BFLY

[rickjust]

yes ,
the huge kangaroo tail to 160 is not promising , this may drift lower as it has all day.
max

[David Randolph]

yes ,
the huge kangaroo tail to 160 is not promising , this may drift lower as it has all day.
max

RAD yesterday did the same kind of candle, and it is up 3.4% today. When I bought BFLY, I have to be honest, I thought "at least I'll get 20 or 30% here". It gave me that today, but I didn't take it, since I don't make day trades.

Perhaps this way is even better, I'll have more time to study the stock. I appreciate the business model a lot, and with the news out lately the expectation of a 4th quarter profit will keep the share price well supported.

Perhaps it will be a $2 stock in a couple of weeks.

[David Randolph]

Yes, I had time to study BFLY a bit more. On my initial analysis I didn't specify why I like online retailers so much (SYX is another example).

I like them because their costs are lower, they don't need many stores and as many employees as a traditional retailer, a large warehouse and the website will do the business. Also, their potential market is much, much bigger. For example, www.bluefly.com sells its products to the whole world. A brick and mortar retailer, doesn't matter how big he is, will only have a market size of the size of the community around.

BFLY's losses increased in the 3rd quarter and management's explanation was:

«Operating loss increased to $3.6 million from $1.5 million primarily as a result of a $597,000 of expense reported in connection with employee stock options as a result of the adoption of SFAS123(R), and a year-over-year incremental increase of $1.7 million in spending related to marketing and advertising.»

They used to pay a lot in dividends to the preferred shares ($6 million in Q1 and Q2 combined, just $16,000 in Q3), but since the conversion of those shares to common shares, not anymore.

I told my wife about the stock that I bought and she was interested (of course  ). She spent an hour studying the website and said it was irresistible. She said she could buy all the fashion trademarks Sarah Jessica Parker talks on "The Sex and the City" lol. She said "if you know this website, you'll buy here. Very attractive discounts".

For example, we live in Portugal, so many of those designers don't even have a store here. But she can buy through www.bluefly.com. Now imagine all the Chinese, Brazilian, Russian and other countries where there are many high income women that can buy fashion apparel through companies like Bluefly.

I believe this company's potential is enormous, for some reason sales momentum is accelerating. The internet was a flop in 2000 - 2001, it was too early. The public couldn't keep up with the technological change. But now everybody has internet, knows how to use it, and as importantly, is enjoying it. The time to make serious money on the internet is now. Of course, established players have a big advantage, especially when they have $36 M in working capital as BFLY does.

I'm not willing to let go of BFLY anytime soon. This can be another KNOT (or even better).

[David Randolph]

Nevermind the world, just imagine how American women are reacting to these discounts on such quality merchandise:

Shop blackout accessories and shoes

Probably in a couple of years BFLY will be selling $1M an hour, not $1 M a day

[usedcasting]

Would that prediction be based on an 8 hr work day or a 24 hr period.   

Looking to get in!

Thanks Dave

uc.

Probably in a couple of years BFLY will be selling $1M an hour, not $1 M a day

[David Randolph]

Would that prediction be based on an 8 hr work day or a 24 hr period.      

Looking to get in!

Thanks Dave

uc.

You've just reminded me of another advantage of online retailers vs traditional retailers: websites don't close, they sell 24 hours a day.

I exaggerated on that prediction. I mean, I think BFLY can indeed sell $1 M an hour in some time, but not just two years, perhaps more like ten years (because $1 M an hour average translates into $8.76 B in annual sales and the company just sold about $75 M to $80 M in 2006).

I'm sorry, I was excited about the company's website and prospects and not doing an update, just making a small comment.

Let's see if in 10 years time it is possible ... to get to $8.76 B in annual sales by 2016, BFLY's revenues would need to grow at an average annual rate of:

$80 M*(X^10) = $8.76 B <=> X^10 = $8.76 B/$80 M <=> X^10 = 109.5
<=> X = (109.5)^(0.1) <=> X = 60%

Well, I don't think this is impossible. Sales momentum is accelerating from 28% to 35% this year, and it may continue to accelerate, since as my wife puts it "if you know it, you'll buy at www.bluefly.com".

If sales get to $8.76 B in 2016, and we apply a revenue multiple of 2, BFLY will be a $17.52 B market cap company, which translates into a stock price of $17.52 B/129.25 million = $135 a share.

$135 a share implies an annual average gain of:

$1.28*(X^10) = $135 <=> X^10 = $135/$1.28 <=> X^10 = $105.47
<=> X = ($105.47)^0.1 <=> X = 59%

Very attractive.

[Dracull]

Right now I just want it to go to 2$, I'm burning with it at my hands bough at 1.5$

David, is it possible for you to do an analisys at one of my longest hold stock: KANA? I got it at 2$ very very long time ago.

Dracull

[David Randolph]

Right now I just want it to go to 2$, I'm burning with it at my hands bough at 1.5$

David, is it possible for you to do an analysis at one of my longest hold stock: KANA? I got it at 2$ very very long time ago.

Dracull

Yes, your intraday timing was bad on BFLY. But relax, don't watch every tick, the trend is up and in some time I'm confident you'll be in the green.

KANA? I remember a stock with that ticker symbol, perhaps from 2000? I don't have it my Metastock database now, are you sure that's the current ticker symbol? What's the name of the company? Thanks.

[Dracull]

Yes, your intraday timing was bad on BFLY. But relax, don't watch every tick, the trend is up and in some time I'm confident you'll be in the green.

Yes, bad intraday timing, but I have learned to don't be watching the streamer all the time, is exciting, true, but also very stressing, specially if you aren't on a "daytrading fashion".

Kana is a old "friend" since back 2000, that's correct, the symbol is KANA.OB and the name is KANA Software Inc.

In fact, the only high-risk stocks that I have are KANA.OB and XKEM.OB.

[rickjust]

Right now I just want it to go to 2$, I'm burning with it at my hands bough at 1.5$

Dracull

hi dracull ,
you can always buy more at this level 125 , if you feel comfortable that will bring your average price down.
maxi

[David Randolph]

Kana is a old "friend" since back 2000, that's correct, the symbol is KANA.OB and the name is KANA Software Inc.

I've seen KANA's fundamentals, I think it is overvalued. $114 M market cap, losing big bucks every year since inception (accumulated deficit of $4.3 B ). With the balance sheet they have (($13 M) negative working capital) I wouldn't want this company even if they gave it to me for free Lol, sorry, good luck Dracull

What a pity, BFLY was about to close so well, but it fell back down near the close ... I wasn't able to watch the closing action, what was it, a big sell order, a big bid/ask spread? Nevermind, it doesn't matter.

Look at BFLY's e-commerce website again, it has changed since my last update:

www.bluefly.com

I think it rocks.

From what the company has been saying about monthly revenues, I expect it to report sales of between $27 M and $30 M in Q4 2006.

In Q4 2005 the company sold $21.23 M and was almost profitable, losing just $55,000 (well, because it had to pay those preferred dividends, it lost ($1.342 M)). Now there are no preferred dividends to pay (because preferred shares were converted to common shares) and the company is about to sell $8 or $9 M more than at Q4 2005.

I think BFLY will be net income positive this quarter. That will be the first profitable quarter in the company's history going back to 1998.

I love BFLY both short and long term (as you can read on the long term analysis I made just above on this thread). I'll continue holding it.

[Dracull]

Thanks for the feedback at Kana...I sold it 2 weeks ago at 3.45 and was thinking on entering again, but with some second toughs on it....your comment made me difference, not going there again, thanks (and if you think that KANA is bad news, XKEM is worst, but I'm still on in, burning a few bucks  )

I got a dip at BFLY at 1.3, so tell your wife and friends to buy on the side, me on the other hand will not tell to my wife, or else I will go bankrupt for shore

[David Randolph]

Cumulina, when you have time, can you please give me your woman's opinion on www.bluefly.com?

My wife loves it but I could use a second opinion Thanks !

[basonista]

I will have my wife take a look at it also.  Like most women, she loves to shop and has an eye (although not wallet) for quality of product and ease of use and layout of websites.

[cumulina]

Thanks for the confidence, David. 

I browsed the on-line catalog, and the stuff looks really, really nice.
As far as I can tell prices are also reasonable. Especially now, with the $ as low as it is.

Knowing how many women shop by catalog - with a busy workday+family etc. etc. this seems like a winner, as purchases can be made from anywhere, anytime.
Catalog-shopping is very often the best - or only - way for people in remote areas to shop! (I have seen americans stationed outside the USA and how they shop by catalog - amazing!)

Also, not having to shell out rent in expensive malls, paying salespeople, having losses from shoplifting, and other expenses that a clothes-shop usually have, should be a big plus. I can imagine that they can keep as small (or big) inventory as they like, too.

All this being said, I'm neither young, tall nor slender... ...so for me the ability to try clothes on before buying is a must.
And I love to go shopping and "fondle" the clothes in the boutiques!

Depending on their customer-service (hopefully good!) I would guess that this could be a really great thing.

The finances, charts etc. I leave up to you guys to analyze. You are so good at it.
If you are all for it, then I would consider it a BUY!