FOH

[buddjas1]

"Do you think the numbers were mediocre? I think they were nice."

I was hoping for some growth, so the decline in revenue and income q-to-q disappointed me.

"I guess they didn't disclose more information about FOH because they're not entitled to do it. It's not the time yet."

That is where I disagree.  Why post FOH's revenue and leave out the income?  FOH was obligated to deliver full audited financial information to MSI, I believe on January 22.  So, MSI had the information available.   

"As I see it, MSI shares are valuing FOH at less than $80 M, and that's way below what it should be."

I guess it depends on whether FOH is profitable.  Time will tell, I was just surprised that MSI did not disclose that information in the 10-Q. 

[David Randolph]

I was hoping for some growth, so the decline in revenue and income q-to-q disappointed me.

Ok. My take is the company had enough sales already. I was worried about losses, so I enjoyed the fact that they expanded profit margins.

That is where I disagree.  Why post FOH's revenue and leave out the income? FOH was obligated to deliver full audited financial information to MSI, I believe on January 22.  So, MSI had the information available.

No doubt MSI has all the info about FOH. But that doesn't mean it is allowed (or interested) to make it public. Frederick's will, when the time comes, disclose the information.

I guess it depends on whether FOH is profitable.  Time will tell, I was just surprised that MSI did not disclose that information in the 10-Q.

I was also hoping for more information. Perhaps FOH is not profitable, but I still see it as worth a lot more than $80 M, because I'm sure it will be very profitable somewhere down the road, because www.fredericks.com will gain traction across the world in my opinion.

I think volume was abnormally low yesterday. Really strange, given that results were out. Anyway, I see $2.20 - $2.40 as the minimum possible price over the next three or four months as we wait for news of the merger and more details about FOH, and the upside is more than $6.

I'll continue holding MSI.

[David Randolph]

The market absolutely doesn't care about Movie Star, all eyes and ears are on information about Frederick's of Hollywood. The problem is the latest press release only said the following about FOH:

«Further, we are excited about the recently announced plan to merge with Frederick's of Hollywood. The combined company will have sales approaching $200,000,000, better efficiencies and a powerful brand portfolio."»

The market currently values FOH at:

23.7 million newly issued shares*$2.42 = $57.35 M + 60% of the $20 M rights offering = $57.35 M + $12 M = $69.35 M.

Well, that is less than the price paid to take the company private in 1997, which was $70 M, as you can read here: http://www.bankruptcydata.com/fredericks.htm

I know the company filed for bankruptcy in 2000, but it reemerged from Chapter 11 in 2002 and I think www.fredericks.com has made the company more profitable since 1999 (www.fredericks.com had revenues of $3 M in 1998, $10 M in 1999 and $20 M in 2000. Perhaps $70 M in 2007? That is about half of the company's revenues - the difference being that selling online means less costs than selling through physical stores, so I expect the company to be more profitable now than what it was in 1997).

I believe www.fredericks.com has a bright future, even more so when it starts shipping internationally, or else opens operations in Europe and Asia.

All in all I maintain that MSI shares are a great opportunity at the current market price and I'll keep holding it. 

[David Randolph]

Nothing new at MSI. I see www.fredericks.com personnel has been more active lately, they keep changing the website's homepage (I think that dynamism helps boost sales - by the way, 3 Stocks needs to change its homepage )

I'll continue holding MSI.

[David Randolph]

Nice pick up in volume, as the stock refuses to go down (it also refuses to go up). I believe I've studied every piece of information there's outthere about MSI and my take is it will rise above $6 during 2007. Now I just have to sit tight and patiently wait for the news to come out.

[oicpecnoc]

God forbid saying this on a long term portfolio stock, but this has been a traders dream between 2.36 and 2.50. 

[nullzero]

Bought into MSI between 2.45-2.48. Cant wait till more details of the fredericks merger come out. I bought this from fredericks website for my girl friend just 2 days ago its on its way in the mail
http://www.fredericks.com/product.asp?catalog%5Fname=Holiday2002&category%5Fname=New-Spring&product%5Fid=90818

I decided to try them out since I was getting into MSI. Shopping and checkout was fast and easy. Status of my order was sent to my email promptly. The only complaint I have is they need more interactive viewer for the clothes. (Something like bluefly where you can zoom in more and also add a color changer into it.)

[David Randolph]

God forbid saying this on a long term portfolio stock, but this has been a traders dream between 2.36 and 2.50. 

Yep, one could have done that trade 6 times over the last month and a half, if he knew that was going to be the pattern. Unfortunately, nobody knew or had the tools to predict that. It's always easier to trade on the left part of the chart

Bought into MSI between 2.45-2.48. Cant wait till more details of the fredericks merger come out. I bought this from fredericks website for my girl friend just 2 days ago its on its way in the mail
http://www.fredericks.com/product.asp?catalog%5Fname=Holiday2002&category%5Fname=New-Spring&product%5Fid=90818

I decided to try them out since I was getting into MSI. Shopping and checkout was fast and easy. Status of my order was sent to my email promptly. The only complaint I have is they need more interactive viewer for the clothes. (Something like bluefly where you can zoom in more and also add a color changer into it.)

Thanks for your report nullzero, and great "charmeuse and lace babydoll"

I wanted to buy some stuff for my wife too, but they don't ship internationally, yet.

The chart and the fundamentals tell me this stock will breakout above $3 towards a much higher price. I've been patiently waiting for that and I'll continue to do so.

[la-onda]

on FIRE today 
3.05$ new 52 weeks high

[berloga]

  You're an Oracle, David!! Bansai! That's because I bought 2 fantastic seduction pieces for my wife 2 weeks ago, now that they processed my payment the revenue projection just sky-rocketed. 

  By the way, David, if you want to buy something from Fredericks, just have it mailed to my address in the US and I will send it to you to Portugal for free (I am making enough money now in MSI  )

Berloga.

[nullzero]

Added 3k more shares today at 3.34. Im averaged now around 2.85  .

[nullzero]

Nice close on MSI closed @ 3.35 .

[gix330]

David, as you expected, MSI closed @ 3.35 on Friday. Nice chart and strong bullish signal via MACD, but do you think how long MSI will continue to rally since it is overbought. I often experienced dips not long after overbought, that's why I have sold almost half of my MSI shares on Friday.

[nullzero]

So many stocks have continued to run even after being extremely overbought. MSI might be one of these cases, the market acts in its own manner and you can never know exactly when a runup will lead to a sell off or a sell off will lead to a rebound. Thats why I decided to average up some shares @ 3.35. With any fredericks announcement this stock can run up some more.

[Dracull]

You are quite right nullzero, MACD overbought doesn't mean that the stock will go south soon, it all depends of the overall scenario of the market. Usually on a bearish market it will go south faster, but in a bullish market (which is the case), the stock can remain overbought for a long long time frame before it shows signs of weakness.

I'm a believer of holding MSI at least until the merger announcement....than one must decide to sell at the news or hold it with two strong hands.

Cheers to all from Portugal.