TZOO - Sector: Services---Industry: Internet Information Providers

[Ares]

TZOO is on this websites list.
http://buyonpanic.com/
elzoo Inc. (NASDAQ TZOO)

Last Trade: 28.16
Trade Time: 4:00PM ET
Change:  8.72 (23.64%)

Travelzoo (NASDAQ TZOO) reported disappointing results on Wednesday.  TZOO earned $4.1 million (25 cents a share) on revenue of $19.7 million.  Analyst forecasts called for earnings of 32 cents a share on revenue of $20.4 million. In the year-earlier quarter, TZOO earned $4.1 million, or 24 cents a share, on revenue of $16.9 million.

TZOO hit a 52 week low on June 13 2006 when it closed at $25.70


Posted at 03:05 PM | Permalink | TrackBack (0)
April 24, 2007
Amarin Corp. plc (NASDAQ AMRN)


Last Trade: 0.83
Trade Time: 3:59PM ET
Change:  2.95 (78.04%)

AMARIN (NASDAQ AMRN) announced "that two Phase III clinical trials of Miraxion as a treatment for Huntington's disease showed no statistically significant difference in either study between Miraxion and placebo with regard to the primary and secondary endpoints."

Posted at 02:28 PM | Permalink | TrackBack (0)
April 23, 2007
Applied Micro Circuits Corp. (NASDAQ AMCC)


Last Trade: 2.73
Trade Time: 4:00PM ET
Change:  0.80 (22.66%)

AMCC announced it would post fourth-quarter revenue of about $70 million. Analysts polled by Thomson Financial had forecast revenue of $73.9 million.

Posted at 03:06 PM | Permalink | TrackBack (0)

April 20, 2007
Capitol Bancorp Ltd. (NYSE CBC)


Last Trade: 30.35
Trade Time: 4:03PM ET
Change:  6.40 (17.41%)

Capitol Bancorp Ltd.(NYSE CBC), announced its first-quarter profit fell 37 percent primarily due to weak mortgage markets in Michigan.

Posted at 02:11 PM | Permalink | TrackBack (0)
Mentor Corp. (NYSE MNT)


Last Trade: 40.00
Trade Time: 4:02PM ET
Change:  8.25 (17.10%)

Mentor (NYSE MNT) fell 17% percent a day after the breast implant maker posted disappointing results and cut its sales outlook.

Posted at 02:09 PM | Permalink | TrackBack (0)

April 19, 2007
Avici Systems Inc. (NASDAQ AVCI)


Last Trade: 9.65
Trade Time: 4:00PM ET
Change:  3.89 (28.73%)


AVCI announced on Thursday that it would halt its core router development and focus on a new product initiative. The company said it would turn its focus to its new Soapstone Networks product and ship it remaining router products by the end of the year.

Posted at 01:54 PM | Permalink | TrackBack (0)
Smith Micro Software Inc. (NASDAQ SMSI)


Last Trade: 16.36
Trade Time: 4:00PM ET
Change:  3.37 (17.08%)

Jefferies & Co. downgraded SMSI on Thurdays citing that inventory transition and fewer new music devices at Verizon Communications Inc.  could limit Smith Micro's near term revenue growth.

The brokerage lowered its rating on the stock of the wireless communication software products developer to "hold" from "buy" and reduced its price target to $21 from $24.

Posted at 01:51 PM | Permalink | TrackBack (0)

April 18, 2007
Evergreen Solar Inc. (NASDAQ ESLR)


Last Trade: 10.64
Trade Time: 4:00PM ET
Change:  1.26 (10.59%)

ESLR reported better-than-expected first-quarter results, but warned it would post a wider second-quarter loss.  ESLR is predicting a second-quarter loss of $8 million to $8.3 million, or 10 cents a share.

Posted at 02:45 PM | Permalink | TrackBack (0)
ESLR closed Wednesday @ 10.64.....within 1 cent of it's 20 day moving average of 10.65

ESLR's 50 day moving average is currently 9.92

Posted at 02:42 PM | Permalink | TrackBack (0)

April 17, 2007
Netlist Inc. (NASDAQ NLST)


Last Trade: 4.29
Trade Time: 3:59PM ET
Change:  1.68 (28.14%)

Shares of Netlist Inc. plummeted after the opening bell Tuesday after the company said customers are delaying orders for memory systems and prices for those systems are falling.

Posted at 02:37 PM | Permalink | TrackBack (0)
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[das317]

Is this a good thing?
Travelzoo Announces Share Repurchase Program
Thursday April 26, 2:39 pm ET

NEW YORK--(BUSINESS WIRE)--Travelzoo (NASDAQ:TZOO - News), a global Internet media company, today announced that its board of directors has authorized the repurchase of up to 1 million of the company's outstanding common shares.

Purchases may be made, from time to time, in the open market and will be funded from available cash. The number of shares to be purchased and the timing of purchases will be based on the level of Travelzoo's cash balances, general business and market conditions, and other factors, including alternative investment opportunities.

[mbaugh]

yes, this means that the company believes that the shares are currently undervalued.  It also reduces the float and increases the EPS.  This is a signal that TZOO believes that the share price will be much higher in the future.

[DragonAMG]

TZOO appears to be a very strong buy at these levels and especially now that the company has announced a buy back of 1 mil. shares.  This will reduce the float to 1.9 mil. shares. 

I bought some yesterday and added to my position today. 

[soxguy]

So maybe we won't have to ride it down too far, or maybe we've seen the bottom. I bought some more yesterday. If we're still shooting for those great numbers down the road,how can one not buy here. GLTA.

[DragonAMG]

So maybe we won't have to ride it down too far, or maybe we've seen the bottom. I bought some more yesterday. If we're still shooting for those great numbers down the road,how can one not buy here. GLTA.

I agree... I don't see it going down much more if at all.   

[yukiii]

Be patient and buy more around $25.00 as company will continue to gobble-up more shares as price descends.

Obviously this transaction makes future earnings per/share easier to obtain.

Only reason TZOO made more per/share this quarter verses a year ago same quarter was because of less shares outstanding.

[David Randolph]

I agree with you guys, great news for TZOO yesterday:

• Travelzoo Announces Share Repurchase Program
Business Wire (Thu 2:39pm)

This is one of the reasons I like TZOO, management has this good habit of buying back the company's own shares. You can see that on my valuation model I already had 0.98 as the dilution factor, which means I expect the share count to be reduced by 2% a year, on average. This is quite rare on a less than $1 B market cap company.

Currently the # of shares outstanding on a fully diluted basis is 16,480,000, down from 17,298,000 from a year ago, or -4.73%. With the company buying back 1,000,000 more shares the share count will be reduced further by, say, 800,000 (because probably there will be some stock options as employee compensation, I'll have to check that later) to 15,680,000, a 4.85% reduction. We don't know how long will this take to happen, but I guess my 0.98 dilution factor remains appropriate (say it will take them two years to buy the 1,000,000 shares).

Now, at current prices 1,000,000 shares will cost $28,140,000, and the company's cash balance is $39.9 M. This is why I expect them to buy shares as they generate more cash, and not to do it over the short term.

Anyway, as yukiii and mbaugh say, this will make it easier for the company to increase EPS, since EPS is Net Income/# of shares outstanding.

It looks like TZOO's management doesn't think the market reaction to Q1 numbers was appropriate. I agree with management, since the weak quarter was mostly due to strong investments in the future growth of the business.

My valuation model says the stock is more attractive now than in the past, since the share price decline and long term fundamentals remained steady:



(results declined a bit because I changed the initial share count to the diluted instead of the basic number of number of shares outstanding and the industry's average earnings multiple declined 1 point)

I'll keep holding TZOO.

[yukiii]

Until Travelzoo can demonstrate profitable growth in Europe or accelerated growth in the
U.S., I find it difficult to assign a premium multiple to its earnings. Near-term concerns about challenges to revenue and
earnings growth given increased competition (Priceline's Pricebreakers), which may cause share price volatility.
I think that the company will be challenged to grow earnings at greater than
a 20% rate, given the moderating growth in its core U.S. business.
Slower growth due to future competition into outbound email travel marketing by large Internet portals, increasing subscriber acquisition
costs, and international expansion issues.
Value $25-$29

[soxguy]

The Five Dumbest Things on Wall Street This Week
Page 3 


3. Zoo Story

   
Bulls stampeded out of Travelzoo (TZOO - Cramer's Take - Stockpickr - Rating) this week.
The online publisher of cut-rate travel deals saw its shares plunge 23% Wednesday after flat first-quarter earnings. New York-based Travelzoo blamed rising marketing spending for the shortfall.

"In Q1, we decided to invest a record $6.7 million in subscriber acquisition and in marketing the Travelzoo brand," CEO Ralph Bartel said in a Tuesday afternoon press release. "We added four senior executives in North America, Europe and Asia. We believe that this positions Travelzoo well to capture the growth opportunities we see ahead for the future."

Just how well is Travelzoo positioned? Hard to say. One of two analysts who endured the subsequent conference call wondered about the competition that presumably prompted the big rise in marketing spending. The analyst asked Travelzoo execs to explain what "your strategy is to combat it and to what extent it may have changed the growth going forward in the industry."

Executive vice president Holger Bartel, Ralph's brother, brushed off the question as a weary traveler might a flight attendant's offer of lukewarm coffee.

"I am not sure I really understand your question," he replied, according to the SeekingAlpha.com transcript. "There have always been competitors in the market who are trying to imitate what we do. We have seen that now for years."

The notion that Expedia (EXPE - Cramer's Take - Stockpickr - Rating) and Priceline (PCLN - Cramer's Take - Stockpickr - Rating) have been trying to "imitate" Travelzoo seems like a stretch. Expedia, for instance, posted 2006 revenue of $2.24 billion, compared with Travelzoo's $70 million. But Holger Bartel isn't persuaded.

"We hear from our advertisers that they are not providing them results," he continues of Travelzoo's rivals, "the results that we are providing our advertising clients."

Travelzoo investors know all about not getting results.

Dumb-o-Meter score: 85. "Now, you wonder what determines by what percentage we increase the rates," Bartel lectures at one point. "If we see a lot of demand in certain areas, for example hotels or cruises, we are more inclined to increase rates."


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A not very flattering view of MR. Bartel.

[DragonAMG]

"I am not sure I really understand your question," he replied, according to the SeekingAlpha.com transcript. "There have always been competitors in the market who are trying to imitate what we do. We have seen that now for years."

The notion that Expedia (EXPE - Cramer's Take - Stockpickr - Rating) and Priceline (PCLN - Cramer's Take - Stockpickr - Rating) have been trying to "imitate" Travelzoo seems like a stretch. Expedia, for instance, posted 2006 revenue of $2.24 billion, compared with Travelzoo's $70 million. But Holger Bartel isn't persuaded.

Expedia and Priceline are not their competitors, they are their customers.  So the only one that looks stupid there is the writers for implying that and simply not knowing what the hell he is writing about.

[David Randolph]

"I am not sure I really understand your question," he replied, according to the SeekingAlpha.com transcript. "There have always been competitors in the market who are trying to imitate what we do. We have seen that now for years."

The notion that Expedia (EXPE - Cramer's Take - Stockpickr - Rating) and Priceline (PCLN - Cramer's Take - Stockpickr - Rating) have been trying to "imitate" Travelzoo seems like a stretch. Expedia, for instance, posted 2006 revenue of $2.24 billion, compared with Travelzoo's $70 million. But Holger Bartel isn't persuaded.

Expedia and Priceline are not their competitors, they are their customers.  So the only one that looks stupid there is the writers for implying that and simply not knowing what the hell he is writing about.

I agree with you dragonamg. Moreover it is easy to say "you're dumb because you bought stock X, Y, Z and it went down" after the fact. Anybody can do that, I bet my 4 year old kid could do it

As for TZOO, yes, it can be down some more, but it is getting to cheap territory in my view. Even though analysts took estimates down due to the weak Q1 results, they're still at $1.16 EPS expected for 2007, and that means the EPS multiple is 23.7, and the Internet Information Providers industry average is 34.3.

The company is having a short term setback due to its investments in Europe and Asia, but over the longer term these investments will probably increase the company's overall profitability. I'll keep holding TZOO.

[cumulina]

I'm a bit confused regarding the information I can find on TZOO's shares shorted.

Shortsqueeze has the number at 68.40% of float. 

E*TRADE shows it to be 275.55% of float! 

Can anyone provide some more realistic numbers?

Thank you.

[David Randolph]

Hi cumulina, my fundamental data service says there were 2,011,012 shares sold short in April 10, 2007. The short interest ratio (the number of days it would take shorts to cover given the average daily volume) is 7.3 days. In terms of % of the free float, the free float is 7,525,550 shares, so we're talking about 26% of the free float sold short.

I see this information is quite different from yours. E*Trade's numbers aren't possible (unless there's naked short selling going on). And that shortssqueeze number also seems way too high, but possibly it is a more recent count than may own which is dated April 10.

Anyway, I don't think the number of shares held short has a material impact on the long term price of the stock, since it has nothing to do with the fundamentals. That would be a way of trying to know what others think, so I could follow or go against, but I prefer to have my own ideas.

TZOO had a bit of a bounce yesterday, the first positive sign after that horrible gap down after the earnings release. Analysts are expecting about 15% revenue CAGR going forward, and I'm expecting 30%. Perhaps I'm too optimistic in my views on TZOO. Let's break it down in geographical terms, just to see if my faith in Europe alone may do the trick:

- North America revenue grew 13% in Q1 2007 when compared to Q1 2006, to $18.5 M;
- Europe revenue grew 128% to $1.3 M.

Let's multiply this by 4 quarters and expect North American to keep growing 13% a year and Europe to grow 100% a year. Here are the results:



Ok, if North America grows 13% and Europe grows 100% (because it is coming up from a very small base), revenue CAGR will be 23.3%. I guess these are reasonable expectations, so let me change the revenue CAGR on my valuation model, I hope there isn't a dramatic impact:



There was some impact, but fortunately not dramatic enough to make TZOO unattractive. But there's another issue here, which is the positive impact on net profit margin from Europe hopefully becoming a profitable business unit. If revenue in Europe were $42 M I bet the unit would boast a fat net profit margin. We'll study the expected net profit margin for TZOO over the next update.

I'll continue holding TZOO.

[yukiii]

Going lower, Be patient and buy more around $25.00 as company will continue to gobble-up more shares as price descends.