar coming
thanks i am probably shorting.
Lol, ok ket1390, that's fine by me :)
QuoteQuote from: David Randolph on June 27, 2007, 06:26:27 AM
QuoteI just think that 25% dividend threshold rule should apply to NYSE/AMEX too.
The stock split issue is behind us. And the stock has a strong support at the $8.50 area, which yesterday was complemented by the 50 days SMA support.
my techn indicator telling me MA 50 wont hold....and no reversal candle insight....with a ripe nasdaq this will fall together...maybe it s a double top pattern....if we close under 8.50...then i smell 6.00 $$
Quotemy techn indicator telling me MA 50 wont hold....and no reversal candle insight....with a ripe nasdaq this will fall together...maybe it s a double top pattern....if we close under 8.50...then i smell 6.00 $$
Yes, it may happen. I'm going to buy it at the open. Will you short it at the open or wait for technical confirmation?
Thanks :)
Quote from: David Randolph on June 27, 2007, 06:26:27 AM
QuoteI just think that 25% dividend threshold rule should apply to NYSE/AMEX too.
Besides, it would be very unreasnable if your imagined scenario would happen: you wanted to sell all but 1/3 of shares are yet to come :o .
I guess in this case, record date only has something to do behind the scenario, like if I buy NGA now, 1/3 of the shares are physically somewhere else even though I have ownership etc... But I am just guessing. >:D
realcoolhead was right on this dividend issue (as in all the rest :)).
Fundamentally everything is roughly the same as when I initially bought NGA. I took a 36% profit on the stock and now it is almost at the price I initially bought (well, it is 8% higher now).
The stock split issue is behind us. And the stock has a strong support at the $8.50 area, which yesterday was complemented by the 50 days SMA support.
NGA is now trading at 11 times forward earnings, implied by an extrapolation of the $0.19 EPS it earned in Q1 2007 (split adjusted). Its industry average trades at 19.85 times earnings. Moreover NGA is growing a lot faster than its industry average (52.5% for NGA vs 16.3% for the industry (http://finance.yahoo.com/q/co?s=NGA)).
The fact that zinc prices came off recently bodes well for margin expansion at NGA, because NGA uses mainly zinc for its galvanizing and coating services.
So, fundamentally I really like the stock and it seems to be at a sweat spot to buy from a technical standpoint too.
The Trading Plan is:
Buy NGA, 6.66% of capital.
David this is a good stock to invest in , but I don't recommand buying it now !
Look at the weekly chart it's very bad and will propably see $7 soon if I'm right :-X
try to hold until tomorrow
QuoteDavid this is a good stock to invest in , but I don't recommand buying it now !
Look at the weekly chart it's very bad and will propably see $7 soon if I'm right Lips Sealed
try to hold until tomorrow
Thanks for the advice, but I already bought Garoh.
Quote from: David Randolph on June 27, 2007, 09:40:37 AM
QuoteDavid this is a good stock to invest in , but I don't recommand buying it now !
Look at the weekly chart it's very bad and will propably see $7 soon if I'm right Lips Sealed
try to hold until tomorrow
Thanks for the advice, but I already bought Garoh.
Good luck David
I hope it shows strength today and go up :)
Quote from: ket1390 on June 27, 2007, 08:49:30 AM
i dont want to bash this stock
but its a better short than long
reminds me at silc when it was 20 dollar excactly the same
the MACD HIst didnt turn yet in the weekly
a close below MA 50 which is near (daily not weekly chart)
no reversal candle in the daily...no signs for a trend back up
a see 6 dollar coming
thanks i am probably shorting.
Stock is below the 50 days SMA support ket1390. Did you sell it short? Thanks.
selling short was a good idea ket1390...but I hope you covered at 10 am
:-)
Great pick David!
Quote from: Garoh on June 27, 2007, 09:51:07 AM
Quote from: David Randolph on June 27, 2007, 09:40:37 AM
QuoteDavid this is a good stock to invest in , but I don't recommand buying it now !
Look at the weekly chart it's very bad and will propably see $7 soon if I'm right Lips Sealed
try to hold until tomorrow
Thanks for the advice, but I already bought Garoh.
Good luck David
I hope it shows strength today and go up :)
It did ;D
Win a few, lose a few, but you keep on fighting 8)
Volume is pretty high for this time of the day and bulls are taking over control, as they should, since value is quite compelling here.
Quote from: David Randolph on June 27, 2007, 09:54:25 AM
Quote from: ket1390 on June 27, 2007, 08:49:30 AM
i dont want to bash this stock
but its a better short than long
reminds me at silc when it was 20 dollar excactly the same
the MACD HIst didnt turn yet in the weekly
a close below MA 50 which is near (daily not weekly chart)
no reversal candle in the daily...no signs for a trend back up
a see 6 dollar coming
thanks i am probably shorting.
Stock is below the 50 days SMA support ket1390. Did you sell it short? Thanks.
no...the day is no over yet we are in a sideway down channel no breakout yet....wait for the last 30min of the day and lets see which way it closes....probably in the channel....lets see i short it when close of day under 8.50...now at 8.80 looks like a bear trap
NGA $ 8.80
North American Galvanizing & Coatings Inc 0.19
Shares Short 1,412,400
Days to Cover (Short Ratio) 1.5
Short % of Float 17.86 %
Shares Short - Prior 921,400
Short % Increase / Decrease 53.29 %
nice call david. ;)
Back in NGA again. I come up with a Value of $12.80. Short term hold
Good timing David ;D
Hey I noticed on the stockonvideo.com
You are not holding selections long term, taking profits and selling your losers we need more of that here.
I'm in at 8.80 :)
today's action gave it a better look
Thanks for the compliments and suggestions :)
NGA reacted well to the $8.5 support and the ascending 50 days SMA, closing at $8.94.
I realize now that it isn't accurate to say Zinc prices are lower now, they're lower for the last couple of weeks, but not below Q1 2007, on average:
(http://www.stocksonvideo.com/forum/index.php?action=dlattach;attach=196;image)
Fortunately NGA is able to more than pass on the rise in zinc prices to its costumers:
«The company's ability to increase average selling prices above zinc cost increases had a favorable impact on operating income. The London Metals Exchange (LME) market price for zinc for the first quarter of 2007 averaged $1.57 per pound, compared to $1.02 per pound in the first quarter of 2006, representing a 54% increase. In the three-months ended March 31, 2007, average selling prices for galvanizing and related coating services were 55% higher than the prior year first quarter»
As I've written before, I call this "pricing power".
NGA is just a $109 M market cap. EPS has been growing through the roof:
(http://www.stocksonvideo.com/forum/index.php?action=dlattach;attach=197;image)
I'll keep holding NGA.
>:(Why the sell-off today! I needed a boost! Now I'm not so sure the 50 day will hold, we'll see at the end of day.
I see a bearish pattern for NGA.
$8.53 support is critical, a break of that would put the PPS in a nasty play.
Goodluck!
AZZ reported good earnings today. Does anyone think that this will help NGA today. I think it will. Also it looks as if the market will make a run today since premarket in the QQQQ's and the SPY are taking off. Yukii, are you still in NGA?
Quote from: mbaugh on June 29, 2007, 08:38:33 AM
AZZ reported good earnings today. Does anyone think that this will help NGA today. I think it will. Also it looks as if the market will make a run today since premarket in the QQQQ's and the SPY are taking off. Yukii, are you still in NGA?
I don't think yukiii will answer you that, but given AZZ's response to its strong quarterly earnings (http://biz.yahoo.com/prnews/070629/laf012.html?.v=101), showing the galvanizing industry continues to be red hot ...
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=38571;image)
... I would say that NGA is about to push up and eventually breakout on the upside, regardless of what chart readers say.
(ooppss, I'm on vacations, see ya 8))
Thanks David! ;D Enjoy your time off!
I think I saw a post for David ;D
Enjoy your vacation and come back strong ;)
Sorry everyone .. I bought into this today and crashed it for the rest of you! Probably should warn people when I am about to buy something so you can get out in time ;D ??? >:( ::)
I am the same one. What will you do? Hold or Sell? I am in at 8,80...
I had to talk, didn't I?
Absolutely hold in my opinion, the chart was asking for a shake out and the relative weakness versus AZZ should have been seen as bearish short term market action, not bullish (I was mistaken about the short term).
Anyway, the stock is trading at 10.5 times conservatively estimated 2007 earnings, so it is way undervalued here. I'll hold whatever happens to the chart, as I've been shaken out by false technical signals all too often lately.
The market will make everybody right, if given time, but only long term buyers will make real money out of the situation in my opinion.
Got to go, see ya :)
Quote from: ket1390 on June 27, 2007, 08:49:30 AM
i dont want to bash this stock
but its a better short than long
the MACD HIst didnt turn yet in the weekly
a close below MA 50 which is near (daily not weekly chart)
no reversal candle in the daily...no signs for a trend back up
a see 6 dollar coming
thanks i am probably shorting.
i told you randolph there was never a reversal on increased volume. you see the volume going down and down....and yesterday a sell off with more volume....6 dollar gap support coming. $$$$ >:D
Quotei told you randolph there was never a reversal on increased volume. you see the volume going down and down....and yesterday a sell off with more volume....6 dollar gap support coming. $$$$ >:D
Do you think so?
So you're short now, right? You told us you would sell the stock short if it were to break the $8.51 support level on close.
Ok, let's assume the stock indeed goes down to $6. If you sold it short, say, at $8.3, and cover it at $6, you'll earn 27% return on your money. I don't enter a position with such a small profit objective (of course, if it were a sure thing, I would do it, but I think it is far from a sure thing).
The risk to a short sale at this point is that, because the stock is undervalued, the market action was a false technical breakdown, and the stock will climb back above the previous support, now resistance in a matter of a few days. And then it won't stop there, it will move to breakout on the upside, above $12.
Why do I believe the latter is the case? Well, because sales in Q1 2007 rose 52% and operating income rose 112%. And NGA's main competitor, AZZ, said the following about the galvanizing services industry, referring to their quarter ended in May 31st:
«Revenues for the Company's Galvanizing Service Segment for the first quarter were $34.5 million,
an increase of 65 percent compared to the $20.9 million in the same period last year. Operating income improved 32 percent to $8.6 million. Revenues for the first quarter continue to be favorably impacted by pricing actions to offset increased zinc cost. Of the 65 percent increase in revenues, 28 percent was attributable to volume and 37 percent attributable to price. Our acquisition of Witt Galvanizing on November 1, 2006, accounted for 69 percent of the volume increase.»
«
The Galvanizing Services Segment achieved record setting revenues in the first quarter. Our operating results are reflective of strong market conditions and good price realization required to offset the increased cost of zinc. We are very pleased that the markets have been strong enough to absorb this level of price increases. The reduced volatility of zinc has not required us to significantly adjust our pricing levels from the third and fourth quarter of last year."»
NGA earned $0.16 per share from continuing operations in Q1 2007, and from what we see at AZZ, earnings will probably improve for the next few quarters. Say EPS will average $0.2 for the next three quarters, the company will earn $0.76 in 2007. So, the forward earnings multiple now is 10.6.
AZZ itself trades at 20 times its own EPS guidance for fiscal 2008:
«Mr. Dingus concluded, "Cost escalation recovery through pricing actions, expansion of domestic and international markets, and seeking out new product opportunities to further enhance our strategic position continue to be the focus and emphasis of our activities. Based upon the evaluation of information currently available to management, we are increasing our estimate of
FY2008 earnings to be within the range of $1.65 to $1.75 per diluted share and revenues to be within the range of $310 million to $320 million."»
AZZ's guidance reflects growth expectations, because in fiscal Q1 2008 they earned just $0.34.
I know what you're thinking: "but you're not listening to the chart, not listening to the market".
To that I would respond: "but you're not listening to the fundamentals, not seeing beyond the price on your screen".
Above all this specific discussion, I would say that I've learned that shorting stocks is a waste of time, and I'll never short a stock again, because of the unfavorable reward/risk ratio. I prefer to look for attractive long picks, even in a bear market. You can lose more than you have in a short sale, however, you can never make more than 100% (unless you use leverage, which I don't recommend), even when the stock goes down to zero (which is very rare).
From what I've seen (and suffered) with SILC, VPHM and NTES, where stocks were steadily going down
before very positive news and significant push ups, I conclude the chart knows little about the future.
How could the chart know? If somebody has inside information and acts on it he may end up in jail. No wise and rich man is willing to take that risk.
Well, I took some time off (from the time off ;D) to write about NGA because this was the stock of the Main Portfolio (http://www.3stocksonfire.org/3stocksonfire.php) that went down the most on yesterday's session. There isn't much to say when everything is fine, like JAKK just 1% or so from all time highs, TBSI, SNDA and ICOC pushing up almost 5% on the session.
See you tomorrow (I know it's the 4th of July, enjoy the holiday 8))
you should never forget this stock went up from 3 to 11 in 2 months...even if the company is good the chart needs a break...
David, NGA filed an 8k, do you think this is a positive or nothing at all in terms of affecting the company? It seemed like buying increased when it was posted. Also, from my past expereince the day before a holiday the market is easily manipulated due to the low volume.
http://biz.yahoo.com/e/070703/nga8-k.html
Thanks,
Mbaugh
Quote from: ket1390 on July 03, 2007, 10:56:13 AM
you should never forget this stock went up from 3 to 11 in 2 months...even if the company is good the chart needs a break...
You're right ket1390, applaud.
Anyway, if I get too concerned with the next 10%, up or down, I'll be less concerned about the big picture, that is, which way the next 50 to 100% will go? And that's what I need to know to profit.
Quote from: mbaugh on July 03, 2007, 01:27:12 PM
David, NGA filed an 8k, do you think this is a positive or nothing at all in terms of affecting the company? It seemed like buying increased when it was posted. Also, from my past expereince the day before a holiday the market is easily manipulated due to the low volume.
http://biz.yahoo.com/e/070703/nga8-k.html
Thanks,
Mbaugh
Hmm, I don't think that 8-K file has any relevancy for the stock price, at least not from a medium term fundamental standpoint. But it may have helped to push some people to "just let me check it out NGA" and decide it was a good buy, I don't know.
What I do know is that NGA is dirty cheap at current levels. The company made $0.16 in Q1 2007 and Q2 will probably be even better, according to what AZZ said about the galvanizing market conditions in its March - May quarter earnings release. I see $0.76 EPS for the full year of 2007, and that means a stock trading at 10.4 times earnings. AZZ for example trades at 20 times earnings (and NGA is growing faster).
EPS just doubled in Q1 2007 compared to the previous quarter. And what if it doubles again this quarter, what do you think it will happen to the stock? And what if it goes back down to the Q4 2006 level? Well, I don't think that is a possibility, because we know the market is even stronger than in Q1 2007.
I believe the recent technical breakdown is just short term noise and the stock will react positively going forward, after touching the 50% Fibonacci retracement level you see on the chart below. I'll continue holding NGA.
QuoteI believe the recent technical breakdown is just short term noise and the stock will react positively going forward, after touching the 50% Fibonacci retracement level you see on the chart below. I'll continue holding NGA.
True for today, at least.
I can understand why Galvanizing services are in such a high demand, look at the best performing industry of the DJ industry groups has been doing YTD:
DJ Heavy Construction Index (http://www.marketwatch.com/tools/industry/indchart.asp?bcind_ind=2357&bcind_period=3mo)
NGA should double just based on existing fundamental numbers. But I expect growth going forward.
I'll continue holding NGA with strong hands, despite the "bearish" chart.
David, despite the bearish chart on NGA, I compare this company to the likes of TBSI since they both resemble strong fundamentals. I just hope that there is not something that we don't know about since the stock is heavily shorted and keeps breaking support lines. My belief is that people looked at the stock split as a negative and the shorts took advantage of the split also. Last year NGA reported Q2 earnings on July 30. If that's the case this year then we are only weeks away and i would hope that we get a boost before then. Also, Alcoa reports earnings on Monday, I'm hoping this would help jump start NGA's move upward.
Thanks,
Mbaugh
QuoteDavid, despite the bearish chart on NGA, I compare this company to the likes of TBSI since they both resemble strong fundamentals.
Yes, the situation looks similar. At one point I've been losing 12.6% in TBSI, but ended up taking a 34% profit in five weeks. I expect NGA to do even better.
QuoteI just hope that there is not something that we don't know about since the stock is heavily shorted and keeps breaking support lines.
I think there are a lot of shorts (15% of float) because the stock has been up so much and the chart looks like a confirmed double top.
QuoteMy belief is that people looked at the stock split as a negative and the shorts took advantage of the split also.
Maybe, but as you know, the split doesn't mean anything from a fundamental standpoint, so it shouldn't have an effect on the stock price (at least not one that lasts).
QuoteLast year NGA reported Q2 earnings on July 30.
I confirm that.
QuoteIf that's the case this year then we are only weeks away and i would hope that we get a boost before then.
It would be nice, but not a necessity. We'll see what happens over the next three weeks, I'm expecting the stock to claw back above the $8.51 resistance level.
QuoteAlso, Alcoa reports earnings on Monday, I'm hoping this would help jump start NGA's move upward.
Well, the two companies are somewhat related, but Alcoa is a $36 B market cap, NGA is a $96 M market cap. Alcoa is primarily aluminum production, NGA is galvanizing & coating services (mostly of steel). At first sight I wouldn't consider that AA's earnings may have an impact on NGA's share price, but we'll see what happens.
QuoteThanks,
Mbaugh
You're welcome Mbaugh :)
I've derived my valuation model for NGA, taking into account existing fundamental trends, and got this:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=38733;image)
We'll go over the explanation for the four variables of the model over the next few updates.
Just one more thing, Q2 2006 was a lot stronger than Q1 2006, so the very strong Q1 2007 wasn't due to seasonality, and from what AZZ said about the galvanizing market, everything points to an even better Q2 2007 for NGA when compared to Q1 2007.
I'll continue holding NGA.
I think NGA cleaned up almost all weak hands and it is ready to climb back above the $8.51 key resistance level. Look at the volume increase to 647,600 shares, beautiful.
Even more beautiful is what AZZ has been doing after reporting its "not so great" results:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=38786;image)
AZZ now trades at 111 times its latest quarterly EPS. NGA trades at 44 times. In annualized terms, AZZ trades at 27.75 times EPS and NGA at 11 times EPS.
There's not a single doubt in my mind that NGA will push higher and breakout above its all time high at $11.63.
I've already displayed the bull case for NGA, now let's see who wins the bull/bear battle roughly between $7.5 and $8.5.
I bet on the bulls and will keep holding the stock.
David, just curious, does NGA's chart resemble a bull-flag pennant formation?
Quote from: mbaugh on July 11, 2007, 09:54:26 AM
David, just curious, does NGA's chart resemble a bull-flag pennant formation?
Hi mbaugh, nice talking to you :)
Well, I must say that I have a few books that deeply explain the most intricate technical patterns, inclusively the flag and pennant patterns. However, those books are in my living room shelves and I don't open them for a long time ... I feel they didn't teach me anything of value, you know?
But, from what I can recall, I think those patterns happen in ascending short term trends, and NGA has a descending short term trend. I think NGA's pattern is more of a falling wedge pattern.
My advice is for you not to direct your curiosity to that space of the financial literature. I've lost several years reading and thinking about them. I wish I didn't.
I prefer to think that AZZ, which is NGA's closest competitor in the galvanizing market, closed at a new all time high today:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=38858;image)
Now consider AZZ's long term chart:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=38859;image)
The stock quadrupled in less than two years. It goes to show the strength in the galvanizing services market.
NGA's fundamentals are a lot more attractive than AZZ's, in my view. The fundamental setup is getting stronger and stronger, against the "bearish chart". I believe that ultimately value will prevail and NGA will shoot towards new highs above $12 over the next few months (or else in one single day gap up, that can be the case too).
I'll continue holding NGA with strong hands.
My Metastock is not giving me a chart for NGA, but I'm sure you saw how the fight between the bearish technicals and the extremely attractive fundamentals ended: NGA rallied 14% on the day :o
Now, there's one more bearish technical view, I guess it was Terliso that posted it, unifying the recent highs and coming up with a short term "important" technical resistance. Well, I'll draw it next Tuesday when my computer is fixed.
But I'll keep fully concentrated on the fundamentals and my expectation of a breakout above $12, since the company's fundamental value is, according to my valuation model, something like $14.56 (http://www.3stocksonfire.org/fundamental.model.php?ticker=NGA&portfolio=main).
I'll keep holding NGA.
David, your exit price of 14.56 seems too low since NGA is growing. At today's fair value I believe NGA should already be a 13 - 14 dollar stock. On the next quarter earnings release, if they release stronger than expected numbers, will you still hold NGA if it surpasses your exit price. I have a feeling NGA will surpass $14 and hit new highs after the earnings release which I believe will be around the end of July. I called the company and someone in investors relation said that earnings will probably be released around the same time it was last year which was July 31. My guess is Monday July 30.
Quote from: mbaugh on July 13, 2007, 11:24:36 AM
David, your exit price of 14.56 seems too low since NGA is growing. At today's fair value I believe NGA should already be a 13 - 14 dollar stock. On the next quarter earnings release, if they release stronger than expected numbers, will you still hold NGA if it surpasses your exit price. I have a feeling NGA will surpass $14 and hit new highs after the earnings release which I believe will be around the end of July. I called the company and someone in investors relation said that earnings will probably be released around the same time it was last year which was July 31. My guess is Monday July 30.
Thanks for your input mbaugh :)
You know, if fundamentals improve I'll push my estimates higher.
And that can certainly be the case, since, for example, I have just 25% revenue CAGR in my valuation model and revenues in Q1 2007 when compared to Q1 2006 grew 52%.
But for now I'll leave it as it is, because 25% is the historical revenue growth rate.
NGA is certainly providing a nice "performance boost", again ;)
(no chart available :-[)
Chart :)
Quote from: Amarens on July 16, 2007, 09:08:38 AM
Chart :)
Thanks Amarens :)
I'll also have to leave a StockCharts chart. NGA has been up with strong volume, and fundamentals are very attractive. I'll keep holding the stock.
It seems NGA reacted negatively to a short term descending resistance (which I can't draw very well on the StockChart's chart - I need to pay Ramsburg another visit, several things not working well).
I guess yesterday's 6.8% fall was due to profit taking, because the stock had been up 36% in about one week.
I'll continue holding NGA.
I don't think NGA's descending channel (which actually is a bullish consolidation pattern) will last much longer, look what AZZ, its main competitor, is doing:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=39093;image)
And NGA is much more attractive from a fundamental standpoint. I now have Metastock working full power :)
I'll keep holding NGA.
Switch to Nasdaq
http://biz.yahoo.com/prnews/070719/lath014.html?.v=101
Quote from: BigSully1 on July 19, 2007, 09:02:54 AM
Switch to Nasdaq
http://biz.yahoo.com/prnews/070719/lath014.html?.v=101
Thanks for posting the news BigSully1, it wasn't out when I made the daily update. It's a good move, from the AMEX to the Nasdaq. Next is the NYSE, where AZZ is traded ;)
NGA opened with a big gap up, but the descending resistance prevent it from flying any further (and the move to the Nasdaq doesn't mean anything from a fundamental standpoint).
But, as we've been discussing, the fundamental landscape warrants a much higher share price, so I believe it is just a matter of time before the stock breaks out above the descending channel on the chart below.
I'll keep on holding NGA.
David, the updated short interest data was released and I was surprised to see that it had increased to 1,492,485 from 1,412,379. These numbers were updated on July 13. I don't understand why such high short interest in such a low market cap stock especially right before earnings. It makes me wonder if they know something about the earnings beforehand. The same applied to CIMT, right before earnings the short interest grew and they were right. It doesn't make sense to short NGA unless you know something. What's your take on this?
Thanks,
Mbaugh
Quote from: mbaugh on July 20, 2007, 09:06:48 AM
David, the updated short interest data was released and I was surprised to see that it had increased to 1,492,485 from 1,412,379. These numbers were updated on July 13. I don't understand why such high short interest in such a low market cap stock especially right before earnings. It makes me wonder if they know something about the earnings beforehand. The same applied to CIMT, right before earnings the short interest grew and they were right. It doesn't make sense to short NGA unless you know something. What's your take on this?
Thanks,
Mbaugh
My take is the short interest rose because the chart was bearish. Technical & momentum traders sold the stock short ... still no motive to cover, only when the stock breaks out above the descending channel resistance level, which today stands at $10.03. I think it is just a matter of time before this happens, shorts don't know what they're doing.
Thanks, I feel better! ;D
David, Since we had some bad expereinces with holding stocks thru earnings, do you feel that NGA could have a weaker quarter due to the slow down in the US housing sector? I'm trying to find some info on the commerical side of the business as well. The reason I'm asking is because we were so convinced about CIMT and I'm trying to avoid the same with NGA. However, my gut tells me NGA will be different and to hold thru earnings which I believe to be sometime during the last week of July. It just amazes me as to why so many are betting against NGA since the short interest is at an all time high. I wonder if there's any info in the sec filings or news articles stating the strengh of the business. Just thought we ought to look into this further to see if we can find any holes. Thanks, Mbaugh
QuoteDavid, Since we had some bad expereinces with holding stocks thru earnings, do you feel that NGA could have a weaker quarter due to the slow down in the US housing sector?
I don't think so, because of two reasons:
1) NGA's end costumers are in the following fields:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=39173;image)
2) AZZ, which is NGA's largest competitor in the galvanizing industry, said the following in June 29, 2007:
«The Galvanizing Services Segment achieved record setting revenues in the first quarter (ended May 31st, 2007). Our operating results are reflective of strong market conditions and good price realization required to offset the increased cost of zinc. We are very pleased that the markets have been strong enough to absorb this level of price increases.»
QuoteThe reason I'm asking is because we were so convinced about CIMT and I'm trying to avoid the same with NGA.
I wasn't convinced about CIMT delivering a good 1st quarter, as I saw risks coming from seasonality. I'm just convinced about CIMT over the long term, not that quarter. But I welcome your push to go as far as we can get to increase or decrease our confidence in NGA.
QuoteHowever, my gut tells me NGA will be different and to hold thru earnings which I believe to be sometime during the last week of July.
There's still no indication from the company about the earnings release date, but I also figure it will be around July 30th, because in the 1st quarter they reported in April 30th.
QuoteIt just amazes me as to why so many are betting against NGA since the short interest is at an all time high.
Indeed, the short interest rose a lot over the last couple of months, from 51,388 shares to 1,412,379 now:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=39174;image)
Short interest is now 11.53% of the # of shares outstanding, which I don't consider all that much. I don't think shorts know more than I do about NGA, they just like to sell short stocks that ran up a lot and seem to be breaking back down.
If NGA makes a bullish breakout after earnings, as I think it will, it will be nice in providing an example as to a high or low short interest doesn't mean anything for the future. We'll see, please remind me of this sentence on the post earnings period.
QuoteI wonder if there's any info in the sec filings or news articles stating the strengh of the business.
Like with any other company, NGA has risks stated in its 10-Q forms, mainly related with the environment and possible damages because of litigation. But nothing related to the strength of the business, like in TZOO's case. Unless shorts know there will be a lawsuit or something similar that affects NGA, they're probably wrong.
QuoteJust thought we ought to look into this further to see if we can find any holes. Thanks, Mbaugh
It's always a good idea Mbaugh, thanks :)
We'll keep studying NGA, I'll keep holding.
i hold never a stock through earnings...its a risky gamble...diet, cimt for example lost 20-30% or more immediately...why not learning from mistakes. ???
A tendency of holding none or otherwise holding all through earnings is perhaps less damaging than holding some and getting rid of the others. But again, that's only based on a probability factor. NGA seems to be strong in its business. With CIMT and DIET I guess we just relied on that scarse information at hand.
Hi Ket,
I've done very well holding ISRG through earnings since 2004 ( with the exception of one quarter )..I guess it just depends upon the stock..did get hit hard on CIMT, though.
Dory99
Quote from: Dory99 on July 23, 2007, 01:26:03 AM
Hi Ket,
I've done very well holding ISRG through earnings since 2004 ( with the exception of one quarter )..I guess it just depends upon the stock..did get hit hard on CIMT, though.
Dory99
hi dory yeah you did well with isrg it went up big....now 199.84 crazy...great...i generally dont like to hold for earnings because i cant controll it which way it goes....as i am a pivot trader.....trading with tight stops (2%) mostly....i am up 95% in 19 month with this tactic.
Quote from: Dory99 on July 23, 2007, 01:26:03 AM
Hi Ket,
I've done very well holding ISRG through earnings since 2004 ( with the exception of one quarter )..I guess it just depends upon the stock..did get hit hard on CIMT, though.
Dory99
Congrats with ISRG Dory99, that stock had an exceptional run up :)
CIMT's time will come, we'll just have to be (very) patient.
In my view there are two problems with short term trading:
1) The hot hand/cold hand phenomenon
2) Those strategies don't have
scalability. I'm interested in a strategy that can be used with $10 K as well as with $100 M.
Coming back to NGA, there wasn't anything new yesterday, the stock continues to struggle with its descending channel but I think that, because of the attractiveness of the fundamentals, bulls will prevail.
I was somewhat surprised to see NGA down 5.6% yesterday (not all that much because the S&P 500 was down 2% plus on the session), but at the same time pleased, from a technical perspective, that the stock held $8.64 on a closing basis. Volume also picked up some.
I firmly believe NGA will ultimately breakout above the short term descending channel (which is a bullish continuation pattern), so I'll keep on holding NGA.
NGA had a nasty close yesterday, below some short term support levels. The market seems to be ignoring specific fundamentals of stocks and instead concentrating on macroeconomic issues. I've never seen a bear market start with so many worries in the air, it usually starts when everybody is optimistic about the future.
It has been a tough ride over the past few days, and today is setting up to be pretty ugly too, but focusing on the stocks themselves and thinking if the long term bull market will continue or not, I must say that I like my stocks and I believe the long term bull market will continue. I'll keep holding NGA.
I didn't thought NGA would make this type of bottom, but I do think it is very close to hitting bottom. Fundamentals are very attractive, but people sold everything where they had a profit to make.
the weekly chart
http://stockcharts.com/h-sc/ui?s=NGA&p=W&b=5&g=0&id=p39290296546
6 still my target...would be good bounce off area from there...
Quote from: ket1390 on July 27, 2007, 05:59:17 PM
the weekly chart
http://stockcharts.com/h-sc/ui?s=NGA&p=W&b=5&g=0&id=p39290296546
6 still my target...would be good bounce off area from there...
Ket, Just curious as to why you think NGA will go back down to $6. Are you holding a short position? I realize the weekly chart doesn't look good. Are you implying that the chart knows something we don't? Maybe it does. You were right on your call regarding CIMT on the last earnings report and I held. I still have my CIMT. As for NGA, I held my shares since the research I did point to a growing company. I believe that NGA will post a good earnings report and the stock will go up. Did you find anything negative on the company that makes you think NGA will not perform since you believe its going to fall, or are you just going by the chart? I realize the general market is not good, but the doom and gloom won't last forever. We needed a correction just not all at once. As for NGA I'm hoping that they benefited from the strong industrial spending that took place during the last quarter as stated in the GDP report today, it stated that industrial spending hit a 13 year high. Does that chart always foretell future actions? Maybe, but I've missed too many golden opportunites by not sticking to my original plan and by not listening to my gut. My gut tells me NGA opens at $10 after earnings are released! Either way, good luck, we all need it!
Mbaugh
Quote from: mbaugh on July 27, 2007, 09:19:24 PM
Ket, Just curious as to why you think NGA will go back down to $6.
I think he said that because NGA is breaking down again from Descending Triangle and it made the 3rd hit from Decending Resistance.
If you do the math, you will get the technical target of $5.43. Unless NGA is going to report a blowout earnings and $5.43 target will never get made because Fundamentals will trump the Technicals.
11.63 - 8.53 = $3.10
08.53 - 3.10 = $5.43
Sorry for the first chart, it was posted a month ago. ;)
I found this on NGA's thread on the yahoo board. I thought it was worth posting here for whoever still has NGA.
from rainrunner7
"Good analysis abba. In regards to the recent insider selling, investors must realize that when executives are granted stock options as a part of their compensation package, they often find themselves in the rather envious position of sitting on way too much of a good thing. In other words, the personal portfolios of these executives are typically weighted heavily with just one stock, and financial advisors usually recommend selling some of that stock in order to diversify the executive's portfolio.
These men and women typically don't get where they are in life by being fools with money, and sitting on a small fortune all wrapped up in one stock would be quite foolish. When these insider sales take place, the reason usually amounts to no more than a desire to diversify, a desire to improve one's lifestyle, or a combination thereof. Dumping stock because you know a bad quarter is coming up is illegal under SEC rules, and I believe carries a mandatory prison sentence.
If any longs here really believe NGA executives would risk prison time, and kill the goose that lays the golden eggs so to speak, then you shouldn't be investing in this company in the first place. In short, if they knew this quarter would be bad, and sold their shares without disclosing such inside information to the public beforehand, they would be guilty of a rather serious felony.
I also agree with abbaman that it probably works to our advantage that NGA doesn't give guidance. There's nothing worse than being long in shares of a company that has a blowout quarter on rapidly rising revenues but misses the analyst's estimates by a penny and the stock tanks, basically as a knee jerk reaction. I'm holding my long position through earnings because NGA hasn't seen a ridiculous runup going into the earnings call, and there are no analyst estimates to meet or beat. The numbers should be compared to the same quarter last year, and the yoy revenue gains and earnings gains should be spectacular.
NGA's forward price to sales ratio(based on last quarters revenue and assuming no growth) is less than 1. The forward PE is about 10. Not bad for a fast growing company that should be considered a strong candidate to be bought out by a larger company.
Just a few thoughts. Good luck with this coming week. Earnings should come out, and I believe we start trading on the NASDAQ on Aug 2nd. "
Sentiment : Strong Buy
Great post mbaugh (as always), thanks for sharing :)
I especially enjoyed the following parts:
QuoteI also agree with abbaman that it probably works to our advantage that NGA doesn't give guidance. There's nothing worse than being long in shares of a company that has a blowout quarter on rapidly rising revenues but misses the analyst's estimates by a penny and the stock tanks, basically as a knee jerk reaction. I'm holding my long position through earnings because NGA hasn't seen a ridiculous runup going into the earnings call, and there are no analyst estimates to meet or beat. The numbers should be compared to the same quarter last year, and the yoy revenue gains and earnings gains should be spectacular.
NGA's forward price to sales ratio(based on last quarters revenue and assuming no growth) is less than 1. The forward PE is about 10. Not bad for a fast growing company that should be considered a strong candidate to be bought out by a larger company.
It says it all, the lack of analysts covering the stock is part of the reason why this stock is trading at less than half of the valuation it should have, something that doesn't happen with AZZ, its largest competitor that trades at 20 times fiscal 2008 EPS, because it issues guidance and has analyst coverage.
The stock just touched support, my hands are strong.
Earnings out!
http://biz.yahoo.com/prnews/070730/lam701.html?.v=4
David, what's your opinion on the earnings? It seems revenues were down slightly from the first quarter and EPS was also down slightly from Q1. However it is much higher than Q2 last year. I believe this is due to the price of zinc fluctuating. I'm going to continue to hold unless you have a different opinion.
Quote from: mbaugh on July 30, 2007, 08:59:48 AM
David, what's your opinion on the earnings? It seems revenues were down slightly from the first quarter and EPS was also down slightly from Q1. However it is much higher than Q2 last year. I believe this is due to the price of zinc fluctuating. I'm going to continue to hold unless you have a different opinion.
I agree with you, the stock is trading at 11.5 times earnings, it should be trading at 20 times earnings like its competitor AZZ, so it is worth, with the current fundamental information, about $13.6.
I'll make a more complete analysis over the next update, but I'll keep holding without a doubt.
No favorable response in pre-market. Hope it doesn't tank.
wow! NGA really has wild movements... I got unexpectedly in around $7.25
Now I'm really disappointed! I'm trying to determine if I should sell now to minimize further loss, it might do another CIMT and continue to go down under the next earnings report or something new develops. David, what do you think?
It's down 10%...
I was out of the country last week. Looks my stop was executed. Have a small profit (2%) :-X but happy with that now ::)
Good luck to those holding.
Amarens
Quote from: mbaugh on July 30, 2007, 10:13:48 AM
Now I'm really disappointed! I'm trying to determine if I should sell now to minimize further loss, it might do another CIMT and continue to go down under the next earnings report or something new develops. David, what do you think?
I think results were fine, but people were spooked by the CEO remarks:
«Commenting on the results of the second quarter 2007, Ronald J. Evans, president and chief executive officer, said "The strength of the U.S. economy continues to support hot-dip galvanizing demand at above historical levels.»
People read "strength of the US economy, what strength?" and "above historical levels? Does that mean we'll go back to the historical levels?" and sell the stock.
But the stock is trading at 9.9 times earnings and growing nicely, so it should rise. Technically it touched the basis of its descending channel and I still believe it will eventually break this channel to the upside.
I'll keep holding NGA.
NGA rose 5% today, but it's still not enough to show people that sold after earnings they were wrong. The stock needs to close above $8.49 to do prove them wrong, that is, 12.9% higher than today's closing price.
I enjoy NGA's pricing power, since it is able to increase the price of its services even more than the cost of zinc, which is the main material it uses in its galvanizing and coating processes.
I still don't get it why NGA trades at 10 times earnings, while it is growing them by 80% from the year ago levels. Its bigger competitor, AZZ, trades at 18 times earnings and is growing a lot less.
Go figure.
I'll continue holding NGA, as I expect to see $14 plus before the end of the year.
NGA will start trading on the Nasdaq today (instead of the AMEX), hopefully that will help providing a nice boost to shares. I expect NGA to approach the upper limit of its descending trendline and then to break it on the upside, since fundamentals are very attractive.
Mbaugh, are you still holding or couldn't resist the pressure? Thanks :)
I'm still holding. Thanks!
I think it's silly to sell when things seem to horrid. I asked my wife to remind me to make a critical review the next time I feel euphoric and extaltic about my holdings. 'Cause that's the time to be afraid. No is the time to forget about the stock market, in my view.
Yeah,
Some of us are still holding after digging deep fox holes. ;D
fantastic start of trading on NASDAQ.... :(
Quote from: raspi on August 02, 2007, 03:08:59 PM
fantastic start of trading on NASDAQ.... :(
I think there was some problem with NGA's transactions on the Nasdaq, because volume was abnormally low, considering the magnitude of the move yesterday. I mean, the stock opened down 14.3% with almost no volume? Can't be, something went wrong.
I would expect the anomaly to be corrected today and NGA to go back up to where it was before. We've touched the base of the descending channel (again).
I'll keep holding NGA.
I don't quite understand what you mean? It goes down on light volume because there are no buyers.. I don't think it has anything to do with trading on NASDAQ...
there is something terribly wrong with this company...
Yep, keeps in sliding down in a fast bob...
Why am I not getting my level II qoutes on this stock? I'm using ameritrade. Anyone else having this problem?
???
Financials came out on August 4th per Yahoo. Was there something with the results?
Quote from: David Randolph on August 03, 2007, 06:43:13 AM
Quote from: raspi on August 02, 2007, 03:08:59 PM
fantastic start of trading on NASDAQ.... :(
I think there was some problem with NGA's transactions on the Nasdaq, because volume was abnormally low, considering the magnitude of the move yesterday. I mean, the stock opened down 14.3% with almost no volume? Can't be, something went wrong.
I would expect the anomaly to be corrected today and NGA to go back up to where it was before. We've touched the base of the descending channel (again).
I'll keep holding NGA.
It nearly closed the gap. Hope will bounce up from here otherwise...
will have to take another loss
Quote from: Terliso on July 28, 2007, 12:08:02 PM
Quote from: mbaugh on July 27, 2007, 09:19:24 PM
Ket, Just curious as to why you think NGA will go back down to $6.
I think he said that because NGA is breaking down again from Descending Triangle and it made the 3rd hit from Decending Resistance.
If you do the math, you will get the technical target of $5.43. Unless NGA is going to report a blowout earnings and $5.43 target will never get made because Fundamentals will trump the Technicals.
11.63 - 8.53 = $3.10
08.53 - 3.10 = $5.43
Sorry for the first chart, it was posted a month ago. ;)
NGA hit the target today.
Quote from: raspi on August 06, 2007, 10:16:31 AM
there is something terribly wrong with this company...
There is nothing wrong with the company Raspi, just a technical breakdown.
Quote from: raspi on August 03, 2007, 11:15:52 AM
I don't quite understand what you mean? It goes down on light volume because there are no buyers.. I don't think it has anything to do with trading on NASDAQ...
You were right raspi, sorry for my misinterpretation of the facts.
QuoteNGA hit the target today.
Yes, you were absolutely right in your technical analysis and prediction Terliso, congrats :)
NGA got killed over the past few days and I wasn't even watching when the stock made a low at $5 or I don't know how I would feel. Even after recovering almost 20% from the intraday low, NGA was still down 10.8% on the day :P
I still think there are a few minor technical problems with the stock's Nasdaq trading, for example, we have ygtrdr saying he doesn't have Level II quotes and my Metastock isn't updating the stock either. These problems may have partially caused the low liquidity and the subsequent very sharp moves.
Yesterday NGA closed a very big and visible gap, but there's no doubt the technical picture is quite bearish now.
Valuation seems extremely attractive now, since NGA is trading at 8 times 2007 estimated EPS (I'm expecting a second half of the year similar to the first), and growing EPS by 71% from the year ago levels. However, the CEO's words at the latest earnings press release weren't positive:
«Commenting on the results of the second quarter 2007, Ronald J. Evans, president and chief executive officer, said "The strength of the U.S. economy continues to support hot-dip galvanizing demand at above historical levels. Strong capital goods spending, including electrical distribution and highway projects which specify galvanized product, has resulted in improved industry utilization rates."»
This "above historical levels" means that he expects demand to slow to the historical average.
When I was picking the two stocks to drop from the Main yesterday (which ended up being SYX and SNDA) I considered NGA, but then I figured that the bridge accident occurred in the US and the 156,000 bridges across the country needing maintenance would add to NGA's demand going forward.
The CEO's words were certainly discouraging, but I guess it wasn't on purpose.
NGA is just a $73 M market cap company growing revenues from $35 M in 2004, to $47 M in 2005, to $74 M in 2006 and to about $92 M in 2007. The revenue CAGR since 2004 was 38%, which is impressive. EPS came up from $0.03 in 2004 to an estimated $0.72 in 2006. But the stock price also rose from an average of $1.2 in 2004 to a high of $11.63 in 2007, so I would say the share price reflected the improvement in fundamentals.
Now, the CEO said this was an above trend growth, but I don't think revenues will shrink back down to 2004 levels, even if there's an economic recession in the US. A part of the company's growth has to be on its own merits.
I'm taking a lot of pain in NGA (and way too fast), but I hold the stock some more time, to see if we get some clarification on the technical problems, the CEO (I'm going to write him an e-mail), or a technical improvement after closing the gap.
I'll hold NGA.
I believe NGA's bleeding has stopped. I expect the stock to rise at least 10% today or tomorrow. I'll reconsider my options on NGA over the update after Thursday's close, for now I'll hold.
NGA is another winner according to Dow Theory Quadrix by ticker.
infact this one scored the highest.
NGA
over all score 99(Dow theory only recomends stocks with an over all score of 80)
momntum score 99
value score 69
quality score 91
financial strength 77
earnings estimates NA (?)
Performance score 86
volume metrics 83
in the past when I have held stocks Dow theory recommends with an overall score over 80 I have done well.
NGA has the highest score from all your picks. I am considering selling my CL and either get in NGA or JAKK.
Quote from: pinoleropuro on August 09, 2007, 07:10:51 AM
NGA is another winner according to Dow Theory Quadrix by ticker.
infact this one scored the highest.
NGA
over all score 99(Dow theory only recomends stocks with an over all score of 80)
momntum score 99
value score 69
quality score 91
financial strength 77
earnings estimates NA (?)
Performance score 86
volume metrics 83
in the past when I have held stocks Dow theory recommends with an overall score over 80 I have done well.
NGA has the highest score from all your picks. I am considering selling my CL and either get in NGA or JAKK.
Hi pinoleropuro, I've heard a lot about the Dow Theory, but never this one. The Dow theory that I know of was invented by Charles Dow (the creator of the Dow Jones Industrial Average) and it compares the Dow Transports with the Dow Industrials to make general market bull and bear calls.
I wonder if you're talking about another "Dow". What's your source? I would like to learn about that theory. Thanks :)
NGA didn't rise 10% as I expected, in fact it fell an additional 4.66% and now I'm losing 35.44% in this stock :-\ Man, I was winning 14% just three weeks ago, this sure was a sudden and painful change. The next time I'll pay more attention to the chart, and not just to the fundamentals. I need technical & fundamental analysis combined to get an edge.
I still think there's some problem with NGA's trading, most websites are not updating the quotes and Reuters isn't updating it either.
It is too early to phone call investor relations now, but I'll make a call throughout the session to see if they're aware of anything.
The CEO's words over the latest press release were stupid, because he blamed the US economy for the company's success. One never does that, when things go well, it is because management and employees worked well, when things go bad, "it's the economy's fault" ;D These guys need to learn these tricks and not harm shareholders in an unnecessary way.
The candles still favor a bounce in NGA, I hope it happens today. I'll hold NGA some more time, the stock is fundamentally cheap at this point.
Quote from: David Randolph on August 09, 2007, 08:13:12 AM
Quote from: pinoleropuro on August 09, 2007, 07:10:51 AM
NGA is another winner according to Dow Theory Quadrix by ticker.
infact this one scored the highest.
NGA
over all score 99(Dow theory only recomends stocks with an over all score of 80)
momntum score 99
value score 69
quality score 91
financial strength 77
earnings estimates NA (?)
Performance score 86
volume metrics 83
in the past when I have held stocks Dow theory recommends with an overall score over 80 I have done well.
NGA has the highest score from all your picks. I am considering selling my CL and either get in NGA or JAKK.
Hi pinoleropuro, I've heard a lot about the Dow Theory, but never this one. The Dow theory that I know of was invented by Charles Dow (the creator of the Dow Jones Industrial Average) and it compares the Dow Transports with the Dow Industrials to make general market bull and bear calls.
I wonder if you're talking about another "Dow". What's your source? I would like to learn about that theory. Thanks :)
NGA didn't rise 10% as I expected, in fact it fell an additional 4.66% and now I'm losing 35.44% in this stock :-\ Man, I was winning 14% just three weeks ago, this sure was a sudden and painful change. The next time I'll pay more attention to the chart, and not just to the fundamentals. I need technical & fundamental analysis combined to get an edge.
I still think there's some problem with NGA's trading, most websites are not updating the quotes and Reuters isn't updating it either.
It is too early to phone call investor relations now, but I'll make a call throughout the session to see if they're aware of anything.
The CEO's words over the latest press release were stupid, because he blamed the US economy for the company's success. One never does that, when things go well, it is because management and employees worked well, when things go bad, "it's the economy's fault" ;D These guys need to learn these tricks and not harm shareholders in an unnecessary way.
The candles still favor a bounce in NGA, I hope it happens today. I'll hold NGA some more time, the stock is fundamentally cheap at this point.
Yes David this is very important , technical tells you about things goes on that you don't know about to avoid such sharp loss :)
NGA has a problem with its trading I'm not getting it on one of my streamers .. there should be a problem with it ..
Quote from: David Randolph on August 09, 2007, 08:13:12 AM
Quote from: pinoleropuro on August 09, 2007, 07:10:51 AM
NGA is another winner according to Dow Theory Quadrix by ticker.
infact this one scored the highest.
NGA
over all score 99(Dow theory only recomends stocks with an over all score of 80)
momntum score 99
value score 69
quality score 91
financial strength 77
earnings estimates NA (?)
Performance score 86
volume metrics 83
in the past when I have held stocks Dow theory recommends with an overall score over 80 I have done well.
NGA has the highest score from all your picks. I am considering selling my CL and either get in NGA or JAKK.
Hi pinoleropuro, I've heard a lot about the Dow Theory, but never this one. The Dow theory that I know of was invented by Charles Dow (the creator of the Dow Jones Industrial Average) and it compares the Dow Transports with the Dow Industrials to make general market bull and bear calls.
I wonder if you're talking about another "Dow". What's your source? I would like to learn about that theory. Thanks :)
He's talking about the Quadrix rating system that Richard Moroney uses in his newsletters "Dow Theory Forecasts" and "Upside Stocks"
By the way Pino, "Upside" reccommended selling JAKK as soon as ER came out, and never reccomended buying NGA.
I agree that NGA should bounce here soon, it is quite oversold. I got in yesterday as the gap fill and the 200sma looked like it should act as support. Im a bit surprised to see it go down yet again, but am still hopeful it can get above the 200sma today. There is also a trend line connecting March and April lows to this current low, so hopefully all this combines to start stabilizing NGA and sending it higher.
Quote from: David Randolph on August 09, 2007, 08:13:12 AM
NGA didn't rise 10% as I expected, in fact it fell an additional 4.66% and now I'm losing 35.44% in this stock :-\ Man, I was winning 14% just three weeks ago, this sure was a sudden and painful change. The next time I'll pay more attention to the chart, and not just to the fundamentals. I need technical & fundamental analysis combined to get an edge.
So now you finally .admit that you are a trader, will always be a trader, and not some kind of misguided Warren Buffet apprentice? Many people here have warned you many times that you do need to pay attention to technicals especially on these volatile micro and small caps. Some got booted off the site for it.
Well David, I can't be booted off, I've already canceled my subscription (after almost 2 years) and today will likely be my last day here. I just can't figure out what your site is all about anymore. I have no trouble finding good LT picks on my own, and most of your picks I would never want to hold LT anyway.
Maybe once you figure out what 3SOF and yourself is all about, I will return. Until then, seeya later and GL.
Quote from: BigSully1 on August 09, 2007, 02:54:47 PM
Quote from: David Randolph on August 09, 2007, 08:13:12 AM
NGA didn't rise 10% as I expected, in fact it fell an additional 4.66% and now I'm losing 35.44% in this stock :-\ Man, I was winning 14% just three weeks ago, this sure was a sudden and painful change. The next time I'll pay more attention to the chart, and not just to the fundamentals. I need technical & fundamental analysis combined to get an edge.
So now you finally .admit that you are a trader, will always be a trader, and not some kind of misguided Warren Buffet apprentice? Many people here have warned you many times that you do need to pay attention to technicals especially on these volatile micro and small caps. Some got booted off the site for it.
Well David, I can't be booted off, I've already canceled my subscription (after almost 2 years) and today will likely be my last day here. I just can't figure out what your site is all about anymore. I have no trouble finding good LT picks on my own, and most of your picks I would never want to hold LT anyway.
Maybe once you figure out what 3SOF and yourself is all about, I will return. Until then, seeya later and GL.
Wow, tough words.
David, I suppose on a day like today and then hearing this kind of thing, you might feel pretty low. Just wanted to throw in my vote of confidence with you. You could still be amazingly right long term, we just havent gotten there yet. Or worst case you just lost some money in this tough market like pretty much everyone else, and might decide to alter your approach again.
In any case, you have a track record that speaks for itself, dont forget that. ;D Still rooting for you big guy!!!!
BigSully1, I understand your frustration, but I believe you are too short-sighted, you want everything to be perfect all the time, let us know if you find another service that sticks around and still interacts with their customers when the going gets tough....I bet you'll never find such a service. This is what makes David different, he's here during the good and bad times. The main problem here is that NO ONE seems to be able to tolerate the term "long-term", I admit I am guilty also, but the fact remains that David has clearly said his picks are for 3 years. Well in today's world with the internet and the constant flow of information, I believe most people have lost that long-term approach. It has become a "me" and a "I want it now" society. If you buy a stock to hold for three years then that means its a "hold" for three years. If you critique the stock everyday then I guess its not really a stock for three years because yes it will go down and it will go up again and again........the real test is where will it be in three years? I admit I don't have the right answers,but am I going to blame someone else especially David, HELL NO!!!! Because of David I am a better trader and because of him I am still here able to trade. David is human, i believe most on this board expect too much of David, I would not trade David for any other financial advisor in the world because I know he's sincere and honest and that alone will allow him to prevail. Remember folks, he's only trying to achieve a 30% yearly return, well he may not be able to acheive that every single year but over the long-term I bet he does since he already acheived over 100% returns annually since inception. The best part about this site is our ability to interact and share ideas and David's ability to adapt as well. maybe we can go with a short term portfolio and a long-term portfolio. Not a daily day-trading one, but one such as a 3-month fund and the other being the way it is now the 3 year fund. That way we can still make money in the short-term by buying for a swing trade and still have the main portfolio so that we can still see where we end up in 3 years. If it seems that the short-term fund keeps outpacing the long-term fund then we can re-evaluate whether or not to keep having a long-term fund. Its my opinion that in today's fast paced society the concept of "long-term" is fading since technogy is changing everything allowing more people to control their monies. I believe that's why we see daily 200 point swings in the market. People are managing their money from cell-phones to their lap-tops at work and this I believe is contributing to the erosion of the "Long-term" concept. Back in the old days people never knew how their stocks where doing untill they got their statements in the mail or if they checked the papers. I still agree with David that maybe long-term is the way to go, but I'm also open to the fact that maybe we are in a different world today and the long-term approach may be dying but the only way to find out is to stick with the plan and see how we still at the end. This post is already too long, sorry if I didn't make much sense, but I've had a few cold beers tonight! ;D Good Luck everyone! And David, I stand right behind you! ;D
Quote from: BigSully1 on August 09, 2007, 10:21:35 AM
Quote from: David Randolph on August 09, 2007, 08:13:12 AM
Quote from: pinoleropuro on August 09, 2007, 07:10:51 AM
NGA is another winner according to Dow Theory Quadrix by ticker.
infact this one scored the highest.
NGA
over all score 99(Dow theory only recomends stocks with an over all score of 80)
momntum score 99
value score 69
quality score 91
financial strength 77
earnings estimates NA (?)
Performance score 86
volume metrics 83
in the past when I have held stocks Dow theory recommends with an overall score over 80 I have done well.
NGA has the highest score from all your picks. I am considering selling my CL and either get in NGA or JAKK.
Hi pinoleropuro, I've heard a lot about the Dow Theory, but never this one. The Dow theory that I know of was invented by Charles Dow (the creator of the Dow Jones Industrial Average) and it compares the Dow Transports with the Dow Industrials to make general market bull and bear calls.
I wonder if you're talking about another "Dow". What's your source? I would like to learn about that theory. Thanks :)
He's talking about the Quadrix rating system that Richard Moroney uses in his newsletters "Dow Theory Forecasts" and "Upside Stocks"
By the way Pino, "Upside" reccommended selling JAKK as soon as ER came out, and never reccomended buying NGA.
Thanks BigSully1
I can't respond to the board while I am at work so I didn't.
David,
I have only been in this board since the begining of this year, even though I registered a long time ago- don't remember when. I like you, am also loosing quite a bit.
You have a great track record and that is why I decided to follow your board.
Just a thought, what got you to where you are now with a great following is what worked best for you and for those that are following you otherwise you would not have the great following you have.
My little portfolio doesn't even compare to yours but that is why I follow your recomendations because you've done well. obviously you've done something right.
Maybe changing strategy is not really what is needed but one thing I have read repeatedly throughout the board is that maybe we simply need to tweek the entry points a little more.
I know its gotta be aweful to see your portfolio go from around $420,000.00 to $358,000.00 and change.
just take a moment to refocus, regroup and I am very confident you will be able to come back with a vengence just like you found that GOAM trade. I know you can find a couple of other GOAMS out there that can help this thing get back on track.
Buena suerte amigo. = good luck friend. :)
I am hanging on...
Guess I will add my 2 cents here :-)
I've rarely encountered anyone with more savvy than David in picking small cap stocks with potential to give big returns.
But the timing for entry ... often has room for improvement.
Much of the time it's like .. "I've found another good one, let's buy on open tomorrow".
And the chart is screaming ... "not yet!!" ;D
Picking winning stocks may be the most important component of wealth-building, but it is not the only one. There are 2 others: timing of entry and timing the market.
Since the Dow hit 14k, there were numerous signs of failure at least in the short term. Profits should have been taken in all holdings and new entries postponed until the best setups once again present themselves.
NGA for example ...why not exit at the first close below the 50 sma .. or the second one at latest... then sit back in the weeds & watch. The market fell apart & so did NGA. Now it just bounced on its 200 sma, so maybe there's a new entry down here ..
Take profits at $9 and re-invest at $5.64 with a really tight stop .. what's wrong with that? ;)
I think it would work out better to be trading these great picks .. not just buy & blindly hold on, come what may.
You don't need charts that look like the blueprints for the New York subway system ::)
... just a couple of moving averages, stochastics, volume .. a few simple indicators are enough because we already know the stocks are fundamentally sound and will eventually run ... like TBSI for example :)
David Elliott of Wall Street Teachers is an excellent market timer and has some basic technical timing indicators he uses (he also has more complex ones for those who want to daytrade fast & furious!). He just did a web presentation for Options University on these simple proprietary indicators which should be available for the next few days at least:
http://www.options-university.com/Webinars/DavidElliott/index.html
I watched it last night & it reminded me again of how important it is to enter your trade at the right time ... like in real estate, you make your profit when you buy your house .. if you pay the right price.
In any case, it's up to each of us to manage our own account .. those with small accounts need to be stricter than those blessed with large ones .. the latter can often just set & forget because they can weather the downtrends. But I think we would all make more money faster if we factored chart timing and market timing into the purchase decision ..
there are times when it may be better to just be in cash .. waiting for the next good entry points to set up.
Maybe others would like to share their favorite timing indicators in the General discussion. :)
Quote from: pinoleropuro on August 09, 2007, 11:12:56 PM
just take a moment to refocus, regroup and I am very confident you will be able to come back with a vengence just like you found that GOAM trade. I know you can find a couple of other GOAMS out there that can help this thing get back on track.
We got one in the portfolio...it is GSB :D .....that stock is hanging there very strong while the market is falling apart..
Quote from: TraderStar on August 09, 2007, 11:50:13 PM
Guess I will add my 2 cents here :-)
I've rarely encountered anyone with more savvy than David in picking small cap stocks with potential to give big returns.
But the timing for entry ... often has room for improvement.
Much of the time it's like .. "I've found another good one, let's buy on open tomorrow".
And the chart is screaming ... "not yet!!" ;D
Picking winning stocks may be the most important component of wealth-building, but it is not the only one. There are 2 others: timing of entry and timing the market.
Since the Dow hit 14k, there were numerous signs of failure at least in the short term. Profits should have been taken in all holdings and new entries postponed until the best setups once again present themselves.
NGA for example ...why not exit at the first close below the 50 sma .. or the second one at latest... then sit back in the weeds & watch. The market fell apart & so did NGA. Now it just bounced on its 200 sma, so maybe there's a new entry down here ..
Take profits at $9 and re-invest at $5.64 with a really tight stop .. what's wrong with that? ;)
I think it would work out better to be trading these great picks .. not just buy & blindly hold on, come what may.
You don't need charts that look like the blueprints for the New York subway system ::)
... just a couple of moving averages, stochastics, volume .. a few simple indicators are enough because we already know the stocks are fundamentally sound and will eventually run ... like TBSI for example :)
David Elliott of Wall Street Teachers is an excellent market timer and has some basic technical timing indicators he uses (he also has more complex ones for those who want to daytrade fast & furious!). He just did a web presentation for Options University on these simple proprietary indicators which should be available for the next few days at least:
http://www.options-university.com/Webinars/DavidElliott/index.html
I watched it last night & it reminded me again of how important it is to enter your trade at the right time ... like in real estate, you make your profit when you buy your house .. if you pay the right price.
In any case, it's up to each of us to manage our own account .. those with small accounts need to be stricter than those blessed with large ones .. the latter can often just set & forget because they can weather the downtrends. But I think we would all make more money faster if we factored chart timing and market timing into the purchase decision ..
there are times when it may be better to just be in cash .. waiting for the next good entry points to set up.
Maybe others would like to share their favorite timing indicators in the General discussion. :)
Applause, TraderStar. I agree with you 100%, and that is what I always wanted from the site. Watch the market leading, fundamentally superior stocks, but only buy when time is right such as when breaking out of sound base on volume and other indicators (possibly buying while still basing, before a breakout or buying at other strategic points )instead of buying overextended and hoping for the best. There is also no reason to hold when everything points to a large decline or if the trade just doesn't work out. There's nothing wrong with being in cash for awhile while awaiting another trade, there will always be more. Other things to consider are the overall market, and sector performance, what are performing best-large,mid,or small cap. I do have to commend David for outperforming the Russell 2000 this year so far. Didn't mean to be too critical of him, and I know he works hard and is well intentioned. It's just that the site is not fulfilling my expectations for trading and learning tthe technical side.
Anyway, I really hope something constructive comes from this discussion, GL to all. I think I get cut off today.
Quote from: BigSully1 on August 10, 2007, 01:34:00 AM
Quote from: TraderStar on August 09, 2007, 11:50:13 PM
Guess I will add my 2 cents here :-)
I've rarely encountered anyone with more savvy than David in picking small cap stocks with potential to give big returns.
But the timing for entry ... often has room for improvement.
Much of the time it's like .. "I've found another good one, let's buy on open tomorrow".
And the chart is screaming ... "not yet!!" ;D
Picking winning stocks may be the most important component of wealth-building, but it is not the only one. There are 2 others: timing of entry and timing the market.
Since the Dow hit 14k, there were numerous signs of failure at least in the short term. Profits should have been taken in all holdings and new entries postponed until the best setups once again present themselves.
NGA for example ...why not exit at the first close below the 50 sma .. or the second one at latest... then sit back in the weeds & watch. The market fell apart & so did NGA. Now it just bounced on its 200 sma, so maybe there's a new entry down here ..
Take profits at $9 and re-invest at $5.64 with a really tight stop .. what's wrong with that? ;)
I think it would work out better to be trading these great picks .. not just buy & blindly hold on, come what may.
You don't need charts that look like the blueprints for the New York subway system ::)
... just a couple of moving averages, stochastics, volume .. a few simple indicators are enough because we already know the stocks are fundamentally sound and will eventually run ... like TBSI for example :)
David Elliott of Wall Street Teachers is an excellent market timer and has some basic technical timing indicators he uses (he also has more complex ones for those who want to daytrade fast & furious!). He just did a web presentation for Options University on these simple proprietary indicators which should be available for the next few days at least:
http://www.options-university.com/Webinars/DavidElliott/index.html
I watched it last night & it reminded me again of how important it is to enter your trade at the right time ... like in real estate, you make your profit when you buy your house .. if you pay the right price.
In any case, it's up to each of us to manage our own account .. those with small accounts need to be stricter than those blessed with large ones .. the latter can often just set & forget because they can weather the downtrends. But I think we would all make more money faster if we factored chart timing and market timing into the purchase decision ..
there are times when it may be better to just be in cash .. waiting for the next good entry points to set up.
Maybe others would like to share their favorite timing indicators in the General discussion. :)
Applause, TraderStar. I agree with you 100%, and that is what I always wanted from the site. Watch the market leading, fundamentally superior stocks, but only buy when time is right such as when breaking out of sound base on volume and other indicators (possibly buying while still basing, before a breakout or buying at other strategic points )instead of buying overextended and hoping for the best. There is also no reason to hold when everything points to a large decline or if the trade just doesn't work out. There's nothing wrong with being in cash for awhile while awaiting another trade, there will always be more. Other things to consider are the overall market, and sector performance, what are performing best-large,mid,or small cap. I do have to commend David for outperforming the Russell 2000 this year so far. Didn't mean to be too critical of him, and I know he works hard and is well intentioned. It's just that the site is not fulfilling my expectations for trading and learning tthe technical side.
Anyway, I really hope something constructive comes from this discussion, GL to all. I think I get cut off today.
I absolutely agree - better timing is necessary to earn money and stop loss too.
Quote from: TraderStar on August 09, 2007, 11:50:13 PM
Guess I will add my 2 cents here :-)
I've rarely encountered anyone with more savvy than David in picking small cap stocks with potential to give big returns.
But the timing for entry ... often has room for improvement.
Much of the time it's like .. "I've found another good one, let's buy on open tomorrow".
And the chart is screaming ... "not yet!!" ;D
Picking winning stocks may be the most important component of wealth-building, but it is not the only one. There are 2 others: timing of entry and timing the market.
Since the Dow hit 14k, there were numerous signs of failure at least in the short term. Profits should have been taken in all holdings and new entries postponed until the best setups once again present themselves.
NGA for example ...why not exit at the first close below the 50 sma .. or the second one at latest... then sit back in the weeds & watch. The market fell apart & so did NGA. Now it just bounced on its 200 sma, so maybe there's a new entry down here ..
Take profits at $9 and re-invest at $5.64 with a really tight stop .. what's wrong with that? ;)
I think it would work out better to be trading these great picks .. not just buy & blindly hold on, come what may.
You don't need charts that look like the blueprints for the New York subway system ::)
... just a couple of moving averages, stochastics, volume .. a few simple indicators are enough because we already know the stocks are fundamentally sound and will eventually run ... like TBSI for example :)
David Elliott of Wall Street Teachers is an excellent market timer and has some basic technical timing indicators he uses (he also has more complex ones for those who want to daytrade fast & furious!). He just did a web presentation for Options University on these simple proprietary indicators which should be available for the next few days at least:
http://www.options-university.com/Webinars/DavidElliott/index.html
I watched it last night & it reminded me again of how important it is to enter your trade at the right time ... like in real estate, you make your profit when you buy your house .. if you pay the right price.
In any case, it's up to each of us to manage our own account .. those with small accounts need to be stricter than those blessed with large ones .. the latter can often just set & forget because they can weather the downtrends. But I think we would all make more money faster if we factored chart timing and market timing into the purchase decision .. there are times when it may be better to just be in cash .. waiting for the next good entry points to set up.
Maybe others would like to share their favorite timing indicators in the General discussion. :)
TraderStar
I totally agree with you ... You'er reading my mind :)
Charts are very important for a winning trade ... if there's a good stock with a temperarily bearish chart what not wait and get it cheaper when it becomes bullish ?
This is the way I'm doing my trades and I have a good experience I can help with that why not .. :)
we work as a team to improve and protect our money ...
I trust David and he's doing great job and he's spending alot of time uptading and finding stocks , but sometimes small mistakes could ruin it all ..
Let's share our knowledge and team up , we'er on the same boat ...
I've just read the posts on this thread. Actually I've been refusing to look to how many people canceled the 3 Stocks Premium service over the last couple of weeks, and who they are.
It has been tough enough to deal with the losses and come here to write everyday.
But over the weekend I'll cut off the access to everybody that canceled the service, by a matter of justice. I don't care if I have just 10 or 20 subscribers, for as long as there is one, I'll keep doing this service and dealing with whatever the market presents to me everyday.
BigSully1 was an important and valuable member to the 3 SOF Community, I feel sorry that he is leaving and wish him well. Perhaps he'll come back when the dust settles or when I'm able to push the Main back up again.
As for NGA, the stock had its first positive day in a while, and that happened while the general market was tanking. Fundamentally the stock is very attractive, in my personal view - it is trading at 7.8 times 2007 EPS.
And I'm telling you, that bridge accident will probably bring more demand to NGA's galvanizing and coatings services. The government needs to preserve its real estate assets, bridges can't fall. Property assets have so much value right now, no one is interested in seeing the value slip over the years. Preservation my friends.
Moreover, NGA is a $69 M market cap company. It's share price can turn on a dime.
I've ended my evaluation and thinking about NGA and I believe it is a valuable long term asset for the Main Portfolio which needs to be preserved. I'll hold NGA whatever happens.
David,
Nobody likes to see their portfolio drop 20% in a few days. It's too easy to point a finger during a period like this. I did have a feeling of euphoria each day as I watched my stocks grow. The market has just put me back in my place.We should all remember to only have invested in the market what you feel comfortable losing at any one time.
Love the service and staying!
basanlas
Quote from: David Randolph on August 10, 2007, 07:12:36 AM
I've just read the posts on this thread. Actually I've been refusing to look to how many people canceled the 3 Stocks Premium service over the last couple of weeks, and who they are.
It has been tough enough to deal with the losses and come here to write everyday.
But over the weekend I'll cut off the access to everybody that canceled the service, by a matter of justice. I don't care if I have just 10 or 20 subscribers, for as long as there is one, I'll keep doing this service and dealing with whatever the market presents to me everyday.
the people should not been thrown out before.......from the last payment they have 30 days to go....so if someone cancelled yesterday they still have 29 days if they once started the service on day 9 of a month.... :)
That is correct!!! We are paying in advance for the service, so please either refund my money or allow me to be a member for the time I've already paid.
Thanks David... I will most likely be coming back... I just don't feel like buying anymore stocks right... just going to hold what I have and let the dust settle.
Good luck my friend and hang in there!!! You are doing a great job... we just got unlucky... that's life and that's definitely the market.
-Josh
Quote from: ket1390 on August 10, 2007, 09:15:09 AM
Quote from: David Randolph on August 10, 2007, 07:12:36 AM
I've just read the posts on this thread. Actually I've been refusing to look to how many people canceled the 3 Stocks Premium service over the last couple of weeks, and who they are.
It has been tough enough to deal with the losses and come here to write everyday.
But over the weekend I'll cut off the access to everybody that canceled the service, by a matter of justice. I don't care if I have just 10 or 20 subscribers, for as long as there is one, I'll keep doing this service and dealing with whatever the market presents to me everyday.
the people should not been thrown out before.......from the last payment they have 30 days to go....so if someone cancelled yesterday they still have 29 days if they once started the service on day 9 of a month.... :)
A friend of mine, who is very laid back kinda guy, once asked me how my investing was going on. At that time I was up 60% (last year during the big run up). He said, "when you're 100% up, let me know, I'll consider joining you". I spend a lot of time and nerve reading, thinking here and he just want to play if I prove to him it works. Well, I decided, I will not tell him when I make that 100%, although he is my friend. Trust and confidence are important. Market is a game. You can't stop playing soccer because it started to rain. Today there is rain on the market, what will there be tomorrow?...
And if you have been paying for the service out of your gains and they are no longer there, well, ask David for a break, perhaps he'd keep you as a client.
First, I have to say that David is doing an excellent job. This downturn is no more than a slight bump on the road over the long run. I for one will let David continue his job. With that said, David, I think you said that it is matter of justice to cut off those people who cancelled their subscription. I truly believe DragonAMG is correct in that it is also a matter of justice to refund their money for the remaining time or to keep their membership alive until their time runs out.
I for one will not cancel my subscription because I believe this site has incredible value. If I can get an average of 10% to 15% return over a year, it is worth staying.
Quote from: DragonAMG on August 10, 2007, 10:14:41 AM
That is correct!!! We are paying in advance for the service, so please either refund my money or allow me to be a member for the time I've already paid.
Thanks David... I will most likely be coming back... I just don't feel like buying anymore stocks right... just going to hold what I have and let the dust settle.
Good luck my friend and hang in there!!! You are doing a great job... we just got unlucky... that's life and that's definitely the market.
-Josh
Thanks for your comments and support during this difficult period :)
QuoteFirst, I have to say that David is doing an excellent job. This downturn is no more than a slight bump on the road over the long run. I for one will not cancel my subscription because I believe this site has incredible value. If I can get an average of 10% to 15% return over a year, it is worth staying.
Thanks for staying tri-iam, I believe we'll achieve more than 10%-15% a year, on average. On a very good year, say a year the S&P rises 20%, I'll expect to earn no less than 50%.
The Main Portfolio is up 8% so far in 2007 with 4.5 months to go, against 2.5% for the S&P 500 and 0% for the Russel 2000 Index. Anyway, 8% is well below my expectation for the year, especially when considering the Main was up 27% just a while back.
QuoteWith that said, David, I think you said that it is matter of justice to cut off those people who cancelled their subscription. I truly believe DragonAMG is correct in that it is also a matter of justice to refund their money for the remaining time or to keep their membership alive until their time runs out.
Of course, the people that still have subscription time will remain with access until that time expires.
As for NGA, it took a couple of days more, but the 10-11% one day rally finally came.
Fundamentally and thinking about the long term future for this company, I see rising demand for the company's services, which are mainly directed to the following industries:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=39647;image)
Now read the following article, on the aftermath of the Mississippi bridge collapse:
Ageing infrastructure under scrutiny after bridge collapse (http://www.abc.net.au/news/stories/2007/08/03/1995657.htm)
I see many billions coming for infrastructure preservation and NGA is an industry leader, with ten facilities across the USA (http://www.nagalv.com/).
NGA is just a $77 M market cap company, trading at roughly 8.7 times earnings.
I'll continue holding NGA for the long term.
NGA rose 8.9% and is back into its descending channel. I guess the technical formation lost validity with this move. As investors become a bit more calm and searched for undervalued stocks, certainly NGA popped on their "severely undervalued" list.
I'll keep holding NGA.
Nothing new on NGA yesterday, I'll keep holding it.
NGA fell 6.1% yesterday, but nothing changed from a technical or fundamental perspective. The company is still growing very rapidly and trading at 8.5 times earnings and I find that extremely attractive from a fundamental standpoint.
Strange, I thought NGA had closed positive as I was watching yesterday's closing action. NGA, $72 M market cap, projected 2007 revenue at $92 M, EPS at $0.72, growing 84% from the year ago level and trading at 8 times earnings.
I see increasing demand for the company's services as the government looks to preserve its infra-structural assets, like highways, bridges, power grids, etc. I wonder why NGA doesn't expand overseas, to China for example, I'm sure there's a lot of demand for galvanizing and coating services there.
NGA is the sole pure North American play in the Main Portfolio. I'll keep holding the stock.
I took this from an article:
«The American Society of Civil Engineers estimates it would take nearly $190 billion to fix more than 70,000 bridges deemed "structurally deficient.»
That's a lot of money and NGA is at the center stage of the bridge repair and preservation industries.
Anyway, the stock is already trading at just 8.4 times earnings. I'll continue holding NGA.
NGA rose 3.6% yesterday, but that's still not enough to turn the chart from bearish to bullish. The stock needs to close back above $7.05 and I expect this to happen before the end of the year.
I think people expect some weak seasonality to damage NGA's financial performance in the second half, but I've checked the company's history and there's no "weak second half" beyond 2006. That only happened in 2006 and it wasn't because of seasonality ... I wonder why was it?
I'll study that for the next update. I'll keep holding NGA.
QuoteI think people expect some weak seasonality to damage NGA's financial performance in the second half, but I've checked the company's history and there's no "weak second half" beyond 2006. That only happened in 2006 and it wasn't because of seasonality ... I wonder why was it?
Hmm, it seems to me that my "fundamentals" service has some erroneous data on NGA. I've looked into last year's SEC filings and saw the company earned $0.14 EPS in Q3 2006 and my service shows just $0.09. ::)
So, it appears there's no seasonality at all in NGA, and the second half may very well be as strong as the first half, or even stronger. Of course, people are very worried about the US economic outlook and most economists expect a recession in early 2008 due to the credit problems, but I don't think that's going to be the case. We'll see.
As for NGA, it is trading at about 8 times earnings, so it is already priced like we're in a long term bear market.
I'll keep holding NGA.
Oh oh oh, a 14.2% advance day for NGA, still not enough to bring the Main into the black with this holding. If everything plays out as I think it will, which is NGA breaking out above its short term descending trendline and actually moving up to new all time highs, it will be one of the very first times where the "close the gaps" theory worked perfectly.
Anyway, I've been thinking that the zinc price has been coming off lately (like most commodities) and that will actually provide a boost to NGA's earnings, at least over the short term, because zinc is a cost for the company and probably the company was able to sustain the high price it charges for its galvanizing and coating services. We'll see.
Thinking of the long term, everybody knows the US infrastructure needs more maintenance work, and NGA is there to provide it. A lot of money and effort was put into building infrastructure and commercial property to now see its value erode over the years. Can't be.
The stock is trading at about 10 times earnings now, and growing spectacularly. I'll keep holding NGA for the long term.
We're not out of the woods in NGA yet, but looking much better now. I believe fundamental undervaluation will make it rise and breakout its short term descending trendline. I'll keep holding NGA.
just fyi:
NGA: Short Interest UP 100.0% to 712.4K in Aug 2007
Friday , August 24, 2007 16:19ET
According to new short interest data from NASDAQ, short interest for North American Galvanizing & Coatings, Incorporated (NasdaqNM: NGA) INCREASED 100.0% to 712,363 shares for the month ended mid-August, 2007.
SYMBOL JULY AUGUST CHANGE %CHANGE DAYS/COVER
-------- ------------- ------------- ------------- ------------ ----------
NGA 0 712,363 +712,363 +100.00% 3
Based on NGA's 20-day average daily share volume of 346,638, it would require approximately 3 day(s) of buying to cover this short interest.
chart:
Just a quick chart update for NGA:
NGA is trying to reverse it's swing to the upside, and has managed to perform high relative highs and lows during the past few weeks. Although there is a double resistance on the way, I'm talking about the $7.44 level, which is also the ema-50 approximately spot right now. The descending resistance line stands at $8.60.
Portfolio Instructions:
Hold NGA
Best regards,
Chart Update:
Not a good session for NGA which was the worst performer of the Main Portfolio today. Anyway, and assuming this pullback scenario, today's session doesn't change anything, NGA may just need a breath before attempting to break the $7.44 again.
Portfolio Instructions:
Hold NGA
Regards,
Chart update:
NGA was once again the worst performer from the Main Portfolio, closing down the session right no the EMA-200 spot.
Portfolio Instructions:
Hold NGA
Regards,
Not a single press release or SEC filing for over a month now. NGA's management is either asleep or working hard to improve the company, without any time left for us, the stock investors. Let's hope it is the second hypothesis.
I didn't expect NGA to fall this hard (I'm losing 21.6% on the stock now) but as it goes down it just gets more attractive from a fundamental standpoint, in my view.
NGA is a $83 M market cap company and if the second half of the year is similar to the first half, it will earn $0.72 per share, compared to $0.39 in 2006. This means the stock is trading at about 9.3 times earnings and growing them by 84% from the year ago levels. This reads "extremely attractive" in my book.
Of course, the big issue is "will the second half be as strong as the first half?"
Well, I don't know for sure, but I think the recent fall in zinc prices will provide at least a short term boost to NGA's earnings, since zinc is the primary cost for the company. Moreover NGA, being a galvanizing and coatings services provider, gets its demand from heavy construction works. And believe it or not, the DJ US Heavy Construction Index is the second best performer of all industry groups over the past 3 months (http://www.marketwatch.com/tools/industry/).
So, there are some clues that the second half may very well be as strong or even stronger than the first. That would mean at least $0.72 EPS for NGA in 2007. If we consider the average valuation of the Industrial Equipment & Components industry (http://finance.yahoo.com/q/co?s=nga), which is 19.51 times EPS, I say NGA should close the year at $14.05 to be valued at average.
Impossible? No, because NGA is such a small cap, it wouldn't be unusual for it to run up 100% or so in 4 months.
I'll keep holding NGA.
NGA has been tough to hold, because the market hasn't been in agreement with my view of the fundamentals, expressed in my latest update.
But, because I'm trying to use my head to judge my investments and not the chart's trend, I'll keep holding NGA. If I lose trust in the fundamentals, then I'll take my loss, no problem if it is bigger than the 25% loss I have now.
I believe this is the path to also let the winners win, to play stocks with a longer term time frame.
And the pain just keeps going on NGA. The stock is trading at a level like the past two remarkable quarters never existed. P/E is below 10 and growth is strong.
I understand the chart looks bearish, but you know how that can change pretty quickly ... I'll keep holding NGA.
No news out for NGA since July 31st. The stock keeps slowly sliding. I'll hold it anyway, because I believe that any positive news may change the technical picture completely, since the stock is such an undervalued micro-cap.
NGA's volume picked up some as it touched the 200 days SMA support. I expect the stock to rebound strongly from the current levels, because it is so damn cheap, trading at 8.2 times earnings.
I'll keep holding NGA.
Yes it's very cheap ... it's very important not to close below 5.50 on weekly ..
Quote from: Garoh on September 11, 2007, 10:55:06 AM
Yes it's very cheap ... it's very important not to close below 5.50 on weekly ..
Yep, I don't think that's going to happen ... I feel a 10% plus day is coming, perhaps today or tomorrow. I'll continue holding NGA.
QuoteYep, I don't think that's going to happen ... I feel a 10% plus day is coming, perhaps today or tomorrow.
I'm still waiting for that 10% one day rally. NGA has been building quite a base over the last few days ... perhaps it's going to be a 20% day!
Anyway, NGA is currently the biggest loser of the Main Portfolio. I've written NGA's fundamental case several times and yet the stock doesn't seem to respond to its, at least by me perceived, undervaluation.
When the stock starts running I guess it will flash on many people's screen that will run to buy, because, with simple math one can see the stock is trading at a deep discount. But, if we don't get this type of technical phenomenon, I guess just a positive earnings news can do the trick.
I think investors are bearish on NGA because they're negative on the US economy. But I'm moderately positive on the US's economic prospects and NGA is such a micro cap company (current market cap is $72.6 M), that it is much more dependent on its management skills than the overall economic activity. There are no press releases out since July 31st, that's a lot of time ... but I'll patiently keep waiting and holding NGA here, since I have no fundamental motive to sell it.
Volume picked up a bit on NGA, but the stock still went down 2.5%. No news out for almost two months now. I still think/hope the stock is this weak more because of technical factors than any others, and we know how the chart can change very quickly.
I'll hold NGA for some more time.
NGA usually takes some more time than I expect, but finally we've had the 10% or so rally I've been talking about. Still no news out.
Let's see if the rally can get some traction over the next few days ... I'll keep holding the stock whatever happens, due to the very attractive valuation.
NGA isn't all that far off from turning its chart around. We have that horizontal resistance at $7.44 and the all important descending trendline currently standing at $8.08.
Volume picked up nicely to more than 400 thousand shares yesterday. I'll keep holding NGA.
A bit of selling yesterday in NGA, perhaps on a negative reaction to the 50 days SMA, took the stock down by 2.5%. Probably it's going to take some positive news for the chart to turn bullish again (NGA would have to close above $8.04). No news out today.
I'll continue holding NGA.
Still no news out for NGA. Technically the stocks needs to take three steps to turn bullish:
1) Close above the 50 days SMA, currently at $6.96.
2) Close above the $7.44 horizontal resistance level.
3) Most importantly, cross the descending trendline on the upside, with volume above average. This descending resistance will be standing at $8.01 today.
I expect this bullish behavior to happen because NGA is trading at a discount relative to its peers, the general market, and its own intrinsic growth.
No news out from NGA since July 31st. Yesterday was the 4th time the stock touched the descending 50 days SMA and failed to breakout on the upside. For today this moving average will be standing at $6.90. I expect the general market to provide some help to NGA, after the weaker open ... perhaps this will be enough for the stock to close above $6.90 and start trading more in tandem with its fundamentals.
I'll keep holding NGA.
QuoteI expect the general market to provide some help to NGA, after the weaker open ... perhaps this will be enough for the stock to close above $6.90 and start trading more in tandem with its fundamentals.
Nope, NGA went down, even as the general market recovered some ground. The stock has been weak, but I'm still not sure if it is because of the chart, or because fundamentals will deteriorate going forward.
Of course, everybody and their mothers are pessimistic on the US economy and, after residential construction collapse, I guess commercial construction should be next to go down. But this is what is on the people's minds, and that's not always the truth when it concerns to the stock market.
As far as my investment is concerned, I see a stock trading below 9 times earnings and growing fast over the last few years, so I think it is attractive. Anything not too bad will constitute a positive surprise for the market and that should put the chart on the bullish track.
However, it will be hard to change the technical picture without some new fundamental input. Perhaps we'll only get one in mid November with the quarterly earnings, since NGA's management isn't issuing any press releases.
I'll keep holding NGA.
NGA is trying to put on a short term floor, as volume picked up a bit and the stock closed off the lows. We'll see if this is the start of some upside action. Fundamental analysis tells me the stock is worth a lot more, so I'll keep holding NGA.
NGA ticked up 4.7% without any news. The 50 days SMA resistance level stands at $6.71 and the all important descending trendline at $7.84. I expect NGA to turn its chart around somewhere down the road, since fundamentals are attractive, as we've seen throughout this thread.
awesome again David >:D >:D >:D
Quote from: la-onda on September 28, 2007, 10:55:11 AM
awesome again David >:D >:D >:D
Well, I'm still losing in NGA ... but I tell you, if given time, I see no losers in the Main. They're all long term gainers in my view (unless fundamentals change).
What's happening today with NGA is that AZZ posted better than expected earnings and said backlog was at a record:
• InPlay: AZZ beats by $0.18, beats on revs; guides FY08 EPS above consensus, revs above consensus (http://finance.yahoo.com/mp#azz)
Briefing.com (Fri 5:09am)
The galvanizing market is growing stronger and stronger, as I expected, and NGA is trading at 9-10 times earnings (much cheaper than AZZ).
By Bob Sechler
Of Dow Jones Newswires
AZZ Inc. (AZZ) shares rose Friday after the company logged fiscal second-quarter earnings that substantially topped expectations and also issued an upbeat outlook for 2008.
Shares of Fort Worth-based AZZ were up 5% recently, or $1.69, at $35.20. Earlier Friday, the stock climbed as high as $37.89 a share, up 13%.
The strong results from AZZ, which makes electrical products and provides galvanizing services, gave a boost to some other galvanizing stocks as well. Shares of North American Galvanizing & Coatings Inc. (NGA) were up 77 cents recently, or 11.9%, at $7.25.
"This is the first real-time information about how galvanizing is doing," said Next Generation Equity Research analyst Ned Borland, who has a buy rating on AZZ but doesn't formally follow NGA. "This is a data point that shareholders (in the galvanizing sector) can look at and probably feel really good about."
AZZ said earnings for its fiscal second quarter ended Aug. 31 came in at $8.12 million, or 66 cents a share, compared to $5.28 million, or 45 cents a share, a year earlier. Revenue climbed 30%, to $81.6 million from $62.9 million.
Wall Street had been expecting the company to earn 48 cents a share for the latest period on about $78.5 million in revenue.
Meanwhile, AZZ raised its fiscal 2008 earnings view to a range of $1.95 a share to $2.05 a share on revenue of $315 million to $325 million. Previously, AZZ had pegged fiscal 2008 earnings at $1.65 a share to $1.75 a share, on revenue of $310 million to $320 million.
Analysts said both of the company's business lines appear to be doing well.
"They had strong sales growth in the electrical and industrial products segment, and the backlog continues to rise nicely," said Sidoti & Co. analyst John Franzreb, who maintained his buy rating on AZZ Friday and raised his price target to $42 a share from $36.
As for galvanizing, analysts said AZZ was able to maintain pricing despite a drop in its cost of zinc, a key raw material. Galvanizing protects steel components from corrosion.
-By Bob Sechler, Dow Jones Newswires; 512-236-9637
(END) Dow Jones Newswires
September 28, 2007 11:07 ET (15:07 GMT)
on FIRE >:D
Instead of weaker earnings like most people expected, AZZ's results (quarter ended in August 31st) for the galvanizing services unit show strong growth from the year ago levels and more importantly for NGA, growth from the previous quarter.
This tells me probably I shouldn't expect $0.72 EPS for the full year (since in the 1st half NGA earned $0.36 per share), but more, because strong growth continues. Probably we're looking at something like $0.8 - $1 EPS in 2007 for NGA.
According to these estimates, at $8 the stock seems to be trading below 10 times earnings. As comparison, AZZ trades at 20 times earnings and isn't growing as fast as NGA.
Technically, at last, NGA is turning from bearish to bullish. The current move should take the stock to more than $14 to correctly reflect the fundamental information, in my view.
I already wrote some comments on why NGA moved so much on Friday. Unfortunately the stock ended up closing below the all important descending resistance, so the chart still isn't completely bullish.
But, from what we can read at AZZ's results (http://biz.yahoo.com/prnews/070928/laf023.html?.v=101), the market can only expect good news from NGA when it reports 3rd quarter earnings in mid November. It should discount the probable good news between now and then.
Today the resistance will stand at $7.78, let's see if there's some follow through from Friday's action and NGA makes a bullish breakout.
I'll keep holding NGA.
Wow this's cool ;D
In the play $8.50 - $9.10 - $10 very soon ..
Quote from: Garoh on October 01, 2007, 07:59:39 AM
Wow this's cool ;D
In the play $8.50 - $9.10 - $10 very soon ...
I hope so Garoh, I hope so. NGA goes to show how quickly things can change when the fundamentals warrant it, just a few days ago I was losing 30% plus in NGA and now I'm losing just 2.7%. The chart went from bearish to bullish.
I guess this two days breakout is better than if NGA had closed above the resistance right on the first day after the AZZ news.
I now see $0.9 EPS for the full year of 2007, NGA just needs to trade at 15.5 times earnings to achieve $14 a share. I think this is highly possible, the stock traded at that kind of multiple last May.
I'll keep holding NGA.
I enjoy seeing NGA closing above the midterm descending trendline for the 2nd day in a row. It reinforces the idea of a bullish breakout. Fundamentally NGA is worth more than $14 a share, I'll keep holding NGA.
Bah, retest to the descending trendline, prior resistance, now support. The stock should continue moving higher after this normal retest, fundamentals say it's worth a lot more.
I'll keep holding NGA.
A bullish breakout, a pullback to retest the prior resistance, new support, and then another rally to new highs. The first and second parts of this scenario already happened and the third part seems to be under way ... fundamentals certainly warrant that.
I'll keep holding NGA.
NGA's chart continues to be constructive.
Now I expect something like $0.9 EPS for the full year of 2007, up from $0.39 in 2006 and $0.05 in 2005. So, I expect earnings growth of about 130% and the stock is trading at 9.4 times earnings. Can't be, the stock needs to go up to accurately reflect the fundamentals. Or else I'm seeing everything wrong, but I don't think so, from what we've heard from AZZ's galvanizing services unit .
I'll keep holding NGA.
NGA started the day well, but I guess AZZ's 6% decline (to close an open gap, nothing special) brought some sellers late in the day. So, the consolidation phase continues. I'll keep holding NGA due to the attractiveness of its fundamentals, as explained back in this thread.
NGA is still consolidating the 35% advance it had as a consequence of AZZ's better than expected quarterly earnings. AZZ rose 5.6% yesterday, hopefully this will inspire buyers into NGA too.
Fundamentally the stock is about 40% undervalued, as we've seen, I expect it to reach $14 over the next 12 months and I'll continue holding NGA.
NGA sure had a nasty sell off yesterday. This one was painful, because it broke down below the descending trendline (which took so much effort to break on the upside) and it is almost back to the point like AZZ's fundamental information never happened. AZZ itself is also back below before that news hit the wires ...
Moreover, the market isn't valuing NGA's galvanizing services much, as some analysts say it is a "commodity like" business:
• AZZ Good as It Gets (http://us.rd.yahoo.com/finance/external/mfool/SIG=12b7kqjqr/*http://www.fool.com/investing/general/2007/09/28/azz-good-as-it-gets.aspx?source=eptyholnk303100&logvisit=y&npu=y)
at Motley Fool (Fri, Sep 28)
«It's important to analyze AZZ's two main lines of business separately, because they have quite different economics.
Producing galvanized steel is a cyclical commodity business, and demand has been very strong in the past two years. Steel is galvanized when it's coated with zinc, making it resistant to corrosion. Galvanized steel is used for some automobile components, metal roofs for industrial buildings, and many other outdoor steel structures. The product accounted for 45% of the company's revenue and 54% of its operating income last quarter. However, zinc prices have risen this year, and operating margin fell to 25% this quarter from 31% a year ago.
With little product differentiation in galvanizing, as demand rises and falls with economic activity, margins will tend to fluctuate around their long-term average. If margins were to stay unusually high for too long, expansion at AZZ and its competitors would quickly drive up supply, sending prices and margins down.
Operating margins eventually should fall toward 20%, where they were in 2005 and 2006. Revenue should also fall eventually, when prices moderate. Investors should remember that most of the growth in the galvanizing segment in the past year has come from price increases, and only 12% is due to organic growth in the volume of production.»
I disagree with this view of the galvanizing services industry, because the author writes like there were no barriers to entry in the business, like there weren't very high investments to make. Moreover, he thinks the economy is perfectly efficient, that just because profit margins are high, automatically other investments would be attracted to the industry, driving profit margins back down again. But, in the real economy, not in text books, the economy is many times inefficient. And if you think of it, do you think there are many people (or any people), or any companies, excited about the galvanizing services industry or planning to open new factories in that old industry? I don't think so ... young people, investors, rush to new industries, not old ones. This is a partial explanation to why so many commodities are booming, because for decades supply didn't increase, but the products are still needed and probably will continue to be needed for centuries to come.
Anyway, getting out of this philosophical talk, the market accepted what the Fools said about the industry and decided to price NGA at 8 times earnings. This isn't the first time I've seen something similar happen (and me making an investment mistake because of it), do you remember PCU? The stock was trading at $50 or so when I bought it and it was valued at 8 times earnings, even though it was growing strongly.
Investors thought, exactly like in NGA's case, "copper is a commodity, if the price stays high for long enough new supply will enter the market and the price will come back down. Copper will eventually fall, no doubt about it. Let's price PCU at 8 times earnings, despite its high growth rate".
I fell for this trap and sold it with a small loss if I remember correctly. And how much is PCU now? It is at $136.52, 173% above my selling price less than a year ago :'( More importantly, the Price Earnings Ratio expanded from 8 to 15, so more than half of the rise was due to multiple expansion. I believe this happened because, with time and growing earnings, investors saw that despite copper being a commodity and despite the price being high, supply didn't rise as it would happen in a perfect market economy, an economy that only exists in theory.
I expect a similar outcome in NGA. But this time I'll reap the reward, instead of selling for a loss. Got to learn from my previous mistakes to improve. They've cost me money and I'm not willing to pay a second tuition fee.
I'll continue holding NGA for the long term.
I no longer base my investment decisions on the chart or on what others think about the future value of a company, but on what I think. And my believe is NGA's revenue and earnings will continue to grow and its earnings multiple will expand from the current 8 or so to 16 or so. My believe is the stock will more than double over the next 12 months and I'll continue holding, regardless of what the stock price does over the short term.
We've had the first positive day in 6, let's see if it gets some traction. I'll continue holding NGA for the long term regardless of the short term market action.
Today I've analyzed a stock which has been growing strongly, FSTR (http://www.3stocksonfire.org/trading/index.php?topic=10288.msg107148#msg107148), which operates in a field related to NGA's business. It shows there has been heavy investments in infrastructure in the US, and probably that trend is set to continue.
NGA's revenues and profits are growing by leaps and bounds, since 2005 EPS was $0.05, 2006 was $0.36 and I'm expecting something north of $0.8 for 2007 (the company already made $0.36 EPS in the first half of the year).
I believe it may take its time, and it has been taking time, but NGA has all the ingredients, from a fundamental standpoint, to be a big long term winner, so I'll hold the stock throughout all ups and downs, focusing on the long term outcome of this investment.
Nice 3.1% advance day for NGA.
Management doesn't talk much. Probably it is better this way, because when they talked over the 2nd quarter earnings release, they said something they shouldn't, specifically, they blamed the company's spectacular performance on the strength of the US economy when most people were forecasting an economic slowdown:
«Commenting on the results of the second quarter 2007, Ronald J. Evans, president and chief executive officer, said "The strength of the U.S. economy continues to support hot-dip galvanizing demand at above historical levels.»
I hope they're more intelligent when they report 3rd quarter earnings, because a company growing like NGA deserves a lot more than a Price Earnings Ratio of 9.
I'll keep holding NGA for the long term.
NGA had a remarkable day yesterday, but it needs to close above $8.80 to be in a confirmed bullish mode.
If I get away with NGA, and get, say, a 100% plus profit, it will be great because it was another step in my learning process.
Motley Fool said bearish things about the galvanizing services industry, saying it is a "commodity like" business, with rising and falling profit margins according to the economic cycle. I disagreed, because I heard (and believed) that type of talk before (in PCU's case) and that made me lose a 150% advance in less than 12 months. Not this time, no, no.
If a stock is growing strongly and it has a cheap valuation, it will most likely go up. Tell me, what would happen if NGA were to stay at 8 times earnings and grow 100% a year for the next three years? In 2008 it would be at 4 times earnings, in 2009 at 2 times and in 2010 one could buy the company and get his investment back in just one year, and then enjoy another 30 years or more of clean profits. This is why NGA needs to rise, it is too undervalued ...
Because to say that NGA won't keep growing like it has been growing because fat profit margins will increase supply in the sector is not to know how inefficient an economy is, at least over the short/medium term. Things move much more slowly than economists and investors think. I don't see anybody excited about the galvanizing services industry. Most people don't even know what that is. That's why NGA is still so cheap, but it won't last, in my opinion.
I'll continue holding NGA for the long term.
7.7% decline on Friday for NGA. My joy didn't last long ... anyway, it didn't fall as much as it rose on Thursday.
The long term fundamental story didn't change, I see NGA at $14 plus in 12 months time and I'll keep holding the stock.
After what AZZ said about the quarter ended in August 31st:
«Mr. Dingus continued, "Robust market demand for our galvanizing services has positively impacted our ability to maximize our operating results. While pricing is up significantly, we are most pleased that our tonnage processed continues to increase. The second quarter results reflect the expensing of higher zinc cost, yet margin remained about the 25 percent level. The recent reduction in the cost of zinc will require us to closely monitor our operations and pricing for the balance of the current fiscal year in order to maintain margin levels. The programs of providing a superior level of service and performance to our customers continue to position us for further growth and expansion of our served markets and increased market share."»
I expect NGA to report strong Q3 results, which ended in September 30.
There aren't any analysts covering the stock, but I'm expecting $0.8 EPS for the full year of 2007. This would put the stock trading at 10 times earnings, but I believe it should trade at least at 15 times earnings, or at $12 a share, say, between now and the close of Q1 2008.
I'll continue holding NGA for the long term.
NGA almost did it, close above the $8.8 short term resistance level. Perhaps today? We'll see ...
Anyway, I'll keep holding NGA whatever happens to the chart, because fundamental analysis tells me the company is worth about $14 a share.
QuoteNGA almost did it, close above the $8.8 short term resistance level. Perhaps today? We'll see ...
No, still not on Friday ... maybe today, I'll keep holding NGA.
North American Galvanizing & Coatings Reports Record Third Quarter 2007 EarningsLast update: 10/29/2007 8:00:00 AMRevenues increase 27%, Net Income up 101%, Earnings Per Share Increase 81% - For the nine months when compared to prior year TULSA, Okla., Oct 29, 2007 /PRNewswire-FirstCall via COMTEX/ -- North American Galvanizing & Coatings, Inc. (NGA) announced today record earnings and sales for the first nine months and the third quarter of 2007. Consolidated net earnings for the 2007 third quarter were $2.5 million ($.20 per share), compared with $1.1 million ($.09 per share) in the third quarter of 2006 which represents a 130% increase in net earnings and a 122% increase in earnings per share. All per share data are reported on a fully-diluted basis and have been adjusted to reflect the effect of the June 8, 2007 three-for-two stock split effected by a stock dividend. The Company's net earnings for the first nine months of 2007 were $7.1 million ($.56 per share), compared with $3.5 million ($.31 per share) in the first nine months of 2006 which represents an 81% increase in earnings per share. Revenues for the nine months rose 27% to $68.2 million compared to $53.8 million for the comparable period last year. Commenting on the results of the third quarter 2007, Ronald J. Evans, president and chief executive officer, said "Strong overall market demand for hot-dip galvanizing continued to support the conditions for the Company to achieve record results. Strong customer demand, enhanced operating efficiencies, ongoing cost control and improved pricing, all contributed toward our record profitability. Evans added, "I am also pleased to report that the scheduled installation of a new and bigger galvanizing kettle and furnace in our Canton, Ohio facility was completed on time and budget." The plant was shutdown for approximately three weeks in early July. The Company purchased 28,500 shares of its common stock for the treasury in open market transactions at an average price of $5.33 per share during the quarter. The Company's stock buyback program has a remaining balance of $.6 million. During the first nine months of 2007, total debt (current maturities and long-term obligations and bonds payable) decreased by $6.6 million to $2.7 million. As of September 30, 2007, the Company had unused borrowing capacity of $22.5 million under its existing lines of credit. The Company also reported that the move to the NASDAQ on August 2, 2007 had been completed without interruption to stock trading activity.
Thanks Aussie :)
• North American Galvanizing & Coatings Reports Record Third Quarter 2007 Earnings (http://finance.yahoo.com/q?s=nga)
PR Newswire (Mon 8:00am)
This was the best quarter ever in terms of EPS, which was $0.20, but not in terms of revenue, because revenues were $21.54 M in this quarter and $23.121 M in Q2 2007.
However, management was much smarter with their talk this time. They not only didn't mention the sequential revenue decline, they mentioned their work for future growth ...
«Evans added, "I am also pleased to report that the scheduled installation of a new and bigger galvanizing kettle and furnace in our Canton, Ohio facility was completed on time and budget." The plant was shutdown for approximately three weeks in early July.»
... and even that they bought a few shares for Treasury ...
«The Company purchased 28,500 shares of its common stock for the treasury in open market transactions at an average price of $5.33 per share during the quarter. The Company's stock buyback program has a remaining balance of $.6 million.»
... also this mention to the balance sheet is positive:
«During the first nine months of 2007, total debt (current maturities and long-term obligations and bonds payable) decreased by $6.6 million to $2.7 million. As of September 30, 2007, the Company had unused borrowing capacity of $22.5 million under its existing lines of credit.»
Overall the earnings report is quite positive (especially the EPS number), the only negative being the sequential revenue decline. This can be explained by the factory being closed for three weeks or by seasonality (historically the 3rd quarter is a just a bit weaker than the 2nd - perhaps because of summer vacations, I don't know).
Anyway, we already have $0.56 EPS in the first 9 months of the year, so now I see about $0.75 for the full year of 2007, which puts NGA trading at about 11.5 times earnings.
EPS grew 81% and P/E Ratio is just 11.5 and this makes the stock very cheap from a fundamental standpoint.
It should have a P/E of at least 20, in my opinion. I'll keep holding NGA for the long term.
Beautiful how NGA was able to close the gap in today's session, this way hopefully the 3rd quarter earnings release will provide some more fuel to the rise over the short term.
Let's compare the 3rd quarter numbers with what I have in my valuation model:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41440;image)
1) Dilution Factor
I have 1% (1.01 in the model).
Using the following information ...
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41441;image)
... I calculate that the fully diluted share count was 12,266,667 shares in Q3 2006 and 12,565,000 in Q3 2007. This means 2.43% dilution, so I must increase my dilution factor a bit.
2) Revenue CAGR
I have 25% and revenue growth from Q3 2007 was just 6.9%. However, if we consider the 9 months so far in 2007, revenue growth was 27%. It seems to be some loss of momentum on the revenue growth side, but maybe that was because one of its factories was shut down for three weeks (probably not because NGA has 10 plants). I should decrease my revenue CAGR estimate, say, to 15%.
3) Net Profit Margin Estimate
I have 10% and in Q3 2007 it was 11.66%. So, better than expected here. However, I think this was due to a lower tax rate. In Q3 2007 the tax rate was 31.65%, while in Q3 2006 it was 42.3%. For the nine months so far in 2007 the tax rate was 36.9%. So definitely a lower tax rate played a role in the Q3 EPS number. If the tax rate were, say, 38%, EPS would have been $0.18 and net profit margin would then be 10.6%.
4) EPS Multiple Estimate
I have 19.84, but somehow I find this hard to believe ... The Industrial & Equipment Components industry now trades at 18.05 times earnings (http://finance.yahoo.com/q/co?s=NGA) and AZZ is trading at 15.6 times earnings.
I would say NGA will enjoy a maximum earnings multiple of 15, like in the past, remember?
I feel the need to change some estimates to my valuation model:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41442;image)
Oh boy, increasing the dilution factor to 2.43%, decreasing the revenue CAGR to 15%, leaving the net profit margin estimate unchanged at 10% and decreasing the earnings multiple estimate to 15 made NGA look unattractive at this point.
Actually when I saw those $9.8 in the pre-market today I felt it was a selling opportunity, but couldn't find an immediate rationale for it.
The more I study the stock market, or let me say it better, the more I study specific stocks, the more I realize how Warren Buffet was right when he said something like this:
«If it only took knowing how to divide two numbers to make big profits in the stock market ...»
I've been experiencing owning stocks with a low Price Earnings Ratio that don't go up (at least, not meaningfully), while I watch other stocks with much higher, sometimes even totally irrational earnings multiples continue to move up (like, for example, BIDU, trading at 164 times earnings and moving sharply higher :o))
Investing from a business perspective tells me owning a galvanizing services company probably isn't the best long term investment idea for the Main's capital, even though the stock looks cheap from a Price to Earnings Ratio perspective.
I'm going to SELL NGA around tomorrow's open.
I don't know why, but my Reuters Data Link service (which I use to automatically update the Metastock database) doesn't recognize NGA as a stock symbol. This happens since NGA switched from the AMEX to the Nasdaq.
I just wrote Reuters Data Link to see if they can solve the problem.
In the meantime, here's a chart from www.stockcharts.com: