3SOF

CIMT is getting a little weak.  I am not going to let CIMT pull a MSI-type retrace on me.  Long term holding is great in theory when you are already in positive territory, but I think one needs to manage your money as well by not letting nice gains turn into huge losses.  Once the holding turns negative, there's no guarentee you'll ever recoup it.  A 2.92 or less top bid will be my out.  I hope CIMT does not get there, though.

Quote from: buddjas1 on March 30, 2007, 01:37:05 PM
CIMT is getting a little weak.  I am not going to let CIMT pull a MSI-type retrace on me.  Long term holding is great in theory when you are already in positive territory, but I think one needs to manage your money as well by not letting nice gains turn into huge losses.  Once the holding turns negative, there's no guarentee you'll ever recoup it.  A 2.92 or less top bid will be my out.  I hope CIMT does not get there, though.

That's also my hope buddjas1, as I would feel sad to see you leave CIMT.

To know more about CIMT's flagship product, Cimatron E, you can read this product review:

Software: Cimatron E 7.0

I highlight the following parts:

«It's been nearly two years since I last looked at Cimatron's offering and it's clear that there's been a great deal of work done on improving the core functionality within the system (in terms of modelling and editing power), but perhaps more importantly, there's been a lot of improvement on the process-specific areas. If you're in the mould and die design industry, then the system offers a feature rich mix of functionality. The intelligent process-based tools remove a great deal of the repetitive work undertaken in every project, but alongside this, the core modelling tools allow you to dive in and create the complex geometry that offers the really challenging part of many tooling projects, ensuring that your design team is using its skills where most appropriate.»

And the price:



£4,500 is about $8,700 for each pack of software It had to be, because it is so specific.

When I think of this very high price for a product that, after being developed, probably costs about $1 to make an additional copy, I wonder why the company isn't more profitable. Well, indeed, gross margin in Q4 2006 was 85%. But SG&A (Selling, General and Administrative) costs were 60.6% of sales, that's why it isn't more profitable. The good news is SG&A costs in Q4 2005 were 77.5% of sales, so there was a meaningful improvement towards profitability, in fact, SG&A costs were lower now ($3.65 M) than a year ago ($4.2 M), even though sales were 11.1% higher.

Also, R&D costs were $1.09 M in Q4 2006, stable from previous levels. My take is this company will be profitable when it wants to be profitable. It just needs to cut some costs, and it is doing so. Management said the following:

«Mr. Rimon Ben-Shaoul, Chairman of the Board of Directors of Cimatron Said, "after several years of re-organization, cost cutting and extensive product development, we believe the Company is now on the right track for sustained growth and profitability, and that Cimatron's current competitive advantages enable us to reinforce our worldwide market positioning, both in emerging and traditional markets."»

And they didn't said it previously. Throughout 2005 and 2006 there wasn't one single press release out from this company. Not even one, just the necessary SEC filings. In 2007, just three months into the year, we already had 8 positive press releases. Management feels it's time to show us the money, the numbers, that will make the stock fly.

It is our job to buy and hold CIMT.

Some grumpy guy's thoughts:

http://software.seekingalpha.com/article/31198

Quote from: buddjas1 on March 31, 2007, 03:03:24 PM
Some grumpy guy's thoughts:

http://software.seekingalpha.com/article/31198

He may be grumpy, but he does seem to be basically positive on CIMT 
---------------------
Cimatron Technologies (CIMT) has gained 132% since the beginning of the month. Its current price, $3.20, represents a new high since the low it reached in 2002. The stock had actually been holding steady at $1.40 recently, and then it suddenly soared at the end of the first week of March. Cimatron, which specializes in industrial instrumentation, is one of the oldest Israeli companies on the stock exchanges in New York. The company develops and produces software for the manufacturing of devices used in the metalwork industries, from dies to numerical control software for machines.

Since I last wrote about this company, the stock has continued to rise strongly. What caused this surge? The reason apparently does not lie in the company's fantastic performance or anything like that. 2006 and its final quarter were "responsible" for the stock's initial climb at the end of the first week of the month, but after the initial excitement following the company's move from losses to an operating profit (it is still losing), it fell again to $2.60 from $3 at the beginning of the week. It then suddenly soared 27% to $3.30 following the announcement of the opening of two new offices in China.

At the beginning of the month Cimatron announced that it would be launching the new version of its CimatronE software for tool manufacturing, Version 8. From what I have read, this really is an advanced version which has won the company much praise on Main Street. Todd DeMint, lead designer at toolmaker Eimo Americas in Michigan said that "Version 8 gives us new tools in design and manufacturing," while industry analyst Alan Christman of CIMdata said that the release of the new software would change Cimatron's situation, for the better obviously.

The truth is that anyone who read the company's fourth quarter and 2006 reports would have seen that China is indeed the company's center of activity, and from what the company president said, it is obvious that the entry into China in order to grow together with the market there was a strategic decision. China, as it happens, has become the world leader in industrial tool design and production, and Cimatron's idea to operate there is perfectly logical.

Cimatron is a fairly small company by any criteria, and it has to exploit its technological edge (if indeed it has one) and rely on it in order to continue growing. The company's performance and the behavior of its stock since 1996 have not been exceptional to date, but perhaps everything is now beginning to happen. It's definitely worth checking out.

Thanks for the article buddjas1 and Tokyopua

There are four basic things I like on CIMT:

1) The market cap is very low, at $24.3 M;
2) There's no dilution at all over the years;
3) It is a software company. This means it has the potential to show extremely fat gross and net profit margins, if sales rise just a bit more;
4) It is benefiting from China's strong economic growth, since sales to that country were up 80% in 2006 alone.

Also, the company spent a lot of money in R&D over the past 6 years, it doesn't need to spend so much going forward (in fact, R&D costs are going down already). The company started issuing press releases in January 2007 (none previously), it is looking to reap the reward of 6 years of efforts. Do you think the good news will stop here? No way.

My take is CIMT has the potential to end 2007 above $10 a share and I'll keep holding for as long as I believe the way ahead is up.

Quote from: David Randolph on April 02, 2007, 06:07:55 PM


My take is CIMT has the potential to end 2007 above $10 a share and I'll keep holding for as long as I believe the way ahead is up.

So numerically am I right in stating that currently this would be the pick in the Main portfolio that has the greatest potential currently for this year in your opinion? 

Quote from: tokyopua on April 02, 2007, 06:42:13 PM

Quote from: David Randolph on April 02, 2007, 06:07:55 PM

My take is CIMT has the potential to end 2007 above $10 a share and I'll keep holding for as long as I believe the way ahead is up.

So numerically am I right in stating that currently this would be the pick in the Main portfolio that has the greatest potential currently for this year in your opinion? 

Absolutely, CIMT is the stock with the greatest short term potential. It is also the smallest company in the Main Portfolio, hence its ability to move a lot and fast. But, of course, risk is also higher because so far we have just one strong quarter, the jury is still out to say if this is a new positive fundamental trend or just a blip (I believe there's strong indication in favor of the first hypothesis).

Hi David

this stock showed some strenght yestreday . technically this stock should make another new high very soon 

I feel like there will be another 100% jump soon 

They have a cool software

Hey Garoh, are you with the company CIMT?  Every time you say you feel its gonna pop up you are correct!   I LIKE IT! Keep up the good work!! 

DAVID, I like the new layout on your site, keep up the excellent work! 

Good Luck everyone!

Mbaugh

No kidding, Garoh.  Now just say something nice about MSI!!!

Quote from: mbaugh on April 03, 2007, 10:02:34 AM
Hey Garoh, are you with the company CIMT?  Every time you say you feel its gonna pop up you are correct!   I LIKE IT! Keep up the good work!! 

DAVID, I like the new layout on your site, keep up the excellent work! 

Good Luck everyone!

Mbaugh

Hi mbaugh

maybe ask David 

just hold cimt tight .... are we ready for the second wave soon ?? 

wish you best of luck

Quote from: buddjas1 on April 03, 2007, 10:27:12 AM
No kidding, Garoh.  Now just say something nice about MSI!!!

heheheh buddjas1 unfortuntely I don't like their bussiness 

I think they had enough ! will try to say something later 

hehe, Garoh's hand is red hot

Thanks for the congrats on the new layout mbaugh, I'll make sure that Ramsburg reads this, he'll be happy

Did I write that CIMT was the most powerful holding of the Main Portfolio? I guess so ... well, now it is the biggest gainer of the Main, and also a great holding of the 3 Stocks on Fire Portfolio, helping to push it up 13.24% today

The chart below is awesome, especially when considering volume, this micro cap has wings ... well, I don't want to be overly enthusiastic here, after all, today was just business as usual.

As of today's close CIMT is a $32.7 M market cap software company. It is trading at 1.52 times revenues. The Technical & System Software industry trades at 2.66 times sales. For CIMT to trade at the industry's average, it would have to be a $7.16 stock.

But my interest in this pick isn't a correction of the undervaluation to the industry average valuation, but the strong growth and net profit margin expansion possibility. I see leverage in both ways here: the stock is coming up from a very depressed valuation level, and it can go to the other side of the spectrum, to be valued like a strong growth + high margin software company.

There's nothing else to do here but to sit tight and let the profits run.

the 3 stocks on fire portfolio is getting hot.

David, Keep up the good work.

I am so glad I found this site!!!  CIMT is on fire!!!