Session of 03/20/2007

[David Randolph]

Hello there

I'm still going for a coffee so probably I won't be here right at the open, but I'm not buying or selling anything, so no big problem.

I made the first of the 3 most voted analysis of yesterday's poll, which was SYX and you can find that analysis on yesterday's thread. Over the afternoon I'll make analysis on GTW and ONT.

I'll also try to drop a few lines on stocks that you bring up for the poll that we'll run after the market's close. I'll also add some stocks coming up on my technical filter.

The more stocks I study the more I see that two fundamental components drive stocks over the long term: revenue growth and net profit margin.

We'll talk, have a nice day

[buddjas1]

Hi David, at some point, I would like your take on ACH.

This was my analysis:

http://www.3stocksonfire.org/trading/index.php?topic=9132.0

[David Randolph]

Hi David, at some point, I would like your take on ACH.

This was my analysis:

http://www.3stocksonfire.org/trading/index.php?topic=9132.0

First of all let me say that you made a great effort in studying ACH, you deserve a 5 point boost to your rating!

That 25:1 share/ADR ratio and the numbers presented in RMB instead of USD are a bit confusing, and maybe that's why there's an opportunity there.

Net profit margin and revenue expansion look awesome!

I'll put this one for the poll, but don't worry, even if it isn't one of the 3 most voted, I'll cover it, thanks for the tip

[kslifka]

HRSH

Up 47% on earnings.  Small Market cap.  Turned profitable:

Hirsch Reports 150% Increase in 2006 Net Income and Tripling of Operating Profits
Tuesday March 20, 8:30 am ET
New Products and Strong Balance Sheet Provide Opportunity for 2007

HAUPPAUGE, N.Y.--(BUSINESS WIRE)--Hirsch International Corp. (NASDAQ: HRSH; "Hirsch"), the leading provider of advanced commercial embroidery systems and support services in the U.S. and the recently appointed exclusive distributor of MHM screenprinting equipment and support services in North America, reported its financial results for the fourth quarter and eleven months ended December 31, 2006. Hirsch has changed its fiscal year end from January 28th to December 31st, which is reflected in the Company's reporting of financial results for the eleven months ended December 31, 2006 as compared to the twelve months ended January 28, 2006.

Highlights of the fourth quarter and year ended December 31, 2006 results are as follows:

    * Net sales increased $3.2 million to $15.2 million for the quarter ended December 31, 2006, as compared to $12.0 million for last year's fourth quarter which ended January 28, 2006. For the eleven months ended December 31, 2006, net sales were $49.9 million as compared to $51.1 million for the prior twelve month period ended January 28, 2006.
    * For the quarter ended December 31, 2006, gross profit increased $1.1 million to $5.4 million, as compared to $4.3 million for the quarter ended January 28, 2006. For the eleven months ended December 31, 2006, gross profit was $17.5 million, or 35.1% of net sales, as compared to $17.1 million for the twelve months ended January 28, 2006, or 33.4% of net sales.
    * Operating expense decreased $200,000 to $4.4 million from $4.6 million for the quarter ended December 31, 2006, as compared to the quarter ended January 28, 2006, and decreased $1.1 million to $15.4 million for eleven months ended December 31, 2006 as compared to $16.5 million for the twelve months ended January 28, 2006. For the eleven months ended December 31, 2006 and for the twelve months ended January 28, 2006, operating expense as a percentage of revenue remained relatively constant. Included in the twelve months ended January 28, 2006, was a $147,000 charge for severance costs associated with the Company's continuing reorganization.
    * Operating income for the quarter ended December 31, 2006 was $1.0 million, an improvement of $1.2 million over the operating loss of $0.2 million for the fiscal quarter ended January 28, 2006. For the eleven months ended December 31, 2006, operating income improved by $1.5 million to $2.1 million from $0.6 million for the twelve months ended January 28, 2006.
    * For the quarter ended December 31, 2006 the Company reported net income of $35,000 versus net loss of $291,000 for the quarter ended January 28, 2006. Included in the three months ended December 31, 2006 was a $1.0 million reserve against the note receivable from Sheridan Square Entertainment and included in the quarter ended January 28, 2006 was income from discontinued operations of $447,000. For the eleven months ended December 31, 2006, the Company reported net income of $1.3 million, compared to net income of $537,000 for the twelve months ended January 28, 2006

[David Randolph]

HRSH is a $33 M market cap now with sales of $49.9 M over the last 11 month period.

On the news it says net income for the 11 month period was $1.3 M, and just $35 K for the most recent quarter, so I guess it is trading at about 25 times trailing earnings now.

I'm not sure the news is that good, would have to dig more ... will put it up on the poll as a candidate for a more in depth analysis.

[WallStreetnBio]

Dave you guys should buy TGC. Tengasco, Inc. engages in the exploration, production, and transportation of oil and natural gas in Kansas and Tennessee. I'm expecting earnings to come out after the bell today. Last year on 3/20/06 TGC went from .75 to $2.00 on the earnings release.

They have higher revenue in the first 3 quarters of 07 than all of 06 so this 4th quarter is just icing on the cake. Here is the increase of production;

Year-Month Barrels(Oil)
2003-01     10,396
2003-02     10,016
2003-03     10,762
2003-04     11,025
2003-05     12,174
2003-06     12,025
2003-07     12,662
2003-08     11,160
2003-09     10,175
2003-10     11,048
2003-11     8,193
2003-12     9,731
2004-01     11,181
2004-02     10,554
2004-03     10,890
2004-04     10,567
2004-05     10,083
2004-06     11,029
2004-07     10,528
2004-08     10,117
2004-09     10,801
2004-10     11,975
2004-11     10,195
2004-12     11,457
2005-01     10,048
2005-02     10,281
2005-03     10,272
2005-04     10,924
2005-05     8,960
2005-06     11,366
2005-07     15,160
2005-08     14,071
2005-09     11,109
2005-10     12,971
2005-11     13,972
2005-12     16,463
2006-01     14,912
2006-02     13,309
2006-03     15,144
2006-04     14,919
2006-05     15,242
2006-06     18,410
2006-07     15,462
2006-08     16,350
2006-09     17,731
2006-10     17,659
2006-11     21,174  

Percent change in production versus same month in 2005 (similar to comparing Q1 to Q1):

2006-01  14,912   48.4%
2006-02  13,309   29.5%
2006-03  15,144   47.4%
2006-04  14,919   36.6%
2006-05  15,242   70.1%
2006-06  18,410   62.0%
2006-07  15,462   2.0%
2006-08  16,350   16.2%
2006-09  17,731   59.6%
2006-10  17,657   36.1%
2006-11  21,174   52%

This link explains the operations and production

The latest insider information for the month of January shows 36,000 shares purchased and 6,100 shares sold.

Can you do a 10 minute video Dave...pretty pretty please 

[David Randolph]

10 minute video only for tomorrow because I'm still doing GTW and ONT today. TGC is trading just $34 K today, so it's a low volume stock, with $43 M market cap, that's why it can fly so much over the short term.

I have 5 cents EPS over the last 12 month period, so the stock is trading at $0.74/$0.05 = 14.8 times trailing earnings.

Net profit margin over Q3 2006 was very high at 23%, and that also explains why the stock can move so much, just a bit of revenue expansion and 23% of it go to the bottom line.

The numbers you got for the number of barrels are interesting. I don't have time now, but if you could answer the following questions, you would see if the trade is right or not:

1) How many barrels sold over the last quarter period and at what price (check the oil price at at stockcharts.com, symbol is $WTIC)
2) Calculate net income using a 23% net profit margin
3) Divide by the number of shares outstanding to get EPS for the quarter
4) Multiply estimated EPS for the quarter by 4
5) Divide the share price by the number obtained in 4)
6) If the number obtained in 5) is less than 8, you should buy the stock with confidence. If not, you should pass it.

How does this sound? Let me know of your findings. Thanks

[WallStreetnBio]

10 minute video only for tomorrow because I'm still doing GTW and ONT today. TGC is trading just $34 K today, so it's a low volume stock, with $43 M market cap, that's why it can fly so much over the short term.

I have 5 cents EPS over the last 12 month period, so the stock is trading at $0.74/$0.05 = 14.8 times trailing earnings.

Net profit margin over Q3 2006 was very high at 23%, and that also explains why the stock can move so much, just a bit of revenue expansion and 23% of it go to the bottom line.

The numbers you got for the number of barrels are interesting. I don't have time now, but if you could answer the following questions, you would see if the trade is right or not:

1) How many barrels sold over the last quarter period and at what price (check the oil price at at stockcharts.com, symbol is $WTIC)
2) Calculate net income using a 23% net profit margin
3) Divide by the number of shares outstanding to get EPS for the quarter
4) Multiply estimated EPS for the quarter by 4
5) Divide the share price by the number obtained in 4)
6) If the number obtained in 5) is less than 8, you should buy the stock with confidence. If not, you should pass it.

How does this sound? Let me know of your findings. Thanks

ahh i wish i had time as well. i have to go to class then meet with a real estate agent. can anyone else do it? see you later guys.

[lancefur]

10 minute video only for tomorrow because I'm still doing GTW and ONT today. TGC is trading just $34 K today, so it's a low volume stock, with $43 M market cap, that's why it can fly so much over the short term.

I have 5 cents EPS over the last 12 month period, so the stock is trading at $0.74/$0.05 = 14.8 times trailing earnings.

Net profit margin over Q3 2006 was very high at 23%, and that also explains why the stock can move so much, just a bit of revenue expansion and 23% of it go to the bottom line.

The numbers you got for the number of barrels are interesting. I don't have time now, but if you could answer the following questions, you would see if the trade is right or not:

1) How many barrels sold over the last quarter period and at what price (check the oil price at at stockcharts.com, symbol is $WTIC)
2) Calculate net income using a 23% net profit margin
3) Divide by the number of shares outstanding to get EPS for the quarter
4) Multiply estimated EPS for the quarter by 4
5) Divide the share price by the number obtained in 4)
6) If the number obtained in 5) is less than 8, you should buy the stock with confidence. If not, you should pass it.

How does this sound? Let me know of your findings. Thanks

Yes prodigy, please let us know. I would love to be on board for this one.

[David Randolph]

ahh i wish i had time as well. i have to go to class then meet with a real estate agent. can anyone else do it? see you later guys.

Ok, let me see what I can do. Where did you get those production numbers prodigykid6, I don't have them on my news service or in Yahoo?

You already got us the October (17,659) and November (21,174) numbers, do you have December?

[David Randolph]

ahh i wish i had time as well. i have to go to class then meet with a real estate agent. can anyone else do it? see you later guys.

Ok, let me see what I can do. Where did you get those production numbers prodigykid6, I don't have them on my news service or in Yahoo?

You already got us the October (17,659) and November (21,174) numbers, do you have December?

Ok, let's be optimistic and consider 21,000 for December. This gives us about 60,000 barrels of oil produced in calendar Q4 2006. Over that period the average price per barrel was about $60. This gives me $3.6 M in revenues for the quarter. At a 23% net profit margin this gives me $828,000 in net income which translates to $0.14 EPS for the quarter if the share count remained the same as in Q3, which was 58,981,017 shares (but TGC is a "diluter", check here: http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?Symbol=tgc&lstStatement=10YearSummary&stmtView=Ann

$0.14*4 quarters = $0.56. $0.75/$0.56 = 1.34, certainly less than 8.

Yes, I guess you're right prodigykid6, there's enough material here for a short term speculative buy, even though I don't recommend short term speculative trading.

Good luck

[lancefur]

Dave you guys should buy TGC. Tengasco, Inc. engages in the exploration, production, and transportation of oil and natural gas in Kansas and Tennessee. I'm expecting earnings to come out after the bell today. Last year on 3/20/06 TGC went from .75 to $2.00 on the earnings release.

They have higher revenue in the first 3 quarters of 07 than all of 06 so this 4th quarter is just icing on the cake. Here is the increase of production;

Year-Month Barrels(Oil)
2003-01     10,396
2003-02     10,016
2003-03     10,762
2003-04     11,025
2003-05     12,174
2003-06     12,025
2003-07     12,662
2003-08     11,160
2003-09     10,175
2003-10     11,048
2003-11     8,193
2003-12     9,731
2004-01     11,181
2004-02     10,554
2004-03     10,890
2004-04     10,567
2004-05     10,083
2004-06     11,029
2004-07     10,528
2004-08     10,117
2004-09     10,801
2004-10     11,975
2004-11     10,195
2004-12     11,457
2005-01     10,048
2005-02     10,281
2005-03     10,272
2005-04     10,924
2005-05     8,960
2005-06     11,366
2005-07     15,160
2005-08     14,071
2005-09     11,109
2005-10     12,971
2005-11     13,972
2005-12     16,463
2006-01     14,912
2006-02     13,309
2006-03     15,144
2006-04     14,919
2006-05     15,242
2006-06     18,410
2006-07     15,462
2006-08     16,350
2006-09     17,731
2006-10     17,659
2006-11     21,174  

Percent change in production versus same month in 2005 (similar to comparing Q1 to Q1):

2006-01  14,912   48.4%
2006-02  13,309   29.5%
2006-03  15,144   47.4%
2006-04  14,919   36.6%
2006-05  15,242   70.1%
2006-06  18,410   62.0%
2006-07  15,462   2.0%
2006-08  16,350   16.2%
2006-09  17,731   59.6%
2006-10  17,657   36.1%
2006-11  21,174   52%

This link explains the operations and production

The latest insider information for the month of January shows 36,000 shares purchased and 6,100 shares sold.

Can you do a 10 minute video Dave...pretty pretty please 

Earnings out after the bell? Is that a good thing or a bad thing?

I would like to get a nice short term bounce here and buy before the close. However, when buying right before an earnings release, and one announced after hours, isn't that more often than not a sign of a lower than expected results release?  Any opinions?

[bourbonstreet_crawdaddy]

Hello David,

I hope that you are having a fantastic day, I know that I am - ASTI and SILC are having a great week too! 

If you get a chance, I would like you to take a look at OPBL.ob. I believe that the Revenue growth and Net Profit margins here are sweet, and that the stock may be in a nice spot for a run to $12-15 per share.

What are your thoughts about OPBL.ob?

Thanks for your thoughts and Great Work!

Bourbon   

[David Randolph]

Earnings out after the bell? Is that a good thing or a bad thing?

Prodigykid said earnings will be out after the close, but I don't know where he got the information, I didn't find anything on the subject. Well, it's good if earnings are good, it's bad if earnings are bad. Without the earnings release there's no catalyst to move it one way or the other, volume is low and the chart is dead.

However, when buying right before an earnings release, and one announced after hours, isn't that more often than not a sign of a lower than expected results release?  Any opinions?

I'm not sure I understood the question lancefur, but I don't think there's a correlation between the hour earnings are released and how good or bad they are.

[wisebuys]

What's your opinion of WFR?  Looks like they could be a good investment with our bet in solar's future

http://www.thestreet.com/_yahoo/markets/activetraderupdate/10345504_2.html

Thanks for your input.