3SOF

Thanks for your requests and questions, I'll have to work throughout the weekend to address them, because during the day I don't have the necessary time. I guess 2 hours on Saturday plus 2 hours on Sunday will be enough

Sorry for this, thank you for your patience.

hi i have a request on OSK , MR and KMX

What do you think of PRS? (i posted on the 3stocksonfire but remebered this board was dedicated to 500M+)

Quote from: kpunarc on February 22, 2007, 12:18:46 AM
I'm not sure if this is the right place to post...but can anyone (specifically David) answer what makes AlphaTrade Fundamentals better or worth more than finance.yahoo.com or cnbc.com

The fundamental tables are easier and faster to use. Also, they have 12 years of data. But I guess one could use other sources, I'm just more used to it.

1. Introduction

Quote from: berloga on February 20, 2007, 01:17:15 PM
Hi David,

What are your thoughts about this mining and steel company MTL, operating in Russia. They seem to have been generating fat profits.

Thanks you.
Berloga.

Hi berloga, the sector is interesting, let's see what else we have on MTL. Thanks

2. Technical analysis
2.1. Long term chart



MTL is now bullish and approaching the new all time high set on September 2005 at $36.95.

2.2. Short term chart



The stock is up 42% over the last month or so, and it looks somewhat overbought, but that is a much less important issue than the trend, which is quite bullish.

3. Fundamental analysis
3.1. Market Cap & Business Description

The market cap is $4.69 B. Mechel is one of the leading Russian mining and metals companies. Mechel unites producers of coal, iron ore, nickel, steel, rolled products, and hardware. Mechel products are marketed domestically and internationally.

3.2. Share count evolution

The share count has remained more or less stable over the latest four quarters, as you can see on the bottom of the balance sheet table. Each ADR is worth 3 common shares of the company, par value 10 Russian rubles.

3.3. Balance sheet analysis

The current ratio is somewhat weak at 1.59, and there's long term debt of $350 M. 

3.4. Revenues

Revenues are growing a lot over the years and on the latest three reported quarters, to $1.215 B in Q3 alone. Analysts are expecting $4.18 B in revenues in 2006 and $4.49 B in 2007.

3.5. Earnings

The company already had EPS of $2.77 over the first 9 months of 2006, and analysts are expecting EPS of $3.54 for the full 2006 and $3.93 for 2007. I guess the company can beat these expectations, especially if the next four quarters go as Q3, where the company earned $1.41 per share - that would put EPS for 2007 at $5.64. This would put the forward earnings multiple at 6.

The Steel & Iron industry has an average earnings multiple of 11.21.

3.6. Recent News

• Mechel Reports Nine Months 2006 Results
PR Newswire (Tue, Nov 28)

• Mechel, Once More
at Motley Fool (Thu, Dec 7)

• Mechel Announces Decisions of The Board of Directors
PR Newswire (Mon, Dec 18)

• Mechel Reports Its Operational Results for 2006
PR Newswire (Tue, Jan 16)

• Mechel Announces A Change In Shareholder Structure
PR Newswire (Wed, Jan 17)

• Mechel Announces the Closure of the Privatization Contract for Mechel Targoviste
PR Newswire (Thu, Jan 18)

4. General Overview

It looks like the stock is undervalued, but the catalyst moving it now is the combination of the following two sentences, in my opinion:

«Through a series of private transactions. Mr. Zyuzin increased his stake in Mechel to 71.62% as of December 31, 2006.»

«I always considered the core shareholders to bear most of responsibility for the business, so I decided to personally lead Mechel on its way to becoming a global player on the coal market. I will be able to return to the question of giving over operational control when we have achieved this goal."»

These are pretty strong sentences. Just from his position in MTL, this man, Mr. Zyuzin, has a wealth of $3.36 B.

The stock also looks cheap, considering the forward earnings multiple can be something like 6, if the 3rd quarter's financial performance is just maintained throughout 2007.

5. Rating

Positive.

David, can you look into BRKR when you get a chance please.

Thanks!!

Hi david
My first post on this place 

Can you take a look at OTEX  , I think it has a chance to  reach $30 soon 

thanks

Quote from: kpunarc on February 22, 2007, 12:18:46 AM
I'm not sure if this is the right place to post...but can anyone (specifically David) answer what makes AlphaTrade Fundamentals better or worth more than finance.yahoo.com or cnbc.com

Now I'm starting to use http://moneycentral.msn.com/detail/stock_quote?Symbol=msft and it feels even better than AlphaTrade's Fundamental's, and it's free

1. Introduction

Quote from: la-onda on February 22, 2007, 12:14:40 AM
hi david,
whats up with VLO?
link:
http://www.3stocksonfire.org/trading/index.php?topic=3368.msg89500#new

cheers from SG
Oliver

I guess the recent bull run has to do with the realization that oil didn't fall of a cliff, so those long term estimates on VLO had to be raised. But since we're here let's make a brief analysis on VLO.

2. Technical analysis
2.1. Long term chart



The big move happened in 2004 and 2005. In 2006 and 07 VLO has been trading sideways.

2.2. Short term chart



The stock is again bullish, as it moved up above the $57.09 resistance level and the 200 days SMA.

3. Fundamental analysis
3.1. Market Cap & Business Description

Market cap is $35.53 B. Valero Energy Corporation is a Fortune 500 company based in San Antonio, with approximately 22,000 employees and annual revenue of more than $90 billion. The company owns and operates 18 refineries throughout the United States, Canada and the Caribbean with a combined throughput capacity of approximately 3.3 million barrels per day, making it the largest refiner in North America. Valero is also one of the nation's largest retail operators with approximately 5,500 retail and branded wholesale outlets in the United States, Canada and the Caribbean under various brand names including Valero, Diamond Shamrock, Shamrock, Ultramar, and Beacon. Please visit www.valero.com for more information.

3.2. Share count evolution

On line "Basic Weighted Average Shares" you see VLO's share count rose over the years. This means each share represents less of the company, that is, historical dilution of shareholder's value.

3.3. Balance sheet analysis

On the 3Q 2006 balance sheet we can see the current ratio is low, at 1.21.

3.4. Revenues

On the income statement annual table you can see there was very strong revenue growth over the years, but growth slowed in 2006, as the oil price declined in that year.

On the quarterly table, or "Interim" as MSN Money calls it, we can see the 4Q 2006 was the weakest of the last five quarters, but was completely discounted by the very attractive earnings multiple, so the stock rallied.

3.5. Earnings

On the bottom of this page you see the Diluted Normalized EPS and the very high EPS growth over the years. In the full year of 2006 the company delivered $8.64 EPS, which puts its trailing multiple at 6.8, which seems quite low. This valuation was discounting a big decline in the oil price, which didn't materialize. For 2007 analysts are now estimating $7.02 EPS, so the forward multiple is 8.37.

The Oil & Gas Refining & Marketing industry has an average earnings multiple of 10.3, so VLO indeed looks undervalued.

4. General Overview

VLO is trading at below average earnings multiples, but I dislike the balance sheet and the historical tendency to dilute shareholder's value. VLO trades like an oil future, up and down with oil, with an almost perfect correlation.

My take is oil won't go anywhere for years, as demand and supply are evenly balanced. I see it trading between $50 and $70. Valero can rise some 40 or 50% more from current levels, or more, but I'm not a fan of the business and it is already too big for my taste, with a market cap of more than $35 B.

5. Rating

Neutral

1. Introduction

Quote from: capricho on February 22, 2007, 09:15:01 AM
Hi David,

What are your thoughts on CHINA and TRA?

Regards,

Capricho

Hi Capricho, you know I sold CHINA (too early), because my long term estimates pointed to an average annual long term growth of about 8.8%, remember? Let me see if I can find that selling justification. Here it is: http://www.3stocksonfire.org/trading/index.php?topic=7262.msg80934#msg80934

But let's take a fresh new look at it.

2. Technical analysis
2.1. Long term chart



This chart shows some technically important levels, as the 2003 high of $14.9 and the 2004 high of $12.75.

2.2. Short term chart



CHINA's short term chart is really beautiful, with a strong bullish trend.

3. Fundamental analysis
3.1. Market Cap & Business Description

Market cap is $1.18 B. CDC Corporation provides enterprise software, mobile applications, and online games primarily in China.

3.2. Share count evolution

There wasn't significant dilution since 2000.

3.3. Balance sheet analysis

Current ratio is 1.49, so below the 2 minimum threshold that shows a healthy short term liquidity picture. Book value is $433 M.

3.4. Revenues

Over this table you can see historical revenues, which were $245 M in 2005 and are expected to come in at $307.52 M in 2006. This means YoY revenue growth of 25%.

3.5. Earnings

EPS was negative in 2004 and 05, and $0.07 for the first 9 months of 2006. Analysts are expecting another $0.07 for the December quarter, and that would put the 2006 number at $0.14 (although analysts were predicting $0.31 for the full year of 2006, this is weird).

If the 4Q number comes in at $0.07, that means $0.14 for the full year of 2006 and a trailing earnings multiple of 75.

For 2007 analysts, on average, are expecting EPS of $0.52, and that means a forward earnings multiple of 20.

4. General Overview

CHINA is a great stock and company, but already a $1.2 B market cap. The stock is trading at one of the highest trailing EPS multiples outthere for a Chinese company that doesn't file forms 10 with the SEC.

It needs to increase profitability.

I maintain that CHINA will probably grow revenues by about 25% a year for the next 10 years, but without a big jump in net profit margin the stock looks overvalued at this point. A miss on a quarterly revenue or EPS number would make it tank hard. I'll keep CHINA under the radar, because at half the price I would want to get in again, as my 8.81% average annual long term share price  increase estimate would rise to about 17%.   

5. Rating

Neutral.

Hi David, thanks for the analysis on CHINA. I suspect there's probably some intrinsic value in just having a ticker name like that which may explain the run-up and bloated valuation.

Regarding the poll that starts today I nominate TRA for consideration. I got into this stock about two months ago and have made good friends with its trend, but I'm concerned about it being overbought now.

Capricho

David, as you said you might want to add a few long positions, can you take a look at NVTL? It looks amazingly strong in this down market. Thanks!

David what do you think of a long position in CMGI in this market?

Here's a few to run through the 3SOF machine!

"OCN"
"FRE"
"CORS"
"CCRT"
"SLM"
"AOG"
"WRES"

I have a few more i'll post in the 3SOF on fire tomorrow morning...

...above are possible shorts....fyi