3SOF

buddjas1 · June 11, 2007, 09:48:33 AM

About time.

das317 · June 11, 2007, 09:49:18 AM

What's going on with MSI? I saw 20,000 shares traded already, which is high for this company, so I jumped in at 2.25 and now it just jumped.

buddjas1 · June 11, 2007, 09:59:31 AM

Just the technical time to buy, as we have previously discussed. We all knew this was coming.

David Randolph · June 11, 2007, 10:01:18 AM

Jesus, FOH's financial details are out, company is profitable, give me 10 minutes to review them!

David Randolph · June 11, 2007, 10:10:59 AM

FOH's financial details out in form S-1:

Ok, very quickly, I see $1.9 M net income in 6 months, so about $3.8 M for a full year. Currently the market is valuing FOH at 23.7 million*$2.45 = $58 M, or about 15.3 times net income. The Textile - Apparel Clothing industry trades at average of 20.15 times earnings.

The market also enjoys the fact that MSI will receive $20 M even if investor's don't exercise their rights to buy new shares.

buddjas1 · June 11, 2007, 10:20:03 AM

Margins are much lower than I thought they were. $802 million of the $1.9 million income is an income tax benefit. The revenue growth is nice. Perhaps MSI will be the manufacturing arm of FOH, which perhaps would help the margins. Tough call to make here.

David Randolph · June 11, 2007, 10:44:34 AM

Quote from: buddjas1 on June 11, 2007, 10:20:03 AM
Margins are much lower than I thought they were. $802 million of the $1.9 million income is an income tax benefit. The revenue growth is nice. Perhaps MSI will be the manufacturing arm of FOH, which perhaps would help the margins. Tough call to make here.

Yeah, I didn't saw that $802 K tax benefit at first glance. On my valuation model I had 5% net profit margin estimate. Without that tax benefit, over the past 6 months, the net profit margin was $1.1 M/$80.2 M = 1.37%, so, I agree with you, net profit margin is lower than my forecast.

But the forecast was for 2009, so it is possible that the merger benefits will allow the net profit margin to expand from roughly 1.4% to about 5%. Also, we're looking at a combined company with about $210 M annual revenues, and combined market cap currently is 40.2 million*$2.4 = $96.5 M + $20 M rights offering = $116.5 M.

Price to Sales Ratio is 0.55 compared to the industry average of 0.76.

Yes, just mildly undervalued. I'll keep holding it though, I never change the trading plan over the intraday.

buddjas1 · June 11, 2007, 11:00:42 AM

David, are you going to look at ELP? Also, what changed with ACH between the first time you reviewed it and the second time you reviewed it.

David Randolph · June 11, 2007, 11:19:32 AM

Quote from: buddjas1 on June 11, 2007, 11:00:42 AM
David, are you going to look at ELP? Also, what changed with ACH between the first time you reviewed it and the second time you reviewed it.

Did you ask for ELP in www.stocksonvideo.com? If you did, I'll cover it.

What changed about ACH was that in the first analysis I considered the next 10 years and in the second analysis I considered just the next 3 years. I expect the company to grow rapidly over the next three years, but not all that much in a longer time frame, since it is already a $15 B market cap company.

buddjas1 · June 11, 2007, 11:35:53 AM

I mentioned it here and you said that you were going to cover it:

http://www.3stocksonfire.org/trading/index.php?topic=9494.msg99887#new

It is not that big a deal to me, as I can do my own analysis. I was just trying to give you a good stock, like I did with ACH.

DragonAMG · June 11, 2007, 11:46:51 AM

It's about time this thing popped...

David Randolph · June 11, 2007, 11:56:42 AM

Quote from: buddjas1 on June 11, 2007, 11:35:53 AM
I mentioned it here and you said that you were going to cover it:

http://www.3stocksonfire.org/trading/index.php?topic=9494.msg99887#new

It is not that big a deal to me, as I can do my own analysis. I was just trying to give you a good stock, like I did with ACH.

Thanks for your help buddjas1, I'll take a look at ELP.

What about IEAM, is it next quarter that the share base compensation will go away and the company will show a nice positive net income number?

Thanks

buddjas1 · June 11, 2007, 12:06:31 PM

Quote from: David Randolph on June 11, 2007, 11:56:42 AM
What about IEAM, is it next quarter that the share base compensation will go away and the company will show a nice positive net income number?

The report for the Q ending Sept. 30 '07 should be clear of the derivative charges.

DragonAMG · June 11, 2007, 12:07:40 PM

Quote

What about IEAM, is it next quarter that the share base compensation will go away and the company will show a nice positive net income number?

Thanks

Insiders have been buying up shares in the $5.00 range

Same thing happened with ASY and it is up 33% from the price it was when you reviewed it and I sold it

David Randolph · June 11, 2007, 02:19:15 PM

Quote
Same thing happened with ASY and it is up 33% from the price it was when you reviewed it and I sold it

Yes, I gave it a rating of 6 out of 10 and expected it to rise about 7% per year, but it seems a new product of the company had very nice sales in April and the stock rose a lot in the two days subsequent to the news. Revenue growth is now expected to be higher than I estimated. Fundamentals change.

ASY is such a small cap, just $26 M, it can fly a lot when news hits the wires. But beware of dilution going forward, because balance sheet is weak.

I can't predict the future or if positive news will be released or when. Much less so for companies where I looked just about 1 hour or 2.

But MSI is up 20% today and this is its thread, so let me enjoy the moment

News:

FOH