ICOC

[Garoh]

Aren't you happy, Garoh, that you haven't sold?!  I hope in time we'll be able to say the same about NVTL.

berloga No I didn't sell 

I said if it close below 9.50 I would sell it and the next day the trading was interesting and decided to keep it for the earning release 
The closing price is 10.96 and ... but the lasy minute was weird it jumped to 11.48 but tanked to less than 10.50 

[pinoleropuro]

I don't own this one but I wish I did.
on Dow Theory this one has an overall score of 91
so I'd say this one is pretty solid to hold for the long term.

[David Randolph]

David

What's this ??

Thursday , July 05, 2007 15:30ET

According to the NASDAQ Dividend List, ICO, Inc. (NasdaqNM: ICOCZ) are expected to go ex-dividend on July 06, 2007. This $0.421875 cash dividend was originally declared on May 02, 2007.

  DECL-DATE          X-DATE        REC-DATE        PAY-DATE
-----------     -----------     -----------     -----------
05/02/2007      07/06/2007      06/22/2007      07/02/2007

AMOUNT:    $0.421875 cash (USD)
FREQUENCY: N/A
CHANGE:    N/A

David Do you remember this ?
Do you think it had any effect on the share price ??
Because I see a week after the paying date which July 2 , the stock started to turn from bullish to bearish 

Yeah, I guess that ICOCZ stuff are the preferred shares which can be traded. There are 194,147 preferred shares outstanding.

I've listened to the conference call, and management is very enthusiastic about the current business conditions and the future. Here are a few highlights:

- Growth in Australasian volumes was 100% from the year ago levels and up 35% from the prior quarter;
- Gross margin was 18.1%, but management believes there's ample opportunity for improvement here. The CEO said he is a "margin fanatic";
- The $1.2 M payment of the preferred dividends won't have an impact on EPS, just in the balance sheet, because those dividends were already accounted for in the past.
- On a question about seasonality, which was very deep in 2006 and made the stock fall 36% from top to bottom in the 2nd half of 2006, management said it is a "one month issue", it's just that most Europeans take vacations in August and business in Europe slows dramatically. Anyway, I think the 2006 2nd half reduction in EPS had more to do with the Resin prices falling 30% over that period than the normal European seasonality. That's not happening this time, as  resin prices have been steadily moving higher.

Generally I enjoyed the conference call.

Now let's compare the actual results with my valuation model estimates:



- I had a 2% dilution factor. This quarter the share count increased from 25,998,614 to 26,238,904, that is, 0.92%. This gives me about 4% dilution factor per year, so I'll increase my estimate to 1.04.

- I had revenue CAGR of 15%. Revenue growth from the 2006 fiscal 3rd quarter was 38%. I'm going to increase my revenue CAGR estimate to 25%.

- I have 7% as my final net profit margin estimate. In this quarter net profit margin was 4.88%. I'm going to maintain my 7% estimate because the CEO said there's ample room for improvement in gross margin, so I'll expect some margin expansion over the years.

- I had an EPS multiple estimate of 20.46. But lately the general market was off a lot and the Synthetics industry is now being valued at 18.14 times earnings. I'll adjust this estimate.

After all these changes I get the following results:



The stock is a bit more attractive now. I enjoy the fact that ICOC is a global business which derives 76% of its sales from outside of the United States.

Management is doing a great job, I'll continue holding ICOC for the long term.

[berloga]

I believe ICOC sells off because violent market jitters push investors to collect profit on their winning holdings. Perhaps that's why NVTL also pulls back sharply. JMHO.

[lancefur]

Man, sometimes these investors just drive you crazy with the big sell off. Why can't everyone have the long term perspective on such an amazing stock and an amazing business model? This drop kinda hurt a bit. 

[David Randolph]

I believe ICOC sells off because violent market jitters push investors to collect profit on their winning holdings. Perhaps that's why NVTL also pulls back sharply. JMHO.

Yes, earnings and prospects are great, however there were too many short term profits to take to offset losses elsewhere. Technically there was a gap to close just beneath, which was closed yesterday.

Let's see what the next few days bring, I'll keep holding ICOC, even though I recognize the damn chart may speak louder over the short term.

[Garoh]

Well closing below 9.50 again is not a good thing at all 

I'm out yesterday at 10.45
will wait for good signs even though I buy it higher ..

[David Randolph]

Well closing below 9.50 again is not a good thing at all 

I'm out yesterday at 10.45
will wait for good signs even though I buy it higher ..

Hi Garoh, we got $10.08 on Friday's close, let's see what the next few days bring.

Analysts have been raising EPS estimates for ICOC, but I think they're still well below where they should be:



They're still calling for $0.63 EPS for the full year of 2007, but the company already made EPS of $0.54 ($0.49 from continuing operations) in the first half of the year. If the second half resembles the first half - I know there's seasonality, but because resin prices are moving higher - the company will have 2007 EPS of roughly $1.

I'll continue holding ICOC for the long term.

[Garoh]

Well closing below 9.50 again is not a good thing at all 

I'm out yesterday at 10.45
will wait for good signs even though I buy it higher ..

Hi Garoh, we got $10.08 on Friday's close, let's see what the next few days bring.

Analysts have been raising EPS estimates for ICOC, but I think they're still well below where they should be:



They're still calling for $0.63 EPS for the full year of 2007, but the company already made EPS of $0.54 ($0.49 from continuing operations) in the first half of the year. If the second half resembles the first half - I know there's seasonality, but because resin prices are moving higher - the company will have 2007 EPS of roughly $1.

I'll continue holding ICOC for the long term.

Yes David nice close ... I back in at $9.20 ..
I will wait until monday to see if tghe market calm down becuase the chart is still kind of bearish here ..

We need a close above 10.50 and I hope it will make on  monday 

[David Randolph]

Resin prices continue to climb, which produces a positive environment for ICOC's operations. Because of this I don't expect the 2nd half downturn in revenue and earnings to be nearly as severe as it happened in 2006. The 2nd half may even be better than the first half, and if that's the case ICOC will rise a lot between now and the end of the year.

I'll keep holding ICOC.

[pinoleropuro]

Dow Theory Quadrix by ticker over all ranking is 88. It is above 80 so the long term outlook is very good.
these are the other scores.
overall                    88
Momemtum           84
Value                      56
Quality Score          82
Financial Strength    56
Earnings estimate    61
Performance           99
Volume metrics       84

the top three are now
GIGM                   99 overall
NGA                     99 overall
ICOC                   88 overall

Aladin                  85 overall came in 4th
JAKK                    84 overall came in 5th
NVTL                   80 overall came in 6th

the rest of them are under 80. doesn't mean much I guess in the sense that they(dow theory) are strickly long term.
but you have been able to find explosive stocks so I am sure eventually they will make it to the rankings also.

[pinoleropuro]

I just realized that the scoring changes on a daily basis it seems depending on what exactly I don't know.
top rankings                  Aug 8th                 today
NGA                              99                         99
GIGM                            98                         99
JAKK                             92                         84
ICOC                            91                         88
ALDN                            88                         85
NVTL                            78                         80
GSB                             71                          68
IMMR                           71                          76
SWIR                           75                          77
PFSW                           10                          08

[David Randolph]

I just realized that the scoring changes on a daily basis it seems depending on what exactly I don't know.

Hi pinoleropuro, it would be nice to know what's behind the scores. Probably the scores change on a daily basis because they're related to the stock price, as most fundamental metrics do.

ICOC even rose a bit, despite yesterday's general market meltdown. Polymer prices also rose, so ICOC's fundamentals are getting better by the day.

The 2nd half might be as strong as the first half, even though there's just a bit of negative seasonality due to the European vacations in August.

I'll continue holding ICOC for the long term.

[David Randolph]

ICOC went down 5.8% yesterday, it makes me sick, but I'll just patiently keep holding the stock.

[DragonAMG]

When will earnings be announced?