SYX

[David Randolph]

SYX released the following news yesterday:

• SearchHelp Teams with Systemax to Provide Preloaded Parental Control Software to New Computer Buyers
Business Wire (Thu 12:49pm)

I guess this comes to show that Systemax isn't just www.tigerdirect.com (as StockLemon has been writing), it is also a computer maker, check this: http://www.systemaxpc.com/

Yesterday the stock rose 4%. I have a 59% profit on SYX and I'll continue holding !

[Se7en]

Apparently SYX is now IBD's Nr1 in their new top 100 list, this can give it some extra attention next week, if already needed! 

[David Randolph]

Apparently SYX is now IBD's Nr1 in their new top 100 list, this can give it some extra attention next week, if already needed! 

Number 1? Cool

It's number 1 in the Main Portfolio too.

As I figure SYX, there's nothing to think about while the stock is trading below $30. It's too cheap (as you can read on the rest of this thread - I think it is an interesting thread, as I've been losing 15% or so in this stock). Now I have a 62% profit on SYX and I'll keep on holding!

Let's just check www.tigerdirect.com front window today ... selling non stop, 24/7, to the whole world from a single website.

[realcoolhead]

Looks like IBD is indeed influential 

David, what's the plan when SYX gets over $30? The way it is going, it may get there in no time. 

This might be the first stock I have ever held (with a strong hand) to have 100% return, thanks a lot David!

[David Randolph]

Looks like IBD is indeed influential

Indeed, it looks so, everybody pays attention to it. I probably should do that too.

Hmm, it looks like I need to be a subscriber of Investor's Business Daily to access the IBD-100 list. I want to subscribe this, but forgot my wallet in the car, and my wife took the car

I'll do it when she gets back home.

David, what's the plan when SYX gets over $30? The way it is going, it may get there in no time. 

Good question realcoolhead, I'm glad you're making it. The answer needs to take into account estimates for the future, respecting recent fundamental trends and valuation.

I need two fundamental tables for this, the historical revenue and historical EPS table:



Revenues have been growing 9% a year since 2002. I expect this growth to accelerate to 13.5% this year (according to my 2006 total revenue estimate of $2.4 B) due to the positive influence of www.tigerdirect.com.

I also expect gross margin to improve a bit, but I'm not sure by how much. What I think doesn't make sense on SYX is the very low price to sales ratio of just 0.37. I can't compare it with the industry average because SYX is involved in several industries, but in general the Price to Sales Ratio should be more like 1, given that SYX is a growing and profitable company.



The future for SYX depends more on net profit margin expansion than on revenue growth. Revenues are already quite high, at about $2.4 B for 2006. What the company needs now is to make those margins a bit more fat.

I'm expecting net profit margin of 2.05% for 2006, but there's still plenty of room to improve this. Again, www.tigerdirect.com is helping the company expand its net profit margin, but I also wonder if the company is not improving net profit margin on their computer making business (http://www.systemaxpc.com/). I wonder if they're not taking just a bit of market share from Dell, which has been losing market share as everybody knows.

Going to the basis of this investment, the main reason is www.tigerdirect.com and its historical annual revenue growth rate of 30%. As this continues, the online retailer will be the biggest part of the company, hence making it more and more profitable.

I see $30 as a sure thing, and I still consider the stock undervalued. If SYX can be on the Main beyond $30 depends on the net profit margin achievements the company can make on a quarter by quarter basis, because I don't want to see tigerdirect.com profits eroded by other divisions within the company.

I'll keep holding SYX as a long term investment and will review this position everyday with incoming information.

This might be the first stock I have ever held (with a strong hand) to have 100% return, thanks a lot David!

You're welcome realcoolhead, keep that head cool and those hands strong

[JKN]

Applause !!!

Just passed 100% up on SYX...in at 12.85.

Great Call David and many Thanks !!

[David Randolph]

Applause !!!

Just passed 100% up on SYX...in at 12.85.

Great Call David and many Thanks !!

You're welcome JKN, just doing my job. I wouldn't think too much of my buying point when holding stocks, that shouldn't be an input on a hold/sell decision process. The market doesn't care about your buying price, and to maintain objectivity, you shouldn't care about it too.

SYX is up 8 days in a row, and the trend, that good old friend of ours, is without a doubt bullish.

Fundamentally I still see it as cheap, and probably I wouldn't sell even if it were expensive, given that fundamental trends persist. The next 50% advance of SYX shares will mean another double for JKN.

I'll keep holding SYX.

[David Randolph]

SYX is up 9 days in a row, as institutions pile in shares. Of course, it won't continue rising at this torrid pace, there will be corrections along the way, but the technical trend is bullish and fundamental trends are very positive as you can read on the rest of this thread.

I've been doing well just holding this great stock. I'll keep letting the profits run.

[David Randolph]

SYX couldn't make 10 advancing days in a row, but I think we can excuse the stock

There were no news out ... let me check www.tigerdirect.com. Selling aggressively , as always.

SYX is now 11.2% of the Main Portfolio (due to its own merit), and I'll keep on holding the stock.

[Amarens]

David,

Hope you have time to reply one more time. I'm going skiing tomorrow and won't have internet acces for a week. I want to put a stop at SYX, would be a bummer if something like ZQK happens. I find the stoplevel hard to determine (still learning). Was thinking at $ 23,20 b/c that is just below like what looks like a small gap to me. 

Would be very happy to hear your thoughts 

Thanks,
Amarens

[Se7en]

Sold my SYX for a 43% gain, need to have some funds to get in PFSW!
Great pick David, applaud!

[David Randolph]

Now that you put your photo of course I'll answer your question right away Amarens (just kidding, I hope my wife doesn't see this post )

That's such a hard question, you know?

Generally I'm not a fan of trailing stops or even stops in general. But I understand your need to go on vacations with a relaxed mind. That gap you mention closes at $23.26.

I don't think the stock will go that low next week, in fact I think there's more chance of it going beyond $30.

I would go without a stop, but if you want put your stop at $22.9, I'm pretty sure the stock won't touch it next week.

I wish you nice holidays

[Amarens]

Tnx!!! Also for the compliment

Tried forever to upload one never worked, know now they were to big. Think it's fun to see the faces of everybody.

My mind will be more relaxed with a stop. Will follow your advice. Is pretty close to my idea anyway.

Will be back in a week.
Amarens

[trexkerry]

Hey David, I decided it was time for a new monitor so I went searching the web for a great deal.  Guess what?  I found my deal at tigerdirect.com!  I wound up buying a wireless keyboard and mouse to go with it.  And trust me, I did not go to tigerdirect first, I searched some of the pricing engines and they wound up taking me to tigerdirect.  Count another $400 in revenue for SYX this quarter!    

Here is my new monitor if anyone is looking for something new too, what I really like is the video that tigerdirect uploaded to showcase the product.  Scroll down near the middle of the page on this link to see the video, great marketing by the company!
http://www.tigerdirect.com/applications/SearchTools/item-details.asp?EdpNo=2549197&CatId=1410&CMP=ILC-FPM02

[trexkerry]

Forgot to mention that the sale on this monitor ends Monday if anyone really wanted one...