Session of 02/20/2007

[David Randolph]

PCCC looks good  .

Indeed, no doubt the trend is bullish, and the trend is your friend.

Fundamentally:

- Market cap is $469 M. A direct marketer of information technology products and solutions, including brand-name personal computers and related peripherals, software, accessories and networking products through its sales subsidiaries
- No significant dilution over the years
- Balance sheet looks ok, with a 1.9 current ratio
- Revenue trend is quite positive, with $1.635 B in revenues in 2006. This puts the trailing revenue multiple at 0.28, which is low.
- EPS in 2006 was $0.54, but it can be a lot more in 2007 if there's margin expansion. Net profit margin in 06 was just 0.8%. Analysts are expecting 76 cents EPS for fiscal 2007, but the company can trounce this estimate.

I like this fundamental situation, where just a few cost cutting measures can improve profitability by a lot. Why didn't I see it at $6? I still like it ... not buying, but I can see the long term potential. 

[kslifka]

MNDO...I wonder if this small cap (65 million) based in Israel won't report good earnings tonight.  Nice chart

It looks undervalued compared to its competition...however price/sales is a little higher. 

Oh well I bought and will wait for the earnings tonight.  I've seen many of these small caps with good earnings jump after market then go higher the next day. KRSL...AVZA...ZONS... BSQR...ect.  This time I'm going to try to be ahead of the game.

[David Randolph]

if your into penny stocks have a look at sbjx

We're into any stock traded on the NYSE, Nasdaq, AMEX or OTCBB, given that it has a market cap not larger than $500 M.

Jesus, SBJX.OB chart looks like an arrow going to the sky. The stock is up 468% over the past 8 trading days

Fundamentally:

• Market cap is $22.7 M. An innovative provider of intelligent communications solutions for the Internet and Intranet environments.
• Balance sheet is bad, with negative working capital
• Revenue trend ... well, the company sold just $5,000 in Q3, even 3 Stocks sold more than that, I wish it were worth $22 M too

There must be news driving the recent share price surge, let me check that:

• Subjex Corporation Exceeds $1 Million Dollars in Funds Mirroring Trades; Auditor Verifies 2006 Trade Gains of 70.8% per GIPS Standard
Market Wire (Mon, Feb 12)

Wow, this is really an interesting situation. The company claims to have a software that predicts the Dow Jones Industrial Average with an accuracy of nearly 80%, over the very short term.

I don't believe this can be done.

I could pick some Google ads rolling on 3 Stocks claiming the exact same thing (or even better), and of course those websites are not worth $22 M. Not even $1 M. I think the same is true for SBJX.OB, not worth a million dollars, and the stock will go down 90% on the "after hype" period.

[kpusan]

Good Morning

NTTL is on fire still holding @ .42

Absolutely kpusan63, great pick

Here's my take on it the other day:

«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 »

There's another stock outthere, which is CVDT.OB, that looks more or less involved in the same business as NTTL.OB, but CVDT.OB is valued at 10 times more or so. It could be interesting to compare the two companies.

NTTL.OB needs substance. Do you know of any "substance" out lately? Thanks

Hi David,

NTTL.OB this play was based on TA which was based on volume/breakout(.40).  I have read and listened to recent PR's and potential growth and revenues are growing.  Now, I take the recent PR releases with a grain of salt due to this being an OTC company since I have gotten burned with prior OTC company releasing "false" information.  I tend to trade mostly on TA but I am learning from you to also take a "pause" and look at the fundamentals prior to buying.  Luckly, this one is turning out well and will watch it with closely for any breakdown in price.

Below are some podcasts from the company.  Any opinions would be of great welcome.

http://podcast.streetiq.com/streetiq?GUID=1052138&Page=MediaViewer&Ticker=NTTL

[BigSully1]

David, you could look at HURC for me. It's not exactly on fire today, but yesterday made a big move on earnings. THNX

[David Randolph]

RICK

Fairly priced?

Technically RICK is bullish. Let's make some fundamental tests:

• Market cap is $55 M. The Company currently owns and operates nightclubs that offer live adult entertainment, restaurant and bar operations. The Company also owns and operates several adult entertainment Internet websites.
• RICK's management has the bad habit of diluting shareholder's value year after year. First, check that trend here
  You can see the share count grew from 2.1 million in 1997 to 4.9 million currently. Making a fairly simple equation ...
  
  2.1 million*(X^10)=4.9 million <=> X=(4.9/2.1)^0.1<=>X = 8.84%
  
  ... I see the share count has been rising 8.84% a year for the past 10 years, and that can erase all share price appreciation.
• Revenue trend is somewhat positive, with $24 M in revenues in 2006. This puts the sales multiple at 2.3
• 2006 EPS was $0.38, so the trailing earnings multiple is 27, which looks high

I like the company's sector, but you're right kpusan63, it seems fully valued at current levels.

[Sterlis]

David,

What are your thoughts on ETLT at this point - it seems to be stuck.

(This is where you tell me to be patient ) I know I know.... Wait.

[nica33]

David, could you check VDSI ? It's on fire today after earnings report

[David Randolph]

Hi David!!  i would like to know your toughts for CSUH.ob.  There is not a lot of information about it but I think the product could be interesting.  They offer a calorie burning soda.

Thanks for your great work.  Everyday I learn a lot from you and from the 3SOF community 

Thank you too nica33

The company made its IPO quite recently, am I right? Today it is up 8% to a new all time high on heavy volume. Hmm, now I see contradictory information. I guess this company changed its ticker symbol, because the business description I have on my fundamental service is mining company with no operations, not a "calorie burning soda" company

Fundamentally:

• Market cap is $354 M (this looks like a lot for an OTCBB traded company)
• Balance sheet is very "small", just $345 K in assets
• Revenues were $0 in Q4 2006

Well, it says on their latest balance sheet that previously they were Vector Ventures Corp and Celsius Holdings now.

It also says this: «97,603,746 common shares issued and outstanding as of February 8, 2007».

So, we're talking about a $354 M company with $0 in revenues. This looks like another EVCC.OB nica33, those press releases about the "calorie burning soda" are just a pump & dilute scheme.

My take is CSUH.OB will go down 90% before 2007 closes.

[2bun]

Take a look at SYNX ,AT HOD @ 2.08ish.If it gets some volume ,it's gonna fly.Low floater

[nullzero]

CSUH looks like a good short  .

[bourbonstreet_crawdaddy]

Hi David,

Thank you for your analysis of DSEN.OB. If you get a chance, can you please give us a quick evaluation of CXTI.OB. I think there is a lot of potential there, especially since the analysts are expecting EPS of .26 for 2006 and .55 in 2007. I think the revenue expectations for 2007 are very low.

CPNE.OB is looking very healthy - reminds me very much of the TASR ride below $10..... thank you very much for your insight into this wonderful story!

Have a terrific CPNE.OB Day!

Bourbon   

[David Randolph]

David,

What are your thoughts on ETLT at this point - it seems to be stuck.

(This is where you tell me to be patient ) I know I know.... Wait.

ETLT.OB had a perfectly natural correction to the 50% Fibonacci retracement level. You hold on to that horse, because when it runs, it will easily cross $1. At least fundamentals say it will.

Regarding patience, Livermore had the following to say:

«And right here let me say one thing: After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I've known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level which should show the greatest profit.

And their experience invariably matched mine - that is, they made no real money out of it. Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money. It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance.

The reason is that a man may see straight and clearly and yet become impatient or doubtful when the market takes its time about doing as he figured it must do. That is why so many men in Wall Street, who are not at all in the sucker class, not even in the third grade, nevertheless lose money. The market does not beat them. They beat themselves because they cannot sit tight. Old Turkey was dead right in doing and saying what he did. He had not only the courage of his convictions but the intelligent patience to sit tight.»

[spiritgate]

Ok  ZERO was a bad pick-  last time I listen to friends who don't know much more than I about this stuff-  but how about AMNT.  It's a growing company in a fast growing market.  Amish Naturals.  They just got Organic and Kosher approval.
This one can wait till tomorrow but I must find a way to redeem myself after ZERO.

[David Randolph]

Take a look at SYNX ,AT HOD @ 2.08ish.If it gets some volume ,it's gonna fly.Low floater

What do you mean low floater 2bun? I would pay attention to the market cap, not the float. The definition of float is:

«The number of shares of a security available for trading by the public. A company can have 20 million shares outstanding and only 7 million float. A stock with low-float means there is a limited supply of shares, which can often make a stock more volatile.»

I think it doesn't matter all that much who holds the shares, insiders, institutions or the public, but how many shares outstanding are outthere. That is what tells me the market cap and the value of the company. The lower the number of shares outstanding the less $1 of the share price is worth, hence the quicker it can move. The float being low can only lead to a large bid/ask spread, and that's not good, not even for day traders (even though they think it is).

Technically the stock is somewhat bullish, but average traded volume is low, just 28,000 shares traded today.

Fundamentally:

• Market cap is just $10.5 M.The Company was organized to acquire controlling interests in companies engaged in the design, manufacture, distribution, and sale and servicing of fire, life safety, security, energy management, intercom, audio-video communication and other systems.
• The share count doesn't show significant dilution over the past 3 years
• Balance sheet looks ok
• Revenues declined 25% in 2006, to $15 M. Price to sales ratio is about 0.7
• The company had a negative EPS of ($0.14) in 2006

Fundamentals are so so, a bit on the negative side. I don't see a catalyst to push the stock much higher or lower from current levels. I'm neutral on SYNX, good luck 2bun