Session of 02/06/2007

[David Randolph]

David,   How about Vsty?    Cathleen

Let's see, the stock can be oversold, but the trend is bearish as you can see on the chart below Cathleen. I like charts where the right part is higher than the left part, if you know what I mean.

Anyway, let's check the fundamentals:

- Market cap is $38 M. Varsity Group Inc. is an outsource solution provider to education institutions nationwide. Under the brands Varsity Books and Campus Outfitters, Varsity provides solutions that enable schools to focus on their core educational mission. Varsity Group's solutions include online textbook, school supply and full-service school uniform services.
- No liquidity problems shown by the balance sheet
- Revenues were growing nicely until 2005 and in 2006 ... well, this is weird, revenues had a big jump in Q3 2006 but the company lost $15 M over that quarter.

This requires more than usual investigation, but that's where the best opportunities lye.

The CEO resigned in November 21th, after the company reported disappointing 3rd quarter results. Ok, now I understand why the revenue differences, this company is the most seasonal I've ever seen, almost all of their yearly sales are made in Q3.

I think this could present a nice turnaround play Cathleen. I'm not a big fan of turnaround plays (because the turnaround may not happen, it's a risky investment, because it goes against the trend), although I admit they can sometimes give a huge return to investors.

I wish I had time to look at this in more detail, probably I'll do it tomorrow before the open. Anyway, not on fire today with very low volume changing hands, good luck

[kslifka]

HBDT.ob...

[boatguy]

PXLW moving past 2$

[tokyopua]

SLP on fire, bullish chart, good financials

[David Randolph]

TKO getting some attention

Hi boatguy, good morning, yes, TKO is up 4% today with 1.2 million shares changing hands, that's nice. Today's high on my quotation system is $4, do you have the same number?

Anyway, there's strong resistance around $3.7 or so. Let me check the fundamentals:

- Market cap is $204 M. Develop products for use in the powerline communications (PLC) industry. PLC products use existing electrical wiring in commercial and residential buildings to carry high speed data communications signals, including the Internet.
- Balance sheet is, how should I say this, acceptable but small. This means the current ratio is 2.08, but total assets are just $16.3 M, and that seems too low for a $200 M plus company.
- As for revenues and profits, the picture is scary, over the last 4 quarters they sold just $4.96 M, and lost $27 M over the same period.

Today's advance is hype due to the following press release:

• Telkonet and GE Energy Develop Integrated Utility Substation Automation System
Business Wire (Tue 9:30am)

The news seems very positive, but I'm pretty sure it is already priced in. Fundamentals don't support the current valuation, I guess the stock will pullback and tank hard.

We'll see ... anyway, good luck if you own it

[MrChina]

ZVUE IS A GREAT SPECULATIVE BUY TODAY

TOMORROW CONFERENCE CALL!

AFTER LAST CC  ZVUE HAVE JUMPED

[David Randolph]

LTS trying to break to a 3 year high

Yes, LTS is pushing sharply higher today, 11.4% as I write (but not exactly breaking out, can be developing a double top pattern). The stock is # 9 on our Stocks Covered List, but I couldn't understand it on the first attempt. Let's see if I'll be able to do it now

Technically January's high of $2.08 is the key point. The stock should be able to close a good 3% above it for this move to be considered a bullish breakout.

Fundamentally:

- Market cap is $314 M. It is engaged in retail and institutional securities brokerage, investment banking services and investment activities.
- Balance sheet is weird, different. I can't see what are current assets and liabilities. $8.14 M in cash.
- Losing money in 2001, 2002, 2003, 2004 and 2005, for an accumulated deficit of ($104.7 M).
- In 2006 the company is making just a bit of money, EPS of $0.04 for the past 4 quarters.

Ok, I guess I see more or less what's going on with this stock:

«On September 11, 2006, Ladenburg acquired substantially all of the securities brokerage accounts and registered representatives and employees of BroadWall Capital. On October 18, 2006, we acquired Telluride Holdings and its operating subsidiary, Capitalink.»

The share price increase has to do with these acquisitions. I'm not able to value them at this stage (I don't think they're public companies), but of course they cost money and shares. Perhaps the recent price rise has been done to create a market so previous owners of BroadWall Capital and Telluride Holdings can unload LTS shares with a nice premium:

«In connection with this acquisition, we issued to BroadWall Capital ten-year warrants to purchase 1,500,000 shares of our common stock at an exercise price of $0.94 per share. These warrants were subsequently distributed by BroadWall Capital to its members.»

«In exchange for all the capital stock of Telluride Holdings, we paid Messrs. Cassel, Salpeter and Steiner $1,000,000 in cash and issued to them (i) 4,000,000 shares of our common stock and (ii) ten-year warrants to purchase 2,900,000 shares of our common stock at an exercise price of $0.96 per share.»

I don't like the story, I'll avoid LTS, despite the chart.

Thanks for the suggestion

[TraderStar]

NGS and IIG, I mentioned them both yesterday (page 3) as they came up on my scan, but no comment from David... they are both up quite a bit today .. still worth looking at? 

[David Randolph]

SBEI,moved from mid.60's to mid .90's in one day!Something is up here,low volume though.9 mill float

You're right, very low volume traded today, in dollar terms, just $131 K, so it can't be considered on fire, despite the short term bullish chart.

SBEI is such a small company that I find it almost incredible how it has been publicly traded at least since 1980 (that's how far my Metastock database goes) , as you can see on the all history chart below.

The stock is able to make huge moves, up and down, it has done that in the past. Moving up now. Let me check the financials of the company:

- Market cap is just $9.79 M. The Company develops and provides network communications and storage solutions for original equipment manufacturers ('OEM') in the embedded systems marketplace.
- Balance sheet is "small", with just $4.9 M in total assets. But there are no liquidity problems, with the current ratio standing at 2.32 (I like to see it above 2)
- Revenue and profit trends are awful, selling less and losing more and more each quarter. Lost $16.2 M in Q3 alone, that's almost double the market cap.

The catalyst for the recent advance phase was this news out on January the 22nd:

• SBE and Neonode Announce Execution of Merger Agreement
Business Wire (Mon, Jan 22)

Hmmm, this is interesting, basically SBEI is being bought by a Swedish company, for this last to be a US publicly traded company. SBEI will issue 57 million shares more for this reverse merger transaction, so the current $0.85 share price represents $0.85*(57,000,000+8,570,000) = $55.7 M.

The question is, how much is the Swedish company worth?

We know the following about it:

Neonode is a Swedish based developer and manufacturer of multimedia mobile handsets. With over five years of research and development Neonode is today a leader and trendsetter in buttonless touch screen mobile phones and gesture based user interfaces. Neonode mobile phones are based on patented technologies. With Neonode's open Microsoft based platform consumers can themselves upgrade and customize their handsets similar to a PC.

In close collaboration with leading electronic manufacturers Neonode strives to create a leading alternative brand within the premium mobile device market. Neonode was founded in 2001 and has its main office in Stockholm, Sweden. More information is available at www.neonode.com

It is a private company, so hard to value. Wow, their website is really innovative, brilliant idea I should say ... the story looks interesting, I'm going to annotate this here for further study, volume is very low though.

Thanks for the suggestion, and if anyone has time, please dig some more and post your findings. Thanks

[David Randolph]

Damn complacency, while I was studying other stocks, RDCM broke down badly. I could sell just a moment ago at $3.06.

I should have sold right at the open, because yesterday I saw they're diluting shareholder's value in a big way, but I thought it could run some more

The stock is no good, despite the best quarter ever in terms of revenues and EPS. I hate dilution.

[tokyopua]

PARL on fire on news, good financials after a quick look...

[cramercramer]

SMD moving up nicely

[dnickers]

PARL on fire on news, good financials after a quick look...

Nice call   In at 7.44.

[David Randolph]

PARL on fire on news, good financials after a quick look...

The market cap is advancing $31 M due to three new guys joining the board of directors. I wish I were worth that much

Facing resistance just above $8, good luck

[leafsrule99]

Wow touch 7.60... dont get it...how come its gone up in price so much?