NVTL

[David Randolph]

In any event, thanks for the pick David (applaud).  I sold at 19.38 for a nice gain.

Yep, nice profit, but I expect more over the medium term. You've been "lucky" with your selling actions lately (example SILC), but someday, maybe today, you'll regret you took your profit, as the stock will continue to climb beyond your selling price.

Anyway, nice 30% plus profit, congrats

[buddjas1]

In any event, thanks for the pick David (applaud).  I sold at 19.38 for a nice gain.

Yep, nice profit, but I expect more over the medium term. You've been "lucky" with your selling actions lately (example SILC), but someday, maybe today, you'll regret you took your profit, as the stock will continue to climb beyond your selling price.

Anyway, nice 30% plus profit, congrats

Thanks.  I just make a decision when I see new data.  That's not "luck."  Rather, it is analysis.  In this case, there are stocks out there with a better upside.

[David Randolph]

Thanks.  I just make a decision when I see new data.  That's not "luck."  Rather, it is analysis.  In this case, there are stocks out there with a better upside.

Sure, in lack of a better word, I put "" around the word luck. No doubt it is analysis. Short term fundamental analysis. Good work buddjas1

I'm thinking I should go back to the analysis on demand, 3 per day method of selecting new stocks to cover. The current way I just start looking at too many without being able to decide on which ones I should make a more in depth analysis. I'm interested in knowing your stocks "with a better upside".

Are we talking IEAM here? I've been studying it everyday, it seems so attractive, from what we've heard at that conference the CEO gave and the move to the Nasdaq (indeed, it happened, it makes me want to believe). Why isn't it going up? It's so strange, volume is drying.

I wonder if it is the difference between EBITDA and EPS on a fully diluted basis. When the CEO said "these non cash charges will go away in Q3", I mean, by how much are the non cash charges impacting the EPS? Should we expect dilution from conversion of something? Do you know? Thanks buddjas1, I'm interested in IEAM. 

[DragonAMG]

In any event, thanks for the pick David (applaud).  I sold at 19.38 for a nice gain.

Yep, nice profit, but I expect more over the medium term. You've been "lucky" with your selling actions lately (example SILC), but someday, maybe today, you'll regret you took your profit, as the stock will continue to climb beyond your selling price.

Anyway, nice 30% plus profit, congrats

Thanks.  I just make a decision when I see new data.  That's not "luck."  Rather, it is analysis.  In this case, there are stocks out there with a better upside.

Like what my friend... I need a couple new winners.

I've done the same as you and I am only now holding 6 stocks from the main portfolio.  GIGM, ALDN, TZOO, NVTL (sold 4%. holding 4%, because like David I see some upside still in this stock.  I just wanted to lock away some profits just in case.), CIMT, MSI.

[buddjas1]

Like what my friend... I need a couple new winners.

I've done the same as you and I am only now holding 6 stocks from the main portfolio.  GIGM, ALDN, TZOO, NVTL (sold 4%. holding 4%, because like David I see some upside still in this stock.  I just wanted to lock away some profits just in case.), CIMT, MSI.

I hold only IEAM, MSI, and CIMT now.  I do like GIGM and may pick that up with the NVTL proceeds. 

I am always searching for better stocks.

[David Randolph]

VPHM results were very strong, the stock is pushing higher by 7% on volume above average. I know la-onda holds this one . I probably should revise upward my estimates for VPHM.

[David Randolph]

NVTL up 6% to $19.8. I told you you would run out of "luck" buddjas1. I'm defining luck here by: "take profits in a bull trend, trying to catch a top, due to a slight fundamental miss of your own expectations, not the market expectations".

You can blame me of making that same exact "mistake" all too often. Why do I think it is a mistake?

Well, if you cover hundreds of stocks like I've been doing (you too, I know), you get to notice that all stocks that make, say, a 500% move, all of them, have some weak quarters in between, fundamentals never come out linear and perfect. I guess one needs to judge fundamentals, like in technical analysis, by the trend, and not one or two data inputs. Investing more from a business perspective.

Just trying to learn here, good luck

Ah, by the way, you didn't comment on IEAM, like I said, the story seems great, but is there any flaw in it? The market behavior doesn't add up to the fundamental story. Any thoughts? Thanks.

[realcoolhead]

Here is a good article to address short-term volatility:

http://www.fool.com/investing/small-cap/2007/05/01/how-to-prevent-a-25-drop.aspx?source=mptoppromo

The "secret" is: just don't look at your stocks so often 

Well, if you cover hundreds of stocks like I've been doing (you too, I know), you get to notice that all stocks that make, say, a 500% move, all of them, have some weak quarters in between, fundamentals never come out linear and perfect. I guess one needs to judge fundamentals, like in technical analysis, by the trend, and not one or two data inputs. Investing more from a business perspective.

[buddjas1]

Well, if you cover hundreds of stocks like I've been doing (you too, I know), you get to notice that all stocks that make, say, a 500% move, all of them, have some weak quarters in between, fundamentals never come out linear and perfect. I guess one needs to judge fundamentals, like in technical analysis, by the trend, and not one or two data inputs. Investing more from a business perspective.

The only difference between your analysis and mine, regarding NVTL, was that I took management's guidance for the full FY07 literally (non-GAAP $1.00).  If that guidance is true (as I think it is), NVTL's upside is very limited.  You have chosen to disregard the guidance (perhaps for good reason); I did not.  I did not use "short-term" analysis here.

[buddjas1]

[Are we talking IEAM here? I've been studying it everyday, it seems so attractive, from what we've heard at that conference the CEO gave and the move to the Nasdaq (indeed, it happened, it makes me want to believe). Why isn't it going up? It's so strange, volume is drying.

I wonder if it is the difference between EBITDA and EPS on a fully diluted basis. When the CEO said "these non cash charges will go away in Q3", I mean, by how much are the non cash charges impacting the EPS? Should we expect dilution from conversion of something? Do you know? Thanks buddjas1, I'm interested in IEAM. 

My full analysis on IEAM is here:

http://www.3stocksonfire.org/trading/index.php?topic=5889.msg93578#msg93578

Last quarter, the non-cash charges took EPS from $0.164 to ($0.19). 

I do not expect dilution as there are only a limited number of warrants still outstanding and the company is repurchasing them pursuant to the $1,000,000 stock repurchase program.

Why is IEAM not going up?  Well, as you would say David, why pay attention to short term noise when the long term is so attractive?

[berloga]

You use good logic, buddjas1, and you're firm in your decisions. This is good. Applaud.

However, even judging by the public's reaction to earnings on NVTL, I am simply reluctant to sell at the moment. It may correct a bit, I agree with David on this one, but I am just stubborn to let go for no good cause. I am even continuing to hold JASO, only for a technical reason at the moment having a stop loss at a comfortable level.

NVTL has a growing business and not having an alternative now, I see no reason to abandon this trade.

[David Randolph]

The only difference between your analysis and mine, regarding NVTL, was that I took management's guidance for the full FY07 literally (non-GAAP $1.00).  If that guidance is true (as I think it is), NVTL's upside is very limited.  You have chosen to disregard the guidance (perhaps for good reason); I did not.  I did not use "short-term" analysis here.

Exactly, very well explained buddjas1. I've disregarded the guidance, because if I took it seriously in the past I would have not bought NVTL at $14.53 and I wouldn't have a 37% profit now, since they keep giving us unrealistically low guidance to then raise it later, as I've shown in a previous post today. So, my holding of NVTL is based on "numbers will be better than what even the company expects." That has been the trend lately. Time will tell.

There's an interesting article from thestreet.com about SWIR and NVTL:

Modem Makers Tap Into Hunger for Wireless Web Access

Instead of buying relative strength, like I've done on NVTL (thanks to a realcoolhead tip, thanks ), the author claims SWIR is more attractive than NVTL because it rose less this year. But simple math shows NVTL is still more attractive than SWIR, here's why:

- SWIR had EPS of $0.2 in Q1 2007, and it closed today at $17.81.
- NVTL had EPS of $0.34 in Q1 2007, and closed today at $19.94.

So, SWIR is trading at 89 times Q1 EPS and NVTL is trading at 58.6 times. Which one is more attractive? NVTL, of course. If NVTL were to trade at the same multiple as its main competitor, it would then be trading at $30.28.

Maybe that's where we're going. I'll keep holding NVTL.

Why is IEAM not going up?  Well, as you would say David, why pay attention to short term noise when the long term is so attractive?

Absolutely, good point buddjas1. Probably people selling IEAM now don't have a clue about the future, they have weak hands. I just read the company's latest 10-K again. That balance sheet is pretty weak, isn't it? And they like to issue shares for cash:



It's somewhat strange that they claim to be buying back so many shares now when just 5 months ago they were issuing shares for cash. But it's not impossible.

I guess you're probably right, but you're buying because of a future catalyst: "earnings will be positive when these non cash charges and interest payments end" (they claim to have a strange accounting for warrants outstanding and that is what is hurting the bottom line). In this case I think I'll wait for the catalyst, even if I pay more for my shares. Something smells fishy here. Good luck man.

Did I write about NVTL? I guess so, I'll keep holding the stock.

[la-onda]

as always David  :

NVTL: Dundee Ups to Outperform from Neutral; Ups Tgt to $22 vs $18
Wednesday, May 02, 2007 10:32ET
Issuer: Novatel Wireless Inc (NasdaqNM: NVTL)
Analyst Firm:  Dundee Securities Corporation
Ratings Action: UPGRADE
Current Rating: Outperform (from Neutral)
Target Price Action: INCREASE
Target Price: $22.00 (+22.22% from $18.00)

&

Novatel Wireless "buy," target price raised
Wednesday, May 02, 2007 7:50:26 AM ET
Montgomery & Co
NEW YORK, May 2 (newratings.com) - Analysts at Montogomery & Co reiterate their "buy" rating on Novatel Wireless Inc (NVTL.NAS), while raising their estimates for the company.
The target price has been raised from $21 to $24.
In a research note published this morning, the analysts mention that the company has reported robust 1Q07 results, with revenues and pro forma EPS ahead of the estimates and the consensus. The revenue upside was driven by higher-than-anticipated shipments of Ovation and PC/Express card, the analysts say. The EPS estimates for 2007 and 2008 have been raised from $0.87 to $1.05 and from $0.97 and $1.25, respectively.

[buddjas1]

I guess you're probably right, but you're buying because of a future catalyst: "earnings will be positive when these non cash charges and interest payments end" (they claim to have a strange accounting for warrants outstanding and that is what is hurting the bottom line).

Well, we all buy stocks because of the future catalysts, right?  Anyway, the CEO told us that those non-cash charges "will all be gone by June 30."  See  http://www.wsw.com/webcast/brileyco8/ieam.ob/ at the 14m35sec mark.  That means that the 10Q for Q1fy08 on Oct. 15, 2007, will be free non-cash derivative charges.  I have no trouble accumulating shares at $6 until then; knowing that the EPS on a GAAP basis will over 50 cents for the quarter. 

And they like to issue shares for cash:
It's somewhat strange that they claim to be buying back so many shares now when just 5 months ago they were issuing shares for cash. But it's not impossible.

That is how IEAM financed the acquisition of PittPenn.  If they did not, I would not be writing this right now.  Have to spend money to make money.  Now that PittPenn is generating $$$, IEAM is buying back up to $10,000,000 of the shares.  Management is really quite good and, now that IEAM has a revenue producer in PittPen, anti-diluting the stock.  Moreover, the CEO stated that IEAM has no need for capital during the next two years.  21min 11sec mark. 

You are looking for something "fishy" here and that's fine.  However, would the CEO keep buying shares (many many shares) just to play a trick on you?  Further, the people at NASDAQ just spent 9 months reviewing IEAM's financials (not an easy process).  If there was something "fishy," then NASDAQ would have caught it.

[yukiii]

IEAM CEO is well known and respected guy. Long since $5.80