SFPI.PK.

[David Randolph]

Nice rally from support at SFP. We're definitely having some buy the rumor, or inside information buying before the earnings release, which will happen tomorrow before the open.

Anybody who wants to sell before the earnings release needs to sell today. I don't.

[Michael]

Hi David

Good luck with earnings tomorrow

I decided to jump ship today. The insider buying and the recent increase in the stock price indicate that we will get a positive surprise tomorrow and I would normally be inclined to hold the share over the earnings.

I am however concerned about the legal issues and the fundamentals of the company.

Thanks for this pick. Depending on the earnings I still think there are some upside left in the stock and I wouldn't be surprised if your target will be reached.

Mike

[valueseeker]

I sold as well, taking a small profit following Michael.

The chart looks great, but fundamentally I am not sure where the company stands anymore. So I am not paying to see. I may miss another run up so good luck to anyone who's holding.

[David Randolph]

Thanks for sharing your reasoning and concerns about SFP Michael 

We'll have the earnings release tomorrow at 9 AM, eastern time. Probably earnings will be good, hence the insider buying and rise in the share price of SFP.

Now it is a question of how much is factored in and how much isn't. Usually one should buy the rumor and sell the fact, but in this case that's conflicting with my previously made technical trading plan.

So, what should I follow, the rules of market wisdom, or the plan? Well, plans are important, but flexibility goes a long way too.

I really can't decide what to do at this point, I'll post a conclusion, a trading plan for tomorrow, just before the opening bell, after I get the earnings information (why should I decide now with less information than the one I will have just before the market opens?)

[Michael]

David,

It seems like we might have to wait a bit longer:

Salton delays release of quarterly results
Wed Sep 14, 2005 07:31 AM ET

CHICAGO, Sept 14 (Reuters) - Salton Inc. (SFP.N: Quote, Profile, Research) on Wednesday said it is delaying release of its fiscal fourth-quarter and full-year results. The release had been set for Sept. 14.

The company cited its recently completed private debt exchange offer.

Funny enough it seems like the market likes the delay. The Bid is at least up in the pre-market!

It doesn't have to be bad news that they postpone the release but it seems a bit strange for me that they do it one and a half hour before the CC. What did they suddently find out 

[David Randolph]

Thanks Michael 

I have this:

«Salton, Inc. (NYSE: SFP - News) announced today that it is rescheduling its previously announced September 14th conference call on its fourth quarter and year-end results. In light of its recently completed private debt exchange offer and recently announced agreement to sell the Company's 52.6% ownership interest in AMAP, including the requirement that the Company prepare pro forma financials relating to those transactions, the Company has elected to delay the filing of its Form 10-K for up to fifteen days, as permitted by SEC rules.

The Company expects to file its Form 10-K and to reschedule its conference call on fourth quarter and year-end results prior to September 30, 2005.»

I guess it still isn't time to sell the news, so buy the rumor will probably continue.

Decision is made, I will continue to hold SFP and hope my profits will grow until the $5.55 technical target.

[David Randolph]

SFP = $4.34 > TL = $3.67 => HOLD SFP

[Amarens]

Not meaning to be a pain...but $ 3,67 was what it was for yesterday. For today it should be $ 3,71  . Is hard to be working from different places, I know from experience. David, good luck on your computer problems!

Amarens

[David Randolph]

Thanks for your correction Amarens  Everything seems to be fine with my internet connection now, thank you.

The company said on a Form NT 10-Q yesterday after the close:

«The Registrant has been working diligently to prepare its consolidated financial statements and annual report on Form 10-K for the fiscal year ended July 2, 2005 and such financial statements and annual report are substantially complete. However, the Registrant completed a private debt exchange offer on August 26, 2005 and entered into a definitive agreement on August 29, 2005 to sell its 52.6% ownership interest in AMAP. Substantial resources were required in connection with these transactions, including to prepare the required pro forma financial information related to these transactions. As a result, Registrant's management needs additional time to complete and review the consolidated financial statements and annual report on 10-K for the year ended July 2, 2005. The Registrant expects to file its annual report on Form 10-K for the year ended July 2, 2005 prior to September 30, 2005.»

We already knew this. What's interesting was the FORM 4 Contrarian Equity Fund, L.P., an insider on SFP, filed yesterday:

They were buying shares on Monday, Tuesday and Wednesday. On Monday they bought 204,720 shares @ an average price of $3.9292, on Tuesday they bought 140,485 shares @$4.1243 and on Wednesday they purchased 102,215 shares at $4.2435.

These insiders are buying a lot of shares (about one third of the daily volume) at higher and higher prices !

That only means one thing: good news are coming !!! They know it, but we don't.

I don't want to be trapped by profit taking or something, so my plan is this:

1) Sell at the $5.55 technical breakout target.
2) Sell if the stock closes below the $3.33 breakout level.

[David Randolph]

They were buying shares on Monday, Tuesday and Wednesday. On Monday they bought 204,720 shares @ an average price of $3.9292, on Tuesday they bought 140,485 shares @$4.1243 and on Wednesday they purchased 102,215 shares at $4.2435.

These insiders are buying a lot of shares (about one third of the daily volume) at higher and higher prices !

What it looks like is that those insiders had stop buying. They have enough for now, and without their buying SFP naturally declined on low volume. But, they still bought for a reason, and that reason isn't known by the public yet. Probably earnings will come out above expectations and they will be released until September 30th.

So I will keep the stock and the trading plan:

1) Sell at the $5.55 technical breakout target.
2) Sell if the stock closes below the $3.33 breakout level.

[David Randolph]

SFP traded just 41,200 shares today, which is the lowest volume since the 1st of August. But after the closing bell significant news came out:

Lifetime Brands Acquires Tabletop Assets from Salton; Acquisition Adds Premium Brands and Extends Lifetime's Distribution to Fine China and Crystal

Salton Completes Sale of Tabletop Assets for $14.2 Million; Divestiture Continues Company's Strategy to Focus on Core Brands

These are relevant news for a company with just $46M in market cap. Let's see if the stock has some more volume on tomorrow's session and if the price per share runs away from the ascending trendline which stands at $3.84.

Anyway, I'll keep the previously made trading plan:

1) Sell at the $5.55 technical breakout target.
2) Sell if the stock closes below the $3.33 breakout level.

[David Randolph]

These are relevant news for a company with just $46M in market cap. Let's see if the stock has some more volume on tomorrow's session and if the price per share runs away from the ascending trendline which stands at $3.84.

It didn't, just 115,600 shares traded and a small decline on the share price. SFP is clearly waiting for the fourth quarter and year end results to be released until September 30th. I will continue waiting and holding the stock too.

[fous]

Price action looks to be closing below the ascending trend line are you selling before the close today dave?

-fousc

[fous]

SFP  broke it's ascending trendline today to close at 3.71.  Though with earnings coming out anyday now i've decided to hold this one out, I think this is just a false breakout of the trend. 1.3 million shares have been purchased by insiders since last month, must be anticipating something, this last pull back was on considerably low volume and i think earnings is gonna be a good day to hold this one.
-fousc

Updated chart:

[David Randolph]

Price action looks to be closing below the ascending trend line are you selling before the close today dave?

-fousc

My plan is clear fousc:

1) Sell at the $5.55 technical breakout target.
2) Sell if the stock closes below the $3.33 breakout level.

I know the stock broke the ascending trendline, but that was on very low volume and I previously said I was willing to give it some more room to maneuver. Risk is 14.4%, reward is 42.6%. I can't and I won't change my plan at this point, it is very hard to keep discipline, but in the end, it pays.

I agree with your analysis fousc, good luck for us