3SOF

Since this thread is hot, I'll place this question here: "David, what do you think of the solar enegry companies, same old JASO and TSL? TSL seems to have corrected to a $39 support and bounced off; they project strong sales to continue in Germany and Italy; JASO raised their guidance right when the market took a nose dive in August and hence that PR brought little fruit. Both look pretty bullish now. JASO made an inverse H&S pattern and continues nicely up. Should we consider these?"

Thanks!

Quote from: berloga on September 04, 2007, 11:36:09 AM
Since this thread is hot, I'll place this question here: "David, what do you think of the solar enegry companies, same old JASO and TSL? TSL seems to have corrected to a $39 support and bounced off; they project strong sales to continue in Germany and Italy; JASO raised their guidance right when the market took a nose dive in August and hence that PR brought little fruit. Both look pretty bullish now. JASO made an inverse H&S pattern and continues nicely up. Should we consider these?"

Thanks!

Hi berloga, good questions

JASO and TSL have extraordinary revenue growth, but they have low net profit margins (around 10% the last time I've checked, but they're expected to go lower, as the average selling price goes down). Anyway, I need to check them again.

On the solar sector, HOKU has been very strong lately (and it's up 20% today) and ASTI (up 9% today), with Norsdk Hydro back up, also looks very promising. If it weren't those warrants at $11 this stock would be a lot higher now.

If I were to look for solar energy related companies I would be more inclined to buy HOKU or ASTI, instead of TSL and JASO. They are smaller and have much more upside potential in my view.

You're right, we should have at least one alternative energy related stock, I'll study one of these tomorrow.

Good luck

ICOC made an attempt at breaking out to new closing highs above the $12.08 resistance level, but, because it was up 42% in just a couple of weeks, it fell back on profit taking.

The way I see the fundamentals of the company, I say the stock may work sometime here around the $12 level, but higher prices, around $16, are coming. I'll patiently keep holding ICOC.

What a beauty, ICOC is. This global industrial company is now the largest holding of the Main Portfolio.

After a couple of months of heavy turbulence, the stock closed at a new 52 week high yesterday. I'm glad I've held throughout the storm and I'll keep holding.

ICOC was off 6% on Friday to touch its new support area around $12, which previously was a resistance. Fundamentals are attractive, as we've seen throughout this thread. I'll keep holding ICOC.

ICOC rose 2.1% as it reacted positively to its new $12 support, prior resistance level. Fundamentals are still attractive, even though, according to my valuation model, ICOC is the least attractive stock currently in the Main Portfolio, with "just" 52% to go until the optimal selling price. But fundamentals can improve further, we'll see about that in the next earnings report. 

I'll keep holding ICOC.

ICOC, with 68% of revenues in the latest quarter coming from outside the United States, is the Main's investment on global growth. Everyday it seems like the stock will fall back down, but it keeps building.

Sooner or later ICOC will close above $13, on its way to $16-$18, because it is still cheap (about 15.6 times earnings, compared with 21 for its industry average, and growing 37.5% a year, while the industry is growing just 5.8% a year).

I'll keep holding ICOC.

QuoteSooner or later ICOC will close above $13, on its way to $16-$18, because it is still cheap (about 15.6 times earnings, compared with 21 for its industry average, and growing 37.5% a year, while the industry is growing just 5.8% a year).

Indeed, ICOC closed above $13 (almost above $14).

I've been thinking about ICOC's current weight in the Main Portfolio, which is 11.2%, the largest holding. I thought that perhaps I could sell some of the position, locking in part of the profits and reducing the weight to a more normal one ... but if I did that I would have two problems:

1) I would be throwing away my money management scheme advantages, which are to let the stocks where the market agrees with my fundamental reasoning to have more weight, and to let the weight of the losers go down, essentially by always investing a fixed portion of capital in each holding (6.66% of total equity) and then never average up or down on the initial position, whatever happens. This is where my "respect for the market's opinion" goes at this point in time (in the past I've also used stop losses and trailing stops, which proved prejudicial over the long term).

2) I don't think 3 SOF Premium subscribers want to read "sell just a bit here" and then later "buy back that bit now that's a touch lower". For me, a Main holding is either a "HOLD" or a "SELL". Never a "SELL a bit", which would only cause confusion. I'm sure that, even though I don't recommend doing it, everybody can take some profits and buy back on reactions if that's his style.

As look to ICOC's valuation model it seems so reasonable ... perhaps it will be possible for the company to expand its net profit margin, beyond my 7% long term estimate - that would be super. But it's still early to change anything in the model. My current thinking on ICOC is to hold it until the optimal selling price of $18.96 is reached, and then I'll sell for a meaningful profit.

The trading plan for ICOC continues to be: HOLD.

Nothing changed on ICOC, the stock continues to be relatively strong, and it's not just a day or two, but a persistent issue. I'll continue holding ICOC.

Perhaps ICOC needs some rest, I could live with that. Anyway, fundamentals are still attractive so I'll continue holding the stock. This is global company, with 76% of its revenues coming from outside of the US (even though it is US based).

David, with the dollar going doing to the abyss as it is, US companies that have their revenue originated outside USA will have a fictious increase due to the dollar devaluation, correct?

Quote from: Dracull on September 19, 2007, 10:34:39 AM
David, with the dollar going doing to the abyss as it is, US companies that have their revenue originated outside USA will have a fictious increase due to the dollar devaluation, correct?

That's correct Dracull. But you know, for Americans, more dollars mean more dollars, that's not fictitious. Shares are also measured in USD. When the USD goes down, US companies get cheaper for international investors.

ICOC keeps moving up, I'm not sure if it is because it is undervalued, because it has 76% of its revenues coming from outside the US or because the price of oil is at an all time high (not if one considers inflation). Or if it is because of all this together.

Until we get more fundamental information I say the fair price for ICOC shares is about $19, so I'll keep on holding ICOC.

ICOC has been incredibly resilient. Of course, there will be negative days down the road, but I'm not willing to take profits before the optimal selling price of my valuation model, which is $18.96, is reached. Or else there's going to be some new fundamental information that will make me revise my estimates upward.

For now the trading plan for ICOC is hold.

It comes as no surprise that ICOC had a negative day on Friday, since the stock was up 76% in about a month. Still, the intrinsic value, given the current fundamental trends, is superior, so I'll hold ICOC throughout the corrective period. I expect to take profits around the $19 area, if there aren't any new fundamental developments.

Zack's published a few lines about ICOC yesterday:

«ICO, Inc. (Nasdaq: ICOC) is trading near a 52-week, which was reached last week. In early August, the company posted fiscal third-quarter income from continuing operations of 20 cents per share. The result topped the consensus estimate by 25% and improved on the year-ago result. Record quarterly revenues of $113.4 million eclipsed the previous year's total by 38%. ICOC offers a net margin of .0.04 and earnings growth of 100% for the most recently completed year, compared the year-prior.»

The stock rose 2.5% yesterday, while the S&P 500 went down about 0.5%. I think that with some more patience I'll be able to take profits in the $19 area, this before the 3rd quarter earnings release. Just 29% to go. I'll keep holding ICOC.