3SOF

NVEC had great earnings a couple of weeks ago and has been consolitating ever since.  Has 43% operating margins   and no debt.

David: "I've taken a more in depth look at MCZ, and besides wishing I had never sold it, I saw that Q1 2007 wasn't reported yet, and that is the weakest quarter from a seasonal standpoint. The news flow has been very positive and the technical picture is quite bullish as you can see on the chart below, but the company made just $0.05 EPS over the last 9 months, and it always loses money in Q1 ... say it will lose $0.02 per share, fiscal 2007 EPS will be $0.03 and the stock would then be trading with a trailing EPS of $0.99/$0.03 = 33, which is above the industry average of 21."



Not true Chief, MCZ only reported a loss in 4th quarter in 2006 (Q4 2005);

Q405: Loss 0.06
Q404: Gain 0.02
Q403: Gain 0.01

From Q405 report: "During the fourth quarter Mad Catz also recorded significantly higher year-over-year operating expenses fueled by higher sales and marketing expense related to substantial increases in co- op advertising. Operating expenses also reflect the launch and promotion of Real World Golf and one-time costs related to the Company's staffing reduction. General and administrative expenses also reflect one-time costs and increased legal and professional fees related to litigation and SOX compliance."

This cud partially explain the loss, along with transition to Xbox 360.

Anyway, if we have a positive surprise this quarter, MCZ cud see a very nice pop.

Quote from: David Randolph on May 21, 2007, 06:56:27 AM

Quote from: David Randolph on May 18, 2007, 01:06:20 PM

QuoteDavid,

MCZ, the bullishness just started. I would love to buy it if you going to call it today. 

Nah, not today Terliso, I never take intraday decisions or make intraday recommendations. Moreover I need to cover the stock in light of new valuation model. Maybe Monday, but I'm not sure, just after performing the analysis.

Going for the beach with the kids now, see you later

I've taken a more in depth look at MCZ, and besides wishing I had never sold it, I saw that Q1 2007 wasn't reported yet, and that is the weakest quarter from a seasonal standpoint. The news flow has been very positive and the technical picture is quite bullish as you can see on the chart below, but the company made just $0.05 EPS over the last 9 months, and it always loses money in Q1 ... say it will lose $0.02 per share, fiscal 2007 EPS will be $0.03 and the stock would then be trading with a trailing EPS of $0.99/$0.03 = 33, which is above the industry average of 21.

So, my idea is to wait some more time and possibly buy when the company reports the full year fiscal 2007 numbers, which will probably be seen as a disappointment by investors. We shall see, congrats if you've been holding MCZ

Oopps, there we go.

Hi David and all,
I stumbled upon another stock which i feel presents an interesting opportunity - Primedia Inc (PRM)


Here's my analysis, on why i think so:

What they do:
PRIMEDIA, Inc., through its subsidiaries, operates as a media company in the United States. The company oConsumer Guides Segment (includes Apartment Guide , New Home Guide , Auto Guide , Rentclicks , AmericanHomeGuides.com , Single Unit Real Estate Rentals, and the DistribuTech distribution business)


They today announced selling the magazine business (Enthusiastic Media) for 1.2bn

Why i feel this is attractive:

1. The big negative this co. had was the huge debt of 1.32bn & related huge interest expense.
2. The remaining consumer guide business showed good growth over the past quarter

Q107: 80m rev
Q106: 81m rev

Operating Inc Q107: 7.0m
Operating Inc Q106: 5.4m

However, this segment lost 20m due to 29m int. expense.

With the debt reduction, i feel this would be profitable (this is my assumption).

The FY06 report tells the same story:
Revenues for the Consumer Guides segment were $324,521, up 2.3%, and Segment EBITDA was $81,274, up 8.5% compared to 2005.

Total EBITDA was 152m

Depriciation & amortization was 42m (Of this, 28m was depreciation. I need to see what the amortization of 10m was for, and will it continue). I also assume that with the sale, some property (and / or fixed assets) will be divested, which will result in lower depreciation too..

Anyway, as a result of dep/amor, Operating Income for FY06 was 107m

If you strip out the income from the magazine business, that leaves 10m of Operating

Income. This pretty much would be the Net Income, as i dont see recurring Other income (loss) which was due to loss on loans. Im assuming Interest expense will be ZERO, as the company would have cash remaining.


There's ofcourse room for upward surprise due to lower depreciation / amortization.


Bottom line, there is arbitrage opportunity in what the market is valuing this company due to the huge debt level and the potential the consumer report business has.

Thoughts / feedback welcome. Thanks,
Nick

PRM looks really bullish Nicknite, thanks for the heads up.

"PRM looks really bullish Nicknite, thanks for the heads up."

Thanks Terliso, i need to understand the numbers a bit better..but i like what i see so far..

Hi David,

When you have the chance, can you see those ones: ACRI, ICOC, EGMI.OB and KDKN.OM?
Thanks!

Hi David, when you get the chance check out ABIX, a low market cap hurricane play. 

Hi David
Please just check URZ (Uranerz) an Uranium play
Thank You

QuoteHi David,
I would be interested in taking a look at your metastock screen.

Hi ravenquork, it's here on this post:

How to find Stocks on Fire

The next three requests for analysis I have on this thread are ILC, TSEM and ICOC (correct me if I'm wrong). I'll write some comments on these three stocks tomorrow morning and move on to the next three over the following day.

David,
I'd posted a short analysis on PRM..could you take a look at that for me please?
Thanks,
Nick

Quote from: nicknite20 on May 23, 2007, 12:24:48 PM
David,
I'd posted a short analysis on PRM..could you take a look at that for me please?
Thanks,
Nick

I will Nick, I just need to follow the order of the requests, in terms of the date that they were made. But I'll get to PRM, hope not too late.

PZZ has been promising a "company transforming" acquisition and
today they delivered. On Wednesday morning, Prospect Medical Holdings,
Inc. (amex: PZZ) announced a definitive agreement to acquire ProMed
Health Care for $41 million in cash and $7 million in PZZ stock. The
Boards of both companies have approved the transaction and the deal is
expected to close on June 1, 2007.

ProMed Health Care is comprised of two Independent Physician
Associations (IPAs), Pomona Valley Medical Group and Upland Medical
Group, as well as, ProMed Health Care Administrators, the management
services organization (MSO) that serves these IPAs. For fiscal year
ended September 30, 2006, ProMed generated revenues of approximately $90
million and operating income of approximately $9.0 million. The
acquisition is expected to be immediately accretive to PZZ's earnings.

This acquisition is the largest in PZZ's history and creates an
organization with approximately 250,000 "covered lives" making the
combined companies the sixth-largest IPA in California. ProMed's high
concentration of Senior members is also a big deal for PZZ and increases
their total number of "Senior lives" under to almost 24,000.

As a part of the deal, PZZ has received $53 million in financing
commitments from a national lender comprised of a $48.0 million term
loan and a $5.0 million revolving credit facility. The term loan will be
used to fund the cash portion of the ProMed acquisition price and repay
the remaining balance outstanding on the company's existing credit
facility with GMAC Health Capital.

Great news for investors and it couldn't have come at a more opportune
time. PZZ's stock recently bounced off a $3.95 52-week low. This bounce
and today's announcement helped reverse a near $2.00 wash-out following
a couple of disappointing quarters. The "weak hands" may be gone and the
company is set to continue growing earnings despite some heavy
"re-investing" planned for this year. The integrated acquisition could
generate as much as $0.75 per diluted share in earnings over the next
twelve months, and at the current price, PZZ is trading at a mere
6-times diluted EPS. How cheap is that?

PZZ will now be reporting well over $200 million in annual revenue and
this transaction should help bring a lot more exposure to the company.
PZZ is cheap, at a bottom and should accelerate higher from here.

Hi David,

when you have few minutes, can you give a look inside IOM (Iomega Corp)?

Thanks, have a nice day.

A.