Session of 02/12/2007

[bourbonstreet_crawdaddy]

Hello David,

I hope that it is not raining too bad where you are, and that the sun comes out soon. I am holding a position in ALY, and would like your input on whether I should continue to hold over the intermediate term. ALY recently diluted the shareholder base by 6 Mil shares, through a secondary offering at $17.65. Aly's market cap is near 430 Mil.

ALY's growth is fueled through a combination of acquisitions and organic growth in the oil drilling equipment and services industry, and has been explosive in the past 18 months. The current analyst expectations are that the company will only grow 10-15% in 2007, and I believe that the management team has proved that they can grow the company at a much higher rate.

I believe that the recent dip is a result of the dilution, and because oil is currently out of favor. Can you see the stock rebounding in the next few months, to reach new highs - or do you see the stock floundering as the management team continues to dilute the shareholder base?

If you would be so kind, please take a moment to share your keen insight with me.

Have a terrific day!

Robbie

[KCScott]

TRMM back on fire today

Good looking chart

[David Randolph]

Short on Fire CBAK?

Well, it looks like my short on CBAK (Short CBAK today) was absolutely right. It's a pity my hands were not strong enough.

What a sell off

Anyway, in my view there's no such thing as a short on fire ... you're the one who is on fire today

[cramercramer]

XIDE -Fully Diluted EPS 3Q-0.18 2Q-1.16 1Q-1.51 4Q-3.05 .

Pretty sure will keep up

[makingmoney]

PFSW - my concern is the gross margin. they are pretty low. Just looked 10Q breifly, the product segment only have 6%? (not certain about the number).  ecost.com is just an online also runs and will never be profitable. however, PFSW does show good growth in service segment (which have higher margin). Just my 2 cents and I can be totally wrong. good luck

[dwest718]

TRMM looking very good again!

[David Randolph]

Hello David,

I hope that it is not raining too bad where you are, and that the sun comes out soon.

Hi ralekson, actually it is sunny here, but there was an earthquake a couple of hours ago that scared me It is a very rare event, but there was a huge one in 1755 that destroyed half of Lisbon.

Yes, let me take a look at ALY, never heard of that stock before, so thanks for the request

The medium and long term technical trend, given by the slope of the moving averages and an ascending trendline, is still bullish. But, as you say, the stock has been weak in 2007.

Fundamentally:

- Market cap is $430 M. Company provides services and equipment to oil and natural gas exploration and production companies, domestically in Texas, Louisiana, New Mexico, Colorado, Oklahoma, Mississippi, Utah, Wyoming, offshore in the Gulf of Mexico, & internationally in Mexico.
- Balance sheet shows growing long term debt, at $262 M now. That can put pressure on future earnings, as interest costs erode net profit margins.
- Revenue trend is quite positive. Growing strongly for eight quarters in a row, which is impressive. Revenue in Q3 alone was $85 M. On average, analysts are expecting revenues of $305 M for fiscal 2006 and $522 M for fiscal 2007.
- In terms of EPS, the company was profitable for the past three quarters and is expected to earn $1.74 in 06 and $2.15 in 07. That puts the forward earnings multiple at 8 which is attractive.

Let's put the dilution issue in context:



The share count has been increasing about 14% a quarter since Q1 2004

That by itself made the market cap rise 520% without any increase in the share price (that is, the share price rose, but the market cap rose a lot more).

As you say, recently they sold 6 million shares more and sold $250 M in convertible notes to pay down debt. That will put the potential share count at about 45 million and that means the market cap will be around $780 M considering the price the stock is trading now. That will also make it harder for the company to meet the EPS projections, and this way it doesn't look so cheap, with a higher than 1 revenue multiple.

I really don't like dilution and I would say this management doesn't have an history of working for the shareholder's benefit. Yes, they are growing the company, but at the expense of the shareholder, not for the shareholder, because a shareholder needs the share price, not the market cap, to rise!

I'm not a fan, I wouldn't invest in this company, but thanks for the suggestion, good luck

[TraderStar]

An old friend, IBIN ... seems to be seeing some action today

[David Randolph]

TRMM back on fire today

Good looking chart

The stock surely threw all weak hands out of board, with Friday's dip below $2.78. I would be glad to see it run above the $3.30 resistance level, towards $4 - $5, I know some people here still hold TRMM. I still trust the fundamental equation I made some days ago that told me TRMM is worth more than $6 a share with the current public information, perhaps I should have bought it for the Main.

Good luck to all patient holders of TRMM

[kpusan]

NTTL

David, I looked at the covered stock list and didn't find this one listed.  I am surprised it wasn't requested.  Opinion please.

[nullzero]

ONXX has been just exploding to the upside!

[dnickers]

Hey David - JRJC please

[David Randolph]

An old friend, IBIN ... seems to be seeing some action today

You're probably one of the few friends IBIN has, it is a very low volume stock. Anyway, crossing the 200 days moving average to the North today, with 56 K shares traded, so let's take a brief look at it.

- Market cap is $12 M. The Company is a holding company for three software subsidiaries: IBSG, a provider of turn-key digital service center software; Secure Blue, Inc., a Sarbanes-Oxley and security software solution provider and IBSD, a software development, maintenance.

Ahhhh, now I see what IBIN is, my friend too Didn't they change the symbol?

The stock barely moved all these months ... it looked so attractive. But I remember the problem was the receivables that were too high. Let me check the balance sheet now. Still $11.68 M in receivables.

- Revenues look nice, around $2.8 M a quarter and the company is profitable.

From what I read on the recent press releases fundamentals have been slowly but surely improving, and I think IBIN is undervalued at this point. It is about the same price (post reverse split) I bought perhaps a year ago, so ... kind of dead stock, but I like it fundamentally. Someday, it will run higher.

[David Randolph]

NTTL

David, I looked at the covered stock list and didn't find this one listed.  I am surprised it wasn't requested.  Opinion please.

NTTL.OB is enjoying a nice bull run in 2007. The chart is bullish. But volume is still low, just $178 K, I'm surprised you're surprised this wasn't covered yet

We covered just a bit more than 200 stocks so far, but there are what, 7,000 small caps out there? Still a long, long way to go to know them all ... but I have time, in fact, all the time in the world.

Brief fundamental study of NTTL.OB:

- Market cap is $16 M. The Company develops telecommunications software as well as a web security and financial software packages. The Company is a telephony company in the exploding VoIP industry.

"Exploding VoIP industry" probably means financials are lousy ... let's see, the balance sheet, yep, negative working capital of ($488 K).

Revenues were declining to almost zero (I bet they changed the business model), but had a big jump in Q3 2006, to $2.6 M.

Ok, despite the weak balance sheet I guess NTTL.OB is involved in several businesses that have huge potential, like the AVOP and the www.tougi.com.

The market cap doesn't look too high at about $16 M and the chart is awesome.

I would say NTTL.OB is a nice catch, good luck

[kslifka]

TRT reported earnings last Friday.   Not really on fire today but holding up well after the gap up on Friday.

Trio-Tech Reports Fiscal 2007 Second Quarter Net Income of $0.25 Per Share Versus a Loss From Continuing Operations of $0.15 Per Share as Revenue Increased 89%
Friday February 9, 7:30 am ET