NSOM challenge:
1) AYSI of course my favorite because I have a good bead on this company IMO. I'll cut and paste cuz I want to put the info and don't want to type all night LOL with my 2 fingers (sorry to those up on AYSI) as to why I like it:
AYSI reported 4.3 cents EPS net income for the Q (and there should be another 1+ cents currency translation IMO on top of that). Plus revs went from about $1.9 mill revs in Q3 to $3.4 mill revs (I told people on here that they started a 2nd shift and hired a lot of new people- 16 total on the way I believe was what I was telling people back in July and they all arrived apparently so total about 30 production, now you see what that translated into and why even after this 'ran' a little to $0.65 it was still cheap IMO and still is cheap).
AYSI is still cheap IMO because the 2nd shift didn't start until after the Q4 started, so there was only a partial contribution by this shift. Plus they're working to get a 2nd mill commissioned down the road and I'll try and clarify that with Gene soon, so eventually as sales ramp the 2nd mill should be able to double revs output potentially with little expense eventually (and the 2nd mill should have improvements over the first mill IMO).
BUT near term in Q1 08 we'll get a full contribution from this 2nd shift:)
I think Q1 2008 should have EPS of 5-6 cents and revs of approx $3.8-$4 mill (because of Christmas holiday likely being downtime so reducing my actual revs #s by 10%, see below for my formula on figuring revs- thanx to clerrox for his part in that).
Gene mentioned they went from about 80% op efficiemcy in Q3 and prior Qs to about 100% in September with the new hires. So the $125K revs per production employee #cleverrox used previously for guessing revs (from previous Qs) I think will be worth using in Q1 08 at a higher level if headcount stays around 30 (cuz they won't have hired on people during the Q which would mess up the formula).
Considering the prelim #s for Q4 07 and taking into account the arrival of I believe 10 people later in the Q (say beginning of August) plus the 6 that came in right around beginning of Q4, I am guessing they can do about $140-$145K per production employee (using a slightly conservative 15% measure of Gene's mentioned 20% increase in op efficiency) as long as they don't bring in more new hires.
So if they have 30 people (and 10% off revs production for Christmas holiday) then we get revs for Q1 08 of
approx $3.8 mill-$3.9 mill for 30 people
and if 31 people we get $3.9 mill-$4.0 mill approx
Take into account some margin pressure likely from new hires in Q4 07 and we get say 50% GMs for Q4 then I would think 52% for Q1 08 reasonable.
So $3.8 mill(52%)= about $2 mill - SG&A of about $0.67 mill= about $1.33 mill op income and about $0.89 mill net income (assuming 33% tax rate).
That's about 5.2 cents on the lower end using the lower end of my #s. The upper end if we say go to 55% GMs and 31 people production then it is
$4 mill(55%)= $2.2 mill- $0.68 mill SG&A= $1.5 mill approx op income and $1.02 mill net income (assuming 33% rate)
that's about 6 cents EPS on the higher end.
So my projections of 5-6 cents EPS for Q1 08 stand as long as we have 30-31 head count... And those #s should be out during the contest yippee in February (finally LOL).
AYSI has had SIX straight sequential revs growth Qs, and amazingly this growth almost seems to be accelerating instead of slowing:) Can't keep it up forever, but I think they can do 100%+ YOY revs growth in 2008 on top of their 100%+ revs growth for 2007. And 2009 IMO should see healthy growth too if things continue as they look. Here's a simple recap of Qs revs growth recently:
2006
Q1 $0.980 million
Q2 $0.682 million
Q3 $0.796 million
Q4 $0.928 million
2007
Q1 $1.658 million
Q2 $1.754 million
Q3 $1.884 million
Q4 $3.4 million (prelim approx)
In fact, Q4 2007 alone had about as much revs as ALL of 2006!
And prelim net income (should be fully taxed) for Q4 2007 is MORE than the first 3 Qs of 2007.
So IMO intrinsic value should be much higher (triple digit revs growth w/o debt or acquiring, triple/quadruple YOY digit earnings growth, sequential growth continuing in a big way).
Now you guys know why I'm so excited about the company.
And the CEO is still very optimistic about 2008 and beyond so I don't think the strength is going to wane anytime soon.
*** Some intrinsic value logic***:
Intrinsic value selling points-
Been doing the same thing for years so this isn't some scammy operation like some other VMC companies IMO.
Hard to find companies LT debt almost zero.
NO Dilution in their history.
Growing at OVER 100% revs annually (and net income much more).
Fwd PE well under 10.
No AR probs (they turn inventories and ARs like crazy for a mnfctrr) .
The company's Arcoplate product has little exposure IMO internationally and if it starts to gain traction outside Australia the growth could be tremendous over the next few years.
Continued strong outlook (per an E-Mail with CEO where he mentioned the outlook barring unforeseen events looks very bright).
Highly profitable now and looking to stay that way (net income increased over 1000% from last year's Q4).
Patented process with the product just catching on due to using word of mouth sales strategy IMO.
Serving hot area of the market, providing wear plates to mining industry and specifically the very hot iron ore market in Western Australia/the Pilbara.
6 straight sequential revs growth Qs (and likely 7th on the way).
Expansion to 2nd mill will cost little cuz can fit in current facility so should be able to ramp revs up to approx $8 mill per Q w/o taking on debt or diluting!
Management has lent the company money with no strings attached at 0% and 1% (CEO) and has delayed payments to themselves for their work in part to avoid taking on LT debt. So I trust them to watch the bank so-to-speak.
There are NO institutional holders and IMO almost NOBODY follows this company (yet) :) So we're getting in on the ground floor IMO ahead of the smart guys and bigs on wallstreet (but time may be running out, this one is likely to start drawing some eyes soon hitting new multiyear highs on volume even as a tiny market cap BB listed company, still a long ways to go though IMO with its intrinsic value IMO much much higher than current levels).
The bigger fish are gonna start sniffing around this one after Q1 08 gets reported IMO if they do what I think they will (5-6 cents EPS).
OK LOL, sorry about my excessive (and likely obsessive) dribble on AYSI!
#2) ZYNX I'll leave mostly to others. Their sales ramp is impressive and the recent drop is attributable to holidays and moving. It'll be interesting to see what they can do for January sales #s.
3) CNEH- it is China so I'll never bet big. But I like the story, the production, the fact northenrlights has met with mgnmnt FWIW.
4) GVSS- thay have some nice momentum going but I personally think they're a bit expensive for the amount of revs they're generating... However, they should have a solid Q coming (much like TCCO probably).
5)cash- just wanting to see if I can find something that takes a dip but has good prospects (like maybe TCCO LOL).
6) PHLI- it has been beaten up good and for good reason IMO. CSAB has probably likely taken big steps to cut spending on ads for Accelerade. Satiatrim was overproduced and undermarketed so a big writedown last Q (but that's out of the way now). New mngmnt will cost $ near term and hurt results (but they have enough cash up front to not worry about this). The get to know session will be interetsing to hear on Feb 12 and I plan on listening to that and maybe asking a Q or two myself. I'm looking for a bounce in this one and think the powder/gel sales for Accel and brand name alone should be worth what the company is selling for these days on market cap side. Could be rough short term but the intermediate term if these new guys do anything for sales should help get this off the mat.
I don't mind stealing bread from the mouths of decadence... But I can't feed on the powerless when my cup's already overfilled.
-Temple of the Dog
"We didn't build this company on the sniff of an oily rag."
-Anonymous
