3SOF

Quote from: tireslinger on February 16, 2007, 09:25:28 PM

Quote from: jmccar2 on February 16, 2007, 06:57:05 PM
Well Tireslinger.... Perhaps we should've had some faith

jmccar2, I am happy for all of those that are still in the stock, and I hope it continues to go well for them. I have no regrets for selling the stock. CPNE.OB is a much better stock. Check out my valuation of CPNE.OB on the main message board and you will see what I mean.

By the way tireslinger, CPNE's thread has so many messages that I need to go back and download your CPNE's fundamental study (moreover let me increase your rating ).

I also believe CPNE has more potential than PFSW, but since I don't invest more than 6.66% of the Main's capital in one single stock (of course, then that percentage can change due to the stock's own rise or fall), I need 15 different holdings to be full invested - this is one of my most important money management rules.

I understand your reasoning on PFSW, though. You don't like it mainly because the company isn't profitable yet. I also worry about that.

But this management doesn't have the habit of diluting shareholder's value, and 2007 sales are expected to come in at $482.2 M. The company lost "just" $7 M in the nine months through September 2006. My take is it probably isn't too hard to transform a $7 - $10 M loss into a $10 M annual profit, when you have $482 M in revenues!

And, with an annual profit of $10 M PFSW is trading at 5 times earnings. And what if, instead of $10 M net income, they get $20 M net income? Net profit margin would still be low, at 4.15%, but the stock probably would be valued at an average 16 times earnings multiple, that is, $320 M. That would mean a price per share of about $6.78.

Technically the second shoulder of the inverted head and shoulders pattern is in. What PFSW needs now is to breakout above the $1.18 all important neckline. The technical projection of that breakout would then be ($1.18-$0.91)+$1.18 = $1.45.

But we still need to see if there's validation of the technical pattern.

I'll continue holding PFSW.

I was taking a look at the ecost.com reseller ratings, I dont how ecost.com has extremely poor reseller ratings. I dont know if  PFSW management can turn around ecost.com in the short term they need much better customer service, support, and a consumer friendly return policy.

http://www.resellerratings.com/store/eCost

Compare the ratings to tiger direct

http://www.resellerratings.com/store/Tiger_Direct

So we can get an idea of how a better managed profitable online store is ran. Here is one of the best online stores out there.

http://www.resellerratings.com/store/Newegg

Here an example of a once good online computer store that turned for the worse and went downhill and eventually bankrupt.

http://www.resellerratings.com/store/Monarch_Computer_Systems

Reading the customers feedback can give you an idea of the trend of an online store and if they will have repeat customers or continue to lose more existing and potential customers.

Quote from: David Randolph on February 19, 2007, 11:57:43 AM
Technically the second shoulder of the inverted head and shoulders pattern is in. What PFSW needs now is to breakout above the $1.18 all important neckline. The technical projection of that breakout would then be ($1.18-$0.91)+$1.18 = $1.45.

But we still need to see if there's validation of the technical pattern.

There it is, break and close above $1.18 on some decent volume!

Great info nullzero, thanks

The way I see it, those poor consumer ratings and prospects are completely priced in by the share price. That partially explains why SYX is a $1.06 B market cap company and PFSW is just $55.76 M, that is, almost 1/20 of the value.

The one analyst covering the stock, which is Dutton Associates, is expecting $482.2 M in revenues in 2007. My take is, it can't be all that difficult to turn a $10 M annual loss into a $10 M annual profit, when you're selling close to $500 M.

PFSW's valuation is reflecting the $10 M loss. But there's the real possibility of the company, with some restructuring and cost cutting efforts, turning the corner towards profitability. Moreover, the recent press releases show PFSW's business outside of www.ecost.com (still the most important part) is growing.

If the can pull out a $10 M positive net income in 2007 I see a $150 M market cap, and that is almost triple of what it is now. I have this expectation and will keep holding the stock for as long as I have faith in it, that is, for as long as incoming information doesn't reveal a different landscape.

Technically the stock just confirmed my expected inverted head & shoulders pattern. Now it will probably run to test recent 2007 highs of $1.44. I'll continue holding PFSW.

Nothing new on PFSW, I'll continue holding the stock.

PFSW continues to digest the strong gains it had in the beginning of the week. I see the stock has this habit of breaking its "natural" levels by just a bit before the trend continues. The trend is now bullish, as one can see by checking the stock above the 50 and 200 days moving averages.

Let's watch www.ecost.com for a minute. They could improve the design of the website, I don't know about those blank spaces, www.tigerdirect.com looks a lot more aggressive - but, as I've been saying, the market is already valuing both companies very differently. And PFSW is a lot more than www.ecost.com, as SYX is a lot more than www.tigerdirect.com.

I feel PFSW will surprise everybody throughout 2007, as their traditional business is picking up steam.

I'll continue holding PFSW.

PFSW fell just a bit below the neckline, but this stock has this habit of breaking down by just a little bit before running higher (the same thing happened when building that second shoulder as you can check on the chart below).

The fundamental case was completely explained on the rest of this thread, nothing changed as there weren't any news out, I'll continue holding PFSW.

I made a quick dilution test on PFSW and was worried because I saw the share count rising a lot on a quarterly basis, but then I remembered the merger with eCost happened in 2006 and that totally explains the share count increase, because PFSW had to issue new shares to eCost shareholders (18.98 million new shares).

But I have some worries that more dilution has occurred in December and January, we'll just have to wait for the 4Q SEC form 10 to find out.

Technically the stock unfortunately couldn't "hold the bar" of the bullish head and shoulders pattern, but since it is trading above the 50 days and 200 days moving average I still see it as bullish.

I wonder if the 4Q, being the strongest for www.ecost.com, won't show an improving financial picture.

I'll continue holding PFSW.

I fear a consumer led recession will make things worse at www.ecost.com. Also PFSW didn't respect the chart. I also fear dilution due to a weak balance sheet.

I'll take my 8 or 9% loss on PFSW and move on.

TARGET: $1.5+ AFTER EARNINGS on 8/14/2007


..........PFSW HIGHLIGHTS...............

- AMAZING eCOST DIV. TURNAROUND!!!

- $450M REVENUES

- $45M MARKET CAP

- STRONG BALANCE SHEET

- POISED TO RETURN TO PROFITABILITY

- On July 9, 2007 PFSW surprised the street by announcing that on August 14, 2007 its eCOST division will report $26 M in revenues for Q2 2007. This a 19.25% revenue growth from Q1 2007.

- In a previous CC management estimated that with its new cost structure, online retailer eCOST would be profitable when it reached $25M in revenues.

- The poor eCOST performance, after being acquired in early 2006, was the main reason for PFSW losses and poor stock performance. Prior to the eCOST acquisition PFSW traded North of $3.

- The eCOST turnaround is very timely as the strongest season for this division, the Holiday season, is coming up.

- The eCOST turnaround is due to a focused effort by management to improve its  performance by improving customer service, product selection, marketing results, etc..

- In Q1 2007 PFSW predicted that for the whole group it expects to net EBITDA of $8 to $10M for 2007. PFSW reported an EBITDA of only $2.5M for 2006. This is a 300% to 400% improvement!!!

- In Q1 2007 PFSW reported EBITDA of $0.8M

- Based on the above, PFSW will have to average about $2.5M to $3.0M in EBITDA for 2Q, 3Q, and 4Q  to meet its guidance for 2007 .

- Should PFSW report an EBITDA of $2.5M for 2Q 2007 on August 14, 2007 it will beat 2Q 2006 EBITDA loss of $0.7M by 500%.

PFSW generates about $450M/year in revenues and its market cap is only $46M!.

Fair value has been estimated to be $6 based on comparables should  PFSW return to consistent profitability as it did prior to the eCOST acquisition.

PFSW has a solid balance sheet and solid fundamentals. I expect that it will be trading North of $3 after Christmas. Even at $3, PFSW would still be trading at a deeply discounted P/S of about 0.3.


ABOUT PFSW:


PFSweb develops and deploys integrated business infrastructure solutions and fulfillment services for Fortune 1000, Global 2000 and brand name companies, including third party logistics, call center support and e-commerce services. The company serves a multitude of industries and company types, including such clients as LEGO, Riverbed, Fathead, CHiA'SSO, FLAVIA� Beverage Systems, Hewlett-Packard, International Business Machines, Hawker Beechcraft Corp. (formerly Raytheon Aircraft Company), Rene Furterer USA, Roots Canada Ltd., and Xerox.

Through its wholly owned eCOST.com subsidiary, PFSweb also serves as a leading multi-category online discount retailer of new, "close-out" and manufacturer recertified brand-name technology and consumer electronics for consumers and small to medium size business buyers. The eCOST com brand markets approximately 100,000 different products from leading manufacturers such as Apple, Canon, Citizen, Denon, Hewlett-Packard, Nikon, Onkyo, Seiko, Sony, and Toshiba primarily over the Internet and through direct marketing.