3SOF

Unbelievable, people are so bearish on the US consumer that they're selling SYX at 10 times earnings, even though the company has been consistently growing revenues by 20% a year and expanding its profit margins.

Once these macroeconomic fears subside, and I'm convinced that they will, SYX will have to move towards $30 a share, for a 15 times earnings multiple, and it would still be cheap there.

I'll keep holding SYX for the long term.

SYX has been doing as I expected, or perhaps even better than I expected, from a fundamental standpoint. However, I'm losing 11% in this investment, because the mood of investors got negative and they're selling shares for a cheap price, instead of buying them.

They think there will be a recession in the US. Even if they're right, the US economy has been growing say, 3% a year, on average, and SYX has been growing revenues by 20% a year. If the US economy shrinks 1% in 2008 (I don't think so), I expect SYX to still grow revenues, why not? Anyway, I have just 11% revenue CAGR expected in my valuation model.

I believe SYX is extremely cheap at this point and it should be bought, not sold. I'll keep holding SYX for the long term.

SYX had, by far, its best quarter ever in Q3 2007. Yet, the stock is still very far away from its all time high, set in October 1996 at $53 a share.

$0.47 EPS in Q3 2007 tells me SYX will earn at least $2 EPS in 2008, which means the stock is trading at just 10 times forward earnings.

If you're a long term investor and believe the US economy won't fall apart, now is a great time to invest in SYX.

Quote from: David Randolph on November 15, 2007, 08:20:24 AM
SYX had, by far, its best quarter ever in Q3 2007. Yet, the stock is still very far away from its all time high, set in October 1996 at $53 a share.

$0.47 EPS in Q3 2007 tells me SYX will earn at least $2 EPS in 2008, which means the stock is trading at just 10 times forward earnings.

If you're a long term investor and believe the US economy won't fall apart, now is a great time to invest in SYX.

I had to think about what you said and asked myself, what stocks would I be willing to hold through hard times or a recession? Unfortunately SYX was not on the list. No matter what I think SYX is worth, or will be worth at some point in the future, I'm not going to argue against the market. Sold half yesterday at small loss, and wasn't going to let the other half turn into a loss, sold the other half this morn, so basically a wash. By the way, MALL has been getting totally devastated. Unfortunately SYX never got the runup that MALL had.

QuoteI had to think about what you said and asked myself, what stocks would I be willing to hold through hard times or a recession? Unfortunately SYX was not on the list. No matter what I think SYX is worth, or will be worth at some point in the future, I'm not going to argue against the market. Sold half yesterday at small loss, and wasn't going to let the other half turn into a loss, sold the other half this morn, so basically a wash. By the way, MALL has been getting totally devastated. Unfortunately SYX never got the runup that MALL had.

I understand your reasoning and respect your decision BigSully1, even though I fully disagree with it, since I don't use macro calls to judge my investments.

Well, if you don't want SYX's shares, insiders do:

CFO bought 1,000 shares last Thursday

I know this isn't much, but it's a start. At least he's not receiving a lot of stock options, he's buying his shares in the open market like we do.

SYX has been doing everything right from a fundamental standpoint, growing revenue at a 20% annual clip and expanding gross and net profit margins in the process, better than I expected on the revenue front. Now, the market isn't responding as expected, because investors foresee a recession in the US economy. But, as SYX's management said, retailers in general are seeing their market rise about 4% from the year ago levels, while online commerce is growing 20%. If, instead of growing, say, 3% a year, the US economy grows just 1% a year, I say that online commerce will grow not 20%, but 10% a year. This is roughly what I expect for SYX over the long term and it is enough for the company to continue expanding its net profit margin, from the current 2.6% to 5% in a couple of years time.

Technically the stock touched its slowly ascending support, it should rebound from these levels. Fundamentally I believe SYX is a stock to own for the long term and that's what I'll do.

The CFO buys, the stock goes down anyway. Valuation is very attractive, it doesn't matter, investors are selling. I believe this is all due to the general market weakness and nothing else, and, as I wrote at the new SPY's thread, I believe this weakness will soon turn into strength.

I'll keep holding SYX for the long term.

Online retailers, or e-tailers, are doing better than expected this shopping season:

Cyber Monday online sales jump 21%

As I read SYX's earnings release, I see they don't say anything about the physical stores they're opening. I believe this could be a huge growth driver in the upcoming years, as the company just opens more and more stores across the US and then the World. I think there can be interesting symbioses between an e-tailer and a brick and mortar retailer. Management said things are going very well on these aspects. The company has 10 stores now, I believe. I wonder if one of you could visit one of Systemax's stores ... I'll give you the locations over the next update.

SYX trades at about 10 times earnings and EPS grew 42% from the year ago levels in Q3 2007. This is very cheap on my book. Technically the stock finally started to respond, rising 6.5% yesterday.

I'll continue holding SYX for the long term.

SYX's EPS in the 3rd quarter grew 42% from the year ago level and yet the stock trades at a forward p/e of about 10. It doesn't get much cheaper than this.

SYX's fundamental developments have been exactly as I expected ever since I first bought the stock, around $15 I believe. The only thing not right is that it should be a $30 - $40 stock, instead of $20, to be fairly valued. I believe it's just a matter of time for this to happen.

SYX closed unchanged and there weren't any news out. I'll keep holding.

1 to 5 million consumers are defaulting on their credit cards and will be unable to buy electronic goods in the upcoming years. The other 250 million consumers are enjoying lower interest rates and their appetite for shopping online keeps growing.

SIX is growing EPS 42% from the year ago levels. It trades at a trailing p/e of 13.2 and a forward p/e of less than 10. The company's growth will continue for many more years in my view. The stock is incredibly cheap, it will go higher over the long term. 

SYX is within an interesting technical pattern. We have 5 touches on its medium term ascending support and 4 touches on its descending trendline. Which way will it break?

Fundamental analysis tells me there will be a bullish breakout. We'll see what happens.

I'll keep holding SYX for the long term.

QuoteSYX is within an interesting technical pattern. We have 5 touches on its medium term ascending support and 4 touches on its descending trendline. Which way will it break?

Fundamental analysis tells me there will be a bullish breakout. We'll see what happens.

As expected, bulls, backed by positive fundamentals, won the bull/bear fight on SYX, at least over the short term. Still on the technical side I notice that SYX had volume above average on Monday, when we had just half a session.

Fundamentally I see SYX earning $2 per share in 2008 (I expect about $1.64 EPS for full year 2007) and that should put the stock in the $30 - $40 range.

I'll keep holding SYX for the long term.

Big news out for SYX, it seems they're buying a part of CompUSA for bargain prices:

• Systemax Announces Definitive Agreement to Acquire Selected Assets and Retail Stores from CompUSA
Business Wire (Sun 1:43pm)

This comes on the wheels of the following news:

CompUSA bought by Gordon Bros. Group, to close stores

This acquisition will make SIX add www.compusa.com to www.tigerdirect.com and potentially 16 new retail stores to its existing 11 stores. The price, even though not objective, seems compelling:

«The direct costs of the acquisition will depend on the specific retail store locations that are ultimately taken over and are expected to approximate $30 million. The indirect costs of the acquisition – primarily integration and recruiting costs, legal fees, inventory purchases, and other expenses – will be incremental to the direct costs.»

My view on eCommerce is that it will be a long term winning story, but to increase profit margins, there has to be some consolidation in the sector. Systemax seems to be one of the few survivors of this battle, taking over competitors.

Technically, after a bullish breakout, the stock came down to touch support for the 6th time and test a new support, prior resistance trendline.

I wonder how the stock will react to today's news, given that investors are so negative on consumer spending going forward, but I believe that longer term this acquisition was a good move and made on the right timing in terms of the business cycle.

I'll keep holding SYX for the long term.

SYX: New 52-Wk Low @ $16.030 dn 7.87%
Wednesday, January 09, 2008 14:15ET

This is the 1st 52 WEEK LOW alert for SYX in the past 7 calendar days.

The share price for Systemax Inc (NYSE: SYX) reached a new 52-week low today, trading at $16.030, down $-1.370 (-7.87%) from its previous close of $17.400.

The Company's previous 52-week low of $16.040 was set 246 days ago on May 08, 2007.

One year ago, the Company's shares closed at $19.010. The price has declined more than 15 percent since then.

At the time of this alert, the stock had traded 216,150 shares via 1,294 trades, 13.30% below it's 20day average of 249,305 shares.

This new 52-week low currently puts the stock:

16.23% below its 20day Moving Average of $19.136
19.16% below its 50day Moving Average of $19.830
20.75% below its 100day Moving Average of $20.227

The Company last released news on January 06, 2008:

"Systemax Announces Definitive Agreement to Acquire Selected Assets and Retail Stores from CompUSA"

oversold imho, stochastics turning positive

Check out MALL also. Looks like a possible bottom. I'm considering buying back.