3SOF

Quote from: webby67 on February 22, 2007, 07:18:03 PM
jmccar: The only silver lining I still see here is that the stock remains fundamentally CHEAP based on expected '07 earnings. that has to count for SOMETHING...

tire: we wont know the actual amount of that early retirement charge until the company files its full financials probably next week. It was mentioned very very briefly in today's presentation, but not as to the specific number.

then i do NOT understand why it is down so much today and everyone is so unconfident about CPNE, well.. i believe it can not be bearish for long.

David,

Normally a 16% decline would have had me waiting to pull the trigger,lose my position then wait and wait and wait as it kept bouncing back up.But since I have been on board with 3SOF I have learned to have no worries on the fluctuations. I guess it doesn't hurt to still be up over 20% since the recommendation though  . Keep up the good work!
Brad

I have always been the type of investor that panics and sells at the bottom even though I thought I knew better. Then I would look at the stocks a few months down the road and it would have doubled in price and all of the same people that I use to discuss the stock with on the message boards would be saying "man I sure am glad I stuck it out and was patient. All the weak hands got shaken out a few months ago" hahaha ha" Its not so funny when your one of those weak hands. I am trying to focus on the big picture for CPNE.OB and the long term potential this stocks has. I think that being here on this board with all of these polite and informed people(much different from yahoo boards) will help keep me a lot calmer and help me to regain my confidence in myself.

Good read-- http://www.otcjournal.com/otcb/?p=373

David, a while back, you stated:

"For now I'm going to stick with about $0.10 EPS a quarter, that is, $0.40 EPS in 2007, and a fair earnings multiple of 36, due to the company's fat gross and net profit margins. That means $14.4 a share to be achieved during the course of 2007, and I'll keep holding for as long as my expectation is confirmed by incoming developments."

Do OTCBB stocks ever reach a "fair earnings multiple"?  Can CPNL ever reach a 36 PE without first becoming listed on NASDAQ?  I always thought that OTCBB stocks traded at a significant discount.  Would not a 10 PE be more appropriate before then?

Thanks webby, tire and dcrlin-- what a great link...I checked the otcjournal a couple times today and the editor suggested it wouldn't be before this weekend that he addressed CPNE. Coming from this fellow, who's been warning of a knee-jerk sell-off (on ANY kind of news) for a couple days now, this is comforting news. Just for the record, I'm extremely heavy on CPNE and have no intention of selling 1 share until (at very earliest) Q1 earnings are out.

Here's another silver lining (if it means anything)...Up .12 in after hours trading:

http://money.cnn.com/quote/quote.html?symb=CPNE

Budd, I saw this discussion also on the ragingbull site, where some were of the opinion that an OTC stock should now have the expectation of the industry average PE (I think it was mentioned that none have ever achieved it)...20-25 PE was suggested as reasonable. It's a great question that won't be relevant anymore once CPNE goes Nasdaq!

summarized CPNE slides from Roth conference:

cheers from SG
Oliver

Thanks for that La-londa, I saw that on the slide show today-- it definitely was a slick presentation

The proper PE valuation debate for a OB stock has been raging on ragingbull and a one conservative poster has indicated that as a rule of thuumb he attaches a PE of 10 to OTC stocks and 5 for Chinese...General consenses seems to be that with growth rates taken into account, this is a moot point...However...with todays numbers out (yes, I know 3 week delay on enrollment figures, etc.), my deepest fear is that revenue growth was due in large part to the billing dept. dragging their feet for a while on cancelling subscriptions at onlinesupplier...Now, maybe it's just me, but I noticed a scale down in rip-off report activity that seemed to coincide with preparations for this conference today. Somebody please assure me that revenues aren't (weren't)largely dependent on unsavory automatic billing practices. Here's a post from a (supercilious) ragingbull poster who tried the service-- I don't know how recently--

"i told you guys pay $50 and become memeber in 2 days. you will never touch this stock again .. i sold my remaining shares in 3.30s and am out.

GL .. don't forget to see the POS hype by becoming a member of onlinesupplier.com

if you don't puke once you go through the site, remain long"

Spelling errors and puerile writing style aside, what do you guys think about CPNE's ethical billing practices, product offering (I understand you have to pay before you see range of products) getting in the way of growth. Was the 3-week delay information that was passed by Hill to Eggman spin to mask this in any way?

Also, I need to amend my previous post...I will also sell short if David makes the call 

EMA 20 as first support

also check:
http://www.stockta.com/cgi-bin/analysis.pl?symb=CPNE&num1=3&cobrand=windchart&mode=stock

Hi La-londa,

Here's the quote I referred to earlier:

"Nice to see most of you guys try to put a positive spin on the day's action, but the fact it we had a high-volume reversal day today, on the most shares in nearly 7 months. That caused a fair amount of damage to the chart, shook out a bunch of stock - some, I'm sure, reluctantly - and set everyone back. "Buy on the rumor, sell on the news" and all that... Remember, yesterday was a bad day for the stock too, on low volume.

I did some averaging up at the end of the day, when the 2.80 level seemed to provide some support, but it has been an ugly day, no matter how you slice it.

The good thing is that the 2.75 level that provided support in the last few days has not been violated. If we can hold that level and have some brave souls step up, we may see the stock rally again next week. It will have to be new investors, not just the "usual suspects" who inhabit this board. The fast stochastics went to hell today, from 90+ to 15 - that's ugly too. If we crack 2.70 on a closing basis, the next logical support would be the 50 day MA, at 2.25 or so.

As I warned earlier, the fundamentals will only carry you so far, then the demand/supply picture rules the trading.

The Bull"

I know it goes against the nature of portfolio, but would it be within the realm of acceptability to perhaps sell off and buy back in at a lower level if these drastic drops occur?  Or, am I just being a Nervous Nelly who maybe should grow some  more courage or give up trading 

Thanks 

"

Quote from: jmccar2 on February 22, 2007, 11:50:44 PM
I know it goes against the nature of portfolio, but would it be within the realm of acceptability to perhaps sell off and buy back in at a lower level if these drastic drops occur?  Or, am I just being a Nervous Nelly who maybe should grow some  more courage or give up trading 
"

I suppose you will get different answers, but one key about trading to realize is that the final decision is/should be yours.  I have ridden a few of these high expectation stocks like CHID and GV back down to where they came from, so have elected to do that less based on technicals and have elected instead to take profits more often when the chart goes against me, then try to get back in.  Maybe it works differently for different people, but I have made more money since I got a little more ruthless in that regard. 

I should qualify here that I know more about technical analysis than I do about fundamental analysis, so I am just working better with what I know now.  I am trying to balance that by reading Mastering Fundamental Analysis, etc., so that I can do more of the long term investing like David does.

I sold CPNE this morning, got a bad fill at 3.07 because Etrade took forever to cancel my first bid of 3.20 that got passed up  but hey, that is what happens when trading BB stocks, I asked them and they actually have to call the floor so it takes more time supposedly).  But I see the potential being discussed here for CPNE, so for another $10 I know I can be part of it again soon     Or for free if I buy with my Bank of America account 

We all will trade differently, but best of luck to us all, and may we continue learning from each other, that is always worth more longer term than the money lost or gained in a single day 

Intereting debate and day for CPNC. As ever .OB stocks have higher volatility than main stream stocks, therefore the risk reward is amplified. You have to KNOW what your strategy is with your position 1) If you are holding long term then you would have a stop (mental or hard) that would sit some distance below a longer term MA or ATR. If you were holding for short term gains only then you would be quicker to take profits.
David shows the perfect setup there 1) He is holding his long term position 2) He sold his short term position
If you um and err about the strategy for holding the stock then you will nearly always get a dissapointing exit to your trade.

Quote from: jmccar2 on February 22, 2007, 11:50:44 PM
I know it goes against the nature of portfolio, but would it be within the realm of acceptability to perhaps sell off and buy back in at a lower level if these drastic drops occur? Or, am I just being a Nervous Nelly who maybe should grow some  more courage or give up trading 

The problem you have though jmccar2 is that you only know you are in a drastic sell off after it has occured.

If you apply short term long term strategies to your holdings you would know when or when not to exit more clearly and with less emotion.

I am holding my CPNE longer term, I was nicely in the green before, and am still in the green. I dodn't sell because CPNE hadn't reached the type of price my entry and holding reasons are set for.

Good Trading

Thank you both very much for the personal and succinct responses . I have made my decision that I'm staying long on CPNE unless otherwise directed by this site. It is my own view that to sell a stock with this potential now, while somewhat in the red, would be a mistake. I need practice maintaining strong hands through short term dips anyways-- that's worth any (reasonable) potential loss!

This thread has a lot of emotions and "juice"

Let's take care of the emotional side first. Some of you are nervous about holding CPNE.OB, not because of the fundamentals, the chart or the news, but because you're not respecting basic money management rules and are too heavily invested in one single stock. No man can be calm and unemotional about stocks when he has a big chunk of his money at risk in one single stock. What's that thing of "I bought more", "I'm buying more", "I kept buying"? I guess you're trying to get more confident by holding more shares, but that works in the opposite way, the more you invest, the more your fears and imagination will grow.

The path to "stronger hands" also has to do with managing risk. For example, I never average down or up. I always invest a fixed portion of capital in each stock,  in the Main's case, 6.66%. To be full invested I need 15 different stocks, it doesn't matter how much I like one or another. It is a simple money management rule that has kept me out of trouble - for example, yesterday CPNE.OB went down, as you're very well aware, 16%, yet the Main went down a manageable 1.51%.

If one's capital is not enough to spread it through 15 stocks, spread it just through 5 or 10 stocks, but, my advice is for you to divide it in equal parts and invest an equal part in each stock you want to invest.

It is hard enough to know what and when to buy, you don't need the trouble of considering "how much" to buy. That should be set before the game begins and shouldn't be changed without careful and in depth strategic thought. The "buy more" reaction when the stock fails to meet expectations and turns south is a sure way to disaster.

Now the juice.

QuoteDo OTCBB stocks ever reach a "fair earnings multiple"?  Can CPNL ever reach a 36 PE without first becoming listed on NASDAQ?  I always thought that OTCBB stocks traded at a significant discount.  Would not a 10 PE be more appropriate before then?

No, my experience and study of hundreds of stocks doesn't show that discount in valuation regarding OTCBB traded stocks. They file the same SEC files as companies traded on national exchanges. In fact, I find most OTCBB stocks to be trading above what could be considered their "natural" or "average" multiples, maybe because they're usually very small companies so the growth potential is bigger.

Reviewing fundamentals:

• Market cap is $132 M.  Commerce Planet, Inc. (OTCBB:CPNE) is a publicly traded, internet-based media company. The Company offers online media products, lead generation services and direct marketing tools to its client partners. Commerce Planet offers an internet turnkey media solution through its network of wholly owned subsidiaries, which include Consumer Loyalty Group, Inc., Legacy Media Inc., OS Imaging, Inc. and Interaccurate, Inc.
• No dilution through the course of 2006 or expected going forward
• Balance sheet is strong, debt was reduced to $0
• Revenue grew from $7.34 M in 2005 to $27.4 M in 2006.
• EPS was $0.18 in 2006, which means the stock is trading at a trailing earnings multiple of 15.5. We don't know about 2007 EPS, but there's the possibility of extremely strong growth, as it happened in 2006

About that $5 M issue, we'll have to wait for the 10-Q, but CPNE doesn't need to fatten its net profit margin, it's very fat already. What the company needs now is strong revenue growth. That has been happening, according to January enrollment numbers.

When the news came out we saw that the numbers were below what I, Michael and others were expecting, so the stock sold off, instead of rallying like we hoped. This sell off has brought it to fairly attractive levels, because, with just a bit of growth CPNE.OB will easily earn $0.4 per share in 2007, and that should warrant at least a $8 price per share (the EPS number can be a lot higher).

The way I see it, there's no potential of dilution because the balance sheet is strong enough and insiders own a big chunk of the company, and with the projects and sales model these guys have on hand, the potential is huge. Sure, the stock can go down another 10 or 15%, but I'm prepared for that. I won't buy more because that can weaken my hands.

CPNE.OB can give the Main Portfolio a 200% plus return in 2007 and I won't let go of that for as long as I'm convinced it will happen. I'm not going to sell if it goes down 10 or 15% and I won't sell if it goes up 20 or 30% either.

If all of this fails - that's always a possibility - and say, Michael Hill is arrested, the company goes bankrupt and the stock is delisted overnight, the Main will lose 6.66%, that would be tough, but I'm always prepared for all possible scenarios, nothing can surprise me in the stock market. Considering and preparing for all possibilities, instead of building fear, increases confidence. I'm in control of the situation whatever happens. The market can't harm me, only I can harm myself. And I won't do it, I love myself too much LOL.

Be cool guys, level your exposure and consider using sound money management rules so that when you grow old you can say: "I was a successful investor. I beat that devil's game"

Excellent post, David. You hit it on the nail saying that the key to have a strong hand is through strict money management!

Now a minor question: when you say you apply a fixed 6.66%, is it the 6.66% of your initial investment? or 6.66% of the current equity? Looking at that you have 12 positions and only 14.97% cash available, I guess it is the later?

I have a suggestion in terms of money management: how about selling a portion of position when it becomes too large? For example, SYX is currently 11.3% of the portfolio (it reached 12% at its height), shall we sell some SYX, say, when it becomes 15% of the entire portfolio? There are 3 justifications: for one, it can decrease the portfolio volatility; for two, when a position appreciates a lot, the upside potential becomes smaller (If the target for SYX is $60+, at $15 it was a 4-bagger but when it goes to $40, it "only" has 50% more to go ...); for three, you free up capital to buy other promising stocks.

Quote from: David Randolph on February 23, 2007, 05:08:15 AM

The path to "stronger hands" also has to do with managing risk. For example, I never average down or up. I always invest a fixed portion of capital in each stock,  in the Main's case, 6.66%. To be full invested I need 15 different stocks, it doesn't matter how much I like one or another. It is a simple money management rule that has kept me out of trouble - for example, yesterday CPNE.OB went down, as you're very well aware, 16%, yet the Main went down a manageable 1.51%.