3SOF

OFI was a stock that I picked yesterday to the 3 Stocks on Fire Portfolio

It was up 47% yesterday on what were amazing news:

• Overhill Farms, Inc. Signs New Key National Account
Market Wire (Thu 9:30am)

Read it all with attention because there's not just one positive development, but several.

I estimate OFI's calendar 2007 revenues at $270 M. The market cap is just $67 M, so the Price to Sales Ratio is 0.25. The Processed & Packaged Goods industry average is 1.09, so, using this measure, OFI should rise another 300% to be valued at average.

Moreover, the company is profitable, fiscal 2006 EPS was $0.34. So the earnings multiple is $4.4/$0.34 = 13. The industry average is 23. But earnings will probably grow by leaps and bounds in fiscal 2007, with this new big costumer and growth with existing costumers.

Here's the company's website: www.overhillfarms.com

I like it, 35 years in the business and 800 employees. It doesn't look like a $67 M market cap company, does it?

Unfortunately I couldn't send you an intraday alert yesterday, because that's against our policy for the Main Portfolio. The stock was up an additional 5.7% yesterday on after hours. That might mean a breakway gap from the $4.4 resistance level you can see on the chart below, to a new all time high.

I'm undecided between buying at the open, or trying to grab it on a dip to close the gap. Here's how I'm going to do it: I'll add it to the Main Portfolio at the open, but if you're afraid of buying so high, try to pick it up between $4.40 - $4.50, when it closes the gap, on your own risk of missing the trade. But please, do not put orders on the pre-market that can inflate the opening price and ruin the short term momentum.

I'll sell the stock at the 3 Stocks on Fire Portfolio on its first negative day, but I plan to hold it here on the Main Portfolio for the long term, because I enjoy the business (food will never go away) and the valuation is extremely appealing.

 HIHO   start  moving up but Volume is low. I like this stock

Quote from: stoynalina on January 26, 2007, 12:30:41 PM
HIHO   start  moving up but Volume is low. I like this stock

Hi stoynalina, this isn't the right place to talk about HIHO. This thread is exclusive to posts about OFI.

In fact I covered HIHO a few days back on the 3 Stocks on Fire Portfolio message board  and rated it with a "Long Term Positive".

I'm sure you can also find info about it on the Stock Picking Board.

Thanks for your 14 days free trial, I hope you enjoy the Premium Service

Technical & Fundamental analysis for OFI:

http://video.google.com/googleplayer.swf?docId=-1677365007993484367&hl=en

I'll continue holding OFI.

Hmm, cant seem to load the video...

Quote from: tokyopua on January 29, 2007, 12:33:17 AM
Hmm, cant seem to load the video...

Strange. Anyone with the same problem? It works well on my computer. I may have to upload it again.

The video works fine for me. The only problem I have with OFI is that I am not in the stock, but I might fix that problem today 

I wish I could find picks like this.  Nice job as always, David! 

I also can't see the video.  Here are 2 screenshots of what I see before trying to play it and after.  This is the first time I have had problems like this with any of the videos on 3sof.

Thanks for reporting the problem tokyopua and basonista, I'll upload that video again tomorrow before the open.

Thanks basonista, you can, OFI and much better ... but keep away from those DIET's 

Quote from: David Randolph on January 29, 2007, 04:23:10 AM

Quote from: tokyopua on January 29, 2007, 12:33:17 AM
Hmm, cant seem to load the video...

Strange. Anyone with the same problem? It works well on my computer. I may have to upload it again.

It works well too in my computer

Quote from: David Randolph on January 29, 2007, 05:20:19 PM
Thanks for reporting the problem tokyopua and basonista, I'll upload that video again tomorrow before the open.

Thanks basonista, you can, OFI and much better ... but keep away from those DIET's 

I need the diet myself but my portfolio needs to gain some weight.    I'll buy DIET when I'm sure it will contribute to my waist line.

Got the video to work finally.  Not sure what was wrong before but I kept trying it until it worked for me.

I can see all other videos on this site, but I get the same screens that basonista showed in screen shots for OFI.  Tried many times but still not seeing it.  I have Internet Explorer 7, maybe that is part of the issue?

Quote from: tokyopua on January 29, 2007, 11:10:11 PM
I can see all other videos on this site, but I get the same screens that basonista showed in screen shots for OFI.  Tried many times but still not seeing it.  I have Internet Explorer 7, maybe that is part of the issue?

Just press play...that should work.

Mine looks messed up on the first frame, but comes in clear when in play mode

I've just tested the videos, both with Internet Explorer and FireFox, and they seem to be working with no problems.
Anyway, I would recommend the use of FireFox for better browsing 3SOF (and the rest of the web )
http://www.mozilla.com/en-US/firefox/

regards,

I've uploaded OFI's video again, let's see if this time it works on tokyopua's computer:

http://video.google.com/googleplayer.swf?docId=2954073843057775282&hl=en

(now it doesn't work on my computer either, I guess we'll just stay with the other video above and I'll write about what's on the video across the following updates for tokyopua)

I'm still amazed how OFI's market cap is just $79.56 M. But I have no doubts about this number, as I've read the form 10-Q filed with the SEC yesterday, and:

«As of January 29, 2007, there were 15,270,271 shares of the issuer's common
stock, $.01 par value, outstanding.»

Previously there were convertible preferred shares, but they retired or converted all of them in the past, so no problems with convertible preferred shares or dividends.

As I read the news and watch the video analysis again, perhaps it looks like my 2007 revenue estimate is too optimistic, but please consider the difference between fiscal and calendar year. On the video I'm talking about 2007 calendar revenues (my expectation is for $270 M), and on the press releases the company talks about a $200 M plus annual revenue rate, but it's commenting on their 2007 fiscal year, which ends in September 30, 2007.

Anyway, over this latest quarter (calendar 4th quarter, fiscal Q1 2007 for OFI), the company had $40,538,492 in revenues and EPS of $0.10.

With $270 M in revenues expected for the calendar 2007, it will probably earn $0.67 per share. This without any gross or net profit margin expansion, which will probably occur.

This means the forward earnings multiple is 7.78. The industry average is 26.52.

The obvious conclusion is OFI needs to rise to $17.76 to be valued at average by the market.

No doubt I'll continue holding OFI for the long term.