3SOF

hopefully it bounce back up and close above $2.45 today.

I'm hoping there's going to be support around 2.20, we will see...

GigaMedia: Fourth Consecutive Quarter of Profit
Wednesday July 20, 7:18 am ET 
Q1 Net Profit of $1.0 Million
Highlights of 1Q05 Results -- Consolidated revenues of US$25.6 million -- Consolidated EBITDA* of US$2.5 million -- Consolidated net income of US$1.0 million -- Cash, cash equivalents and marketable securities-current of US$46.5 million

"The rest of the volatility is hype... and this stock has a lot of it... should be a fun ride."

I finalized the analysis of the Q1. I have to say that I am disappointed.

The Broadband and the Music distribution business performed as expected. I bought GIGM due to the potential of the Online gaming segment and I am very disappointed about the development here. The growth is limited (part of the reason is seasonal) and the profitability is below my expectations. I know this is partly due to the development of the new game concepts, but it is mostly due to the lack of growth.

As a fundamental investor I am as ruthless as the TA guy's. If I see that the fundamentals is not developing as I expect I sell. I have therefore sold at market price (which was 2.29 when I started writing this).

I am also a bit concerned about the accounting (especially that the equity is falling even though the company is profitable) I am however not finished looking at that. There could be good reasons for this!

I will follow GIGM with interest. I will be back if they start to produce growth in their online business. I might have to buy back at a higher level but I have to be faithful to my trading strategy.

Good luck to everybody!

GIGM did trade awfully strangely after it's last earnings release. I would at least hold until tomorrow to see what happens.

Thanks Eagerlearner,

I look at things differently. It is not the sector that disappointed me but GIGM. I still want to be exposed in the sector so I will buy CRYP today. If not before then at the close.

CRYP is a more established player and a pure Online Gaming play.

Have you seen any interesting movement around the HQ lately 

Mike

Quote from: Michael on July 20, 2005, 12:44:02 PM
Have you seen any interesting movement around the HQ lately 

lol michael. interesting enuf, the HQ is indeed about 10 mins from where i live. lol.
good luck with CRYP. CRYP is in good TA shape as Melf analyzed. and i am hoping the best for CRYP, for local economy 

cheers!

Disappointing online gambling revs. I think the hype ran ahead of this stock..still the company has its affairs in order now and is profitable. Long term hold maybe?

The online gambling sector may take off at some point for them, but at least through March 31 2005 it was still only growing at a 6% Q/Q clip...roughly 25% annually...not bad but not enough to get anyone excited and definitely enough to get rid of the spec traders for a while...this may well be dead money for a while, but probably has a downside limited to $2 given the balance sheet and profitability...IMO

Maybe they have great(better gambling growth) 2Q numbers to report later? That is the $64 million question

Pardon my intrusion, but I see on Thunderbunny july 19th chart a powerfull signal unnoticed -negative divergence- higher prices and lower highs on slow STO and MACD lines.  Never ignore this signal.

The reaction to earnings sure is disappointing, and it damages the two short-term bullish patterns on the chart, but we're at what "should be" support.  My main concern is that we're down 16% on alot of volume.

The main reason that I bought GIGM was that it had a breakout of a two-year Symmetrical Triangle on June 13 (for that pattern, scroll up to see my chart from yesterday).   On a log chart, which I'm using,  that trendline comes in at 2.16, which is today's low.  Former resistance  "should be" support.  So far, it is.  My plan is to stick with my original stop: a CLOSE or obvious late day tank below 2.139.

On a linear chart, the top of the Symmetrical Triangle comes in today at 2.05.  Some might be using the June 23 low of 2.01 as a stop. 

Quote from: invol_inlf on July 20, 2005, 01:19:08 PM
Pardon my intrusion, but I see on Thunderbunny july 19th chart a powerfull signal unnoticed -negative divergence- higher prices and lower highs on slow STO and MACD lines.  Never ignore this signal.

That's a common misconception.  When stocks are trending, positive and negative divergences in a technical indicator are common, and they don't necessarily mean buy or sell.  Here's just one of many examples: ANF (chart below). 

During the rally from $27 at the August, 2004 low, there were a number of negative divergences between price and MACD  all along the way, but the stock kept moving higher.  This chart shows only about six months.  There was a negative divergence between price and MACD in early March, and again in mid-April.  ANF sold off some, traded sideways to down, never broke important support, and went to $74. 

If you keep selling because of all of the negative divergences in indicators, you'd have no chance of catching the rally of almost 200% in ANF over the past year.  Same with other stocks that are in strong trends, bullish or bearish.

In bear markets, you will hear "look at all of the positive divergences" as the stock continues to sink.  Those postive divergences aren't buy signals.

Never say never.  Oops, I said it again... 

http://ts-lc.sc8.finance.lycos.com/1121883040140?User=demo&Pswd=demo&DataType=GIF&Symbol=NYSE:ANF&Interval=D&Permission=1000&Ht=400&Wd=600&Display=2&Study=MACD&Param1=12&Param2=26&Param3=9&FontSize=10&LocaleID=0x0409

I had a few mails asking about my take on the prospects for the stock price.

I agree with Melf. There is support at 2.17, which I believe will hold today. It might even bounce of from there (the next support is at 2.02 this support is stronger but I can't see us test this today).  Medium term I would expect the stock to stay a bit depressed for some time. We might have to wait until Q3 before we see some action. Long-term I still love the company. It is in a bullish sector, the management is excellent and the company is in a turn around situation.

My main reason for selling was that my valuation of the company changed fundamentally with the lower growth of the online gaming business.

I apologize for any discrepancies from my direct answers but this is a process and we all get wiser as time pass!

Mike

They dropped it from 2.18 to 2.12 in the final minute.  The devils!    I'll be a seller in the morrning.  Michael is right.  That 2.01 low could hold, but that's enough for me.

I think you're right. I looked through the numbers and the only disappointing ones i could find were the comparison between 4Q2004 entertainment software and 1Q2005.

I still think they're good for another new 52 wk high considering how much they've turned the company around. How long that will take is the question.

Dear all,

I can see I get a steady flow of Smite points. I assume this is because I have told that I have sold a share or two, which I previously have talked positive about. (It can obviously also just be because you guys are tired of my endless posts on the board!)

Even though I appreciate applauds and try to learn from smite points that is not the reason why I post here.

I like the constructive debat on the site and the invaluable input I receive from the rest of you.

It is in that spirit I tell when and why I sell. I believe this is as important as to tell when and why I buy. (In fact this can some times be more valuable - I at least find it more difficult to time my sales than my purchases)

I am sorry if that offend anybody but I think it is the right thing to do.

Mike