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Hweb, I'm with you on CPSS. Just added some more at 6.50 also. Looks like there should be some solid support between 5.80 - 6.30. Would be very surprised if it traded down there, but who knows? Lots of fear and panic selling in the market, esp among the momentum stocks.
Maybe that heavy selling of last year's darlings is putting a bit of a pall over everything.
Joined you guys today in GV, picking up some in the low 2.20s. There was quite a big seller at the end of the trading day. Where did he come from?
Seemed like it was Murphy's law for GV in FY13. They should do much better in FY14, even if you exclude the impact of the new acquisition. (BTW - Did they file an 8K yet on C&C's financials?)
I think the consensus on the board is that this stock should be trading in the mid 3s, and I agree with that.
Took a quick peek here. Saw one thing that reminded me of some toxic converts I've seen in the past but thought they were outlawed:
Financing by Asher Enterprises, Inc.
On August 21, 2013, September 26, 2013 and October 22, 2013, the Company entered into three securities purchase agreements with Asher Enterprises, Inc. (“Asher Enterprises”) pursuant to which the Company sold and issued to Asher Enterprises three promissory notes with an aggregate principal amount of $133,000 (the “Notes”). The Notes each have a nine-month term and compound annually and accrue at 8% per annum from the issue date through the maturity date or upon acceleration or prepayment. The holder is entitled to convert any portion of the outstanding and unpaid amount at any time on or after 180 days following the issuance date into the Company’s common stock, par value, $0.001 per share, at an initial conversation price equal to 61% of the average of the three (3) lowest closing bid price for the Company’s common stock, during the ten (10) trading days ending on the latest trading day prior to the date a conversion notice delivered to the Company by the holder. See more details of the Notes under Item 5 of Part II of this report.
You've got to be pretty desperate to sign on to this type of financing.
There is one red flag on CCNI that I would point out after quickly reading the 10K:
NOTE 11 – SUBSEQUENT EVENTS
In March 2014 we received notice that a non-management owner has elected to exercise 4.2 million warrants with a strike price of $0.08 per share. These shares have not been issued as of the date of the release of these financial statements, but we anticipate they will be issued in the near future.
----------------
That's a TON of low priced shares that could weigh heavily if the warrant exerciser decides he needs to raise some cash.
I own ESV. The selloff in the offshore oil rig market is due to slackening demand from the major oil companies combined with increasing supply of new rigs coming into the market. In a cyclical industry, investors often shoot first and ask questions later.
Another one to look at is NE, which trades nearly 20% below tangible book value, and has earnings growth expected. Decent yield too!
I like both ESV and NE, but I'm under water in both. I'm likely to be adding to both positions if they keep falling like this....I think you have to be willing to wait 1-2 yrs before the sentiment turns around. Its horrid right now in the sector.
There was a one-time gain that positively impacted OVTI's last quarter. Exclude that and I don't think they beat the estimates (TBF I don't know what the expected tax rate was).
The other thing that is concerning is that growth is slowing, and next FY is expected to be down y/y for both earnings and revenues.
I don't see any reason to chase it here. Could settle in at 13-14/share which is 10x earnings estimates for FY15.
UVE....don't forget about the Florida regulators.
They buried this little tidbit in their 10K about a premium decrease coming:
In late 2013, the Company secured approval for an overall rate decrease for homeowners in the amount of 2.4%, effective in early 2014. In addition, an increase in the average dwelling fire rates of 8.1% also became effective in early 2014.
Didn't exactly trumpet that, did they? Also, they want to expand to other states....but my guess is that they will have to do a capital raise like UIHC did recently to fully fund that effort.
I'm wary of owning the shares here. I think the best of the earnings news has been priced in and I'd be a seller. I don't currently hold any shares of UVE.
Yes, although the revenue estimates are not right. CPSS had 255.6MM in revenues in FY13 (245MM if you back out the one time gain on debt cancellation). Yahoo Finance has last year (FY13) revenue as being 173.15MM, which is clearly wrong.
I think a better estimate is around 315 - 320MM for FY14 revenues.
Wade, the updated earnings estimates are out on CPSS and they have been cut a bit. I think that is a recognition of the reality that CPSS is in a phase of their credit cycle where they will be facing greater delinquencies and charge offs. It should not come as a surprise, but I don't think they'll be able to hit 1.00+/share in eps this year.
Now, if they do a HUGE amount of new business in Q1 and Q2, then those will change the "mix" of debt and could improve the charge-off ratios as a percent of the total portfolio.
Other factors that are improving (and should continue to this year) is the cost of capital continues to drop....but this benefit hasn't outpaced the recent increases in charge-offs, thus the drop in forward eps estimates.
I still think there is enough growth y/y and into FY15 to warrant a 10x multiple, but I'm forced to concede that the FV range has moved down after considering the Q4 numbers.
I am still holding as I think this drop in price is an overly pessimistic view of the fundamentals here. As R59 also pointed out, there could be a threat of LL selling too, and that may also be weighing on the stock. Not going to add here unless it drops back down into the 6s again.
Sskillz, you are correct to point out that CPSS benefited from a reversal of the contingent liability provision in Q4. However, to be consistent, one should also back out the previous provisions too given the reason for it:
Provision for Contingent Liabilities
During the nine months ended September 30, 2013, we recognized $9.7 million in contingent liability expenses to either record or increase the amounts we believe we may incur related to various pending litigation. The amount was allocated in part to a long running case we refer to as the Stanwich litigation, and also to more recent matters including two California class action suits where we are the defendant, and a governmental inquiry, in which the United States Federal Trade Commission (“FTC”) has informally proposed that the we refrain from certain allegedly unfair trade practices, and make restitutionary payments into a consumer relief fund.
---------------------------
On a non-GAAP basis, backing out the full year provision and then taxing it at 43% rate, I get the TTM adjusted earnings of 0.81.
I think the FY estimate range seems fair. Attaching a 10x multiple to that is a decent price target. You may not like the business model, but I think its a good bet for the stock to hit the 10s later this year....so I'm still long and holding for that. Risk-reward not as good as it was in the 6s (obviously) but still like the potential gains on the table.
CPSS and seasonality. This was addressed on the last CC Q3 FY13. Transcript here from Seeking Alpha:
Our next question is from Kyle Joseph of Stephens.
Kyle M. Joseph - JMP Securities LLC, Research Division
I wanted to touch base on originations. The Q-on-Q originations pacing, the slow down a little bit in the third quarter? I just wanted to get your thoughts. Are you guys still comfortable getting up to that $100 million a month level and was there some seasonality there?
Charles E. Bradley - Chairman, Chief Executive Officer and President
There's certainly a little seasonality there, as I mentioned. Usually, you grow from late January until sort of end of May and then you sort of try to hang on. And sometimes, you can pick a little growth in September, October and then you drop off a little bit, November, December. So in some ways, it's almost very predictably -- predictable, in a sort of seasonality point of view. Having said that, as long as the economy overall doesn't have some weird thing happen in terms of the government doing this, that and the other thing, we would expect a lot of substantial growth in that first quarter and that will tell the tale on whether we hit the 100-plus kind of monthly origination run rate next year. Where we sit today, given that we were busily hiring and training marketing folks and staffing up originations and collections to handle it, certainly, our projection or our thought is that we will get there.
--------------------
First quarter will be a big tell for the year. I think its more relevant to look at y/y comps rather than sequential, given the business and seasonality. Yes growth in topline will slow, but should still be quite strong. Here are some key stats to note and monitor going forward:
Operating and Performance Data ($ in millions)
At and for the At and for the
Three months ended Twelve months ended
December 31, December 31,
2013 2012 2013 2012
Contracts purchased $ 173.41 $150.83 $ 764.09 $ 551.74
Contracts securitized 185.37 156.70 759.59 594.60
Total managed portfolio $ 1,231.42 $ 897.58 $ 1,231.42 $ 897.58
A whole lot of fast money is coming out of the market today. I think we (the long-term VMers) were all expecting to see a correction after the run-up of last year, esp in the face of declining earnings estimates for 2014. Gotta love "PE expansion".....when your stocks are benefiting. It was simply too good to last.
I'd rather be a buyer of cheap, decent quality stocks on panic days then have to feel like I'm constantly chasing, which is the way it seemed to feel last year.
Looks like BELFB wants to fill the gap in its chart back on 10/30. High of the previous day was 18.38....I've been nibbling on BELFB today as well, but have most of buys around the 18.40 level.
Ah, I see what you are doing now. I read what you wrote too quickly!
Swick, I agree with you about the importance of using EV/EBITDA multiples when looking at relative valuations, but I think you have one part backward:
So one would subtract debt from enterprise value, because it is the debtholder’s claim on the business. You would add cash on the company’s balance sheet, because it is a non-operating asset and is not generating earnings that are included in EBITDA.
Its actually the opposite. EV = market cap + debt - cash.
http://www.investopedia.com/terms/e/enterprisevalue.asp
EV/EBITDA values are sometimes better than straight PE because of non-cash expenses that can hurt GAAP earnings results of companies that use stock options, acquire intangible assets, or require lots of plant and equipment and must depreciate those assets.
NE (Noble Drilling) got whacked today because they are seeing a softness in pricing for their offshore rigs. They are transitioning toward the more advanced rigs that have a higher dayrate and have generally held up better than other offshore rigs. I guess this is a bit of a hiccup, but many investors are choosing to shoot first today.
Its now trading around 33; tangible BV is around 34.60/share. Earnings growth will probably slow a bit; it will be interesting to see what the FY14 eps numbers will be after the dust settles. Stock now trades at less than 8x FY14 estimates, but those are sure to come down a bit after the call today.
Dividend of 1/share (Yld around 3%).
Here's the key language from today's PR that sparked the selling:
Outlook
Williams closed by stating, "After the very robust pace of offshore activity over the past four years, our industry may be entering a short and arguably useful pause in the cycle. As was the case in 2013, we entered this year with considerable backlog. That said, although we believe activity in the jackup sector is best defined as a steady state, the reality is that we find ourselves evaluating fewer floating rig contract opportunities today than we did a year ago. We expect to have additional contract opportunities under review as the year progresses, but it is increasingly clear that the first half of 2014 is likely to be characterized by lower rig utilization. The lower utilization is likely to be more pronounced for the floating rigs with limited technical features. Noble's exposure to a weaker floating rig sector is limited in 2014, with only 22 percent of our operating days available."
We are confident about the long-term outlook for offshore drilling and remain committed to a capital allocation strategy that promotes disciplined growth with strong returns and strategic appeal while offering the flexibility to consider other actions that promote enhanced shareholder value. In the ultra-deepwater segment, which represents a growing portion of our revenue, we continue to observe a fundamentally sound business. In the face of generally steady crude oil prices, successful exploration programs with over 240 announced deepwater discoveries since 2008, continued geographic expansion and a building backlog of field development projects, the segment is poised to provide exceptional future growth opportunities. Our transformation to a company with a predominately premium asset fleet positions Noble to successfully address the future opportunities in ultra-deepwater and high-specification jackup drilling applications."
LT trading patterns seem to indicate that NE usually bottoms in the high 28s and tops out in the 40s. Could be another time to enter; it hasn't traded this far below book value in a long time.
I'd be cautious with this one. Those proforma numbers include a big tax benefit that inflates the final eps number. Without it, it appears that operating income is declining. Perhaps there are some one-times or non-cash charges in there that might explain this, but it seems like people are focusing on the bottom line improvements which are low quality (tax benefits) and will be running out in the next year. Tax rates in Israel are typically 20-25%.
I also don't like the investment bank that ran this deal - Aegis. A lot of the old Rodman and Renshaw people were absorbed by them. They probably placed the shares with a bunch of quick traders who are happy to dump them at a quick 15-20% profit.
That is why its trading so "heavy" today.
If the chart is accurate, then the avg return for the next 10 years will be ~6%/yr. Is that better than other asset classes assumed returns? Given the state of real estate, bonds, commodities, etc....I'd say yes. I don't see this chart as a reason to "run for the hills" now but if we get back up to historical highs then its time to re-assess and go more to cash.
I tend to look at stocks on a bottoms up basis, so this chart, while interesting on a macro basis, doesn't really help much there. Just gives me an indication of whether the investing climate is in a tail wind or head wind mode. Looks to be in the "slight" head-wind category to me now.
An interesting LT study of investor behavior and its predictive value for subsequent 10 year returns.
http://philosophicaleconomics.wordpress.com/2013/12/20/the-single-greatest-predictor-of-future-stock-market-returns/
Kinda reinforces what we all know intuitively, which is that the single best moment to buy is when things look their worst. I would qualify this statement to say that is probably true for market indexes, but not necessarily for individual stocks.
Hat tip: http://abnormalreturns.com/
This is a status quo report....nothing much to change the outlook based on Moody's.
What I did note is that CPSS had a successful auction of their asset-backed securities in the secondary market:
http://finance.yahoo.com/news/cps-announces-183-million-senior-171500311.html
Weighted avg interest rate: 2.82
Weighted time to maturity: 1.8 yrs
This compares favorably to the last securitization they did in September:
http://finance.yahoo.com/news/cps-announces-205-million-senior-160000369.html
Weighted avg interest rate: 3.08%
Weighted time to maturity: 1.87 years.
------------------
Bottom line: recent trends and upcoming refinances will continue to bolster CPSS' pretax margins
Anyone following the AFSI saga? Its a great battle between shorts who doubt the accounting and LT health of the insurance company vs company insiders who have used the decline to load up.
Short interest had been pretty high before all this but the stock had marched forward steadily during 2013. Then GeoInvesting launched this strike about 8 days ago....
http://seekingalpha.com/article/1894851-amtrust-financial-services-a-house-of-cards
....claiming a complicated series of offshore entities were enabling the company to hide big losses in its insurance business and disparaging a few other lines of their business, including lifetime settlements.
Then noted short seller John Hempton of Bronte Capital hit back with this salvo that was very critical of Geo:
http://brontecapital.blogspot.com/2013/12/the-amtrust-hit-piece-amateur-hour.html
...which prompted Geo to fire back with this:
http://seekingalpha.com/article/1900381-geoinvesting-responds-to-bronte-capital-on-amtrust
The company's response to Geo's original thesis:
http://seekingalpha.com/article/1902871-amtrust-financial-services-inc-management-provides-a-response-to-recent-stock-activity-transcript
...and some HUGE purchases of stock by the two largest shareholders:
http://finance.yahoo.com/q/it?s=AFSI+Insider+Transactions
When the stock dropped below 29 I started nibbling; I also bought some of the preferreds at 18.50/sh which have a yield of just over 9%. Keeping things small out of respect for Geo's work, but the insider buying is too big to ignore, plus I like Bronte Capital too.
Thanks Cliffvb. Sounds like a pretty good deal. Does Merrill charge any wrap fee? Any other fine print?
OT: Zero commission broker to go live in Jan 2014. Might be something to keep an eye given how many trades most of us make here in one year.
https://www.robinhood.io/
Of course, there have been a number of zero commission brokers in the past who eventually had to throw in the towel and start charging per trade. Maybe they'll be able to make it, but its a tough road.
Sean Downes (CEO) of UVE sells about 50k shares in the low 12s.
Still holds 1.67MM shares. I'd have done the same thing, so I can't fault him for locking in some of these gains.
No position in UVE at present.
Wade, I think the catalysts are in place for CPSS to have a nice run back up to its old highs in the 10-12 region. Investors and traders will look more at the growth in eps, rather than concerns about what might or might not happen in 2015. They've got some easy comps coming up, and with the unemployment rate dropping, the chances of default go down. They will also get to pay off some of their high interest Levine Lichtmann debt, which will further increase their spreads in 2014 v 2013.
No company or stock is perfect, you have to decide which elements or catalysts are most important to the individual stock's performance and place your bet accordingly.
Nelson, one to look at for your collection is IRDM. I'm nibbling on it at 5.50 and below.
Management and the stock are in the penalty box for consistently missing quarterly estimates in 2013.
Perhaps the numbers have been lowered to a more reasonable level of expectations. Trades at 7.7x eps for TTM; FY14 eps of 0.90 shows strong growth over the current FY.
OT: The VIE structure of Chinese equities are a ticking time bomb. The situation outlined in this TRIT 8K filing highlights the considerable risks to a US investor who owns this type of stock:
http://www.sec.gov/Archives/edgar/data/1460801/000114420413066848/v362822_8k.htm
The situation with the company "chops" sounds very similar to what happened at CAST. The VIE works....until it doesn't.
Another comment on the subject:
http://www.chinaaccountingblog.com/weblog/fu-shows-vie-risk.html
http://www.chinaaccountingblog.com/weblog/are-vies-a-going-concern.html
Caveat emptor.
Thanks R59. That was my thinking too. I don't know how else to think about the rule since it clearly states that a disallowed loss is simply deferred not lost forever.
Quote:
"If your loss was disallowed because of the wash sale rules, add the disallowed loss to the cost of the new stock or securities (except in (4) above). The result is your basis in the new stock or securities. This adjustment postpones the loss deduction until the disposition of the new stock or securities. Your holding period for the new stock or securities includes the holding period of the stock or securities sold."
As I no longer hold the stock, and never repurchased it, the loss should still be allowed.
I'll have to get this confirmed by a tax accountant, but I figured someone here has run afoul of it before.
OTC, the wash sale rule is triggered by any purchase of the same security within 30 days before or after it is sold.
From the IRS:
http://www.irs.gov/publications/p550/ch04.html#en_US_2012_publink100010601
Wash Sales
You cannot deduct losses from sales or trades of stock or securities in a wash sale unless the loss was incurred in the ordinary course of your business as a dealer in stock or securities.
A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you:
Buy substantially identical stock or securities,
Acquire substantially identical stock or securities in a fully taxable trade,
Acquire a contract or option to buy substantially identical stock or securities, or
Acquire substantially identical stock for your individual retirement account (IRA) or Roth IRA.
If you sell stock and your spouse or a corporation you control buys substantially identical stock, you also have a wash sale.
If your loss was disallowed because of the wash sale rules, add the disallowed loss to the cost of the new stock or securities (except in (4) above). The result is your basis in the new stock or securities. This adjustment postpones the loss deduction until the disposition of the new stock or securities. Your holding period for the new stock or securities includes the holding period of the stock or securities sold.
Hi Nelson, yes this is coming from the broker's capital gain worksheet that they report to the IRS.
The transactions in question all occurred in the first quarter of 2013.
I can see how the sales in December would really complicate matters, but that isn't the issue in this case.
OT: Wash Sale Rules
Tax time again....ugh.
I'm sure some of you have come across this before, so perhaps you can help me understand why a capital loss is disallowed in the following situation:
I bought stock A on three separate occasions, averaging down each time. I accumulated 650 shares total. I sold the entire position in one day with a loss on each of the three blocks of shares. However, because the last purchase of 200 shares was within the 30 day window prior to the sale date, I have lost approx 30% of the capital loss due to a triggering of the wash sale rule.
At the end of the transaction I own zero shares of stock A. Is the disallowed capital loss permanent? If so, why? I was under the assumption that any disallowed losses via wash sales are added back to the cost basis of any shares that have been repurchased during the wash sale window. That assumes that you own shares at the END of all these transactions. What happens if you liquidated the entire position but your last set of purchases triggered the disallowed loss? Are you unable to use that disallowed loss in the calendar year you took it in? What could be done to "recapture" it?
Thanks!
Here is another one to add to your REIT list. Its a hotel REIT, with the symbol INN. (Price: 8.60; Current Yld: 5.23%
Trades at <9x 2014 adjusted FFO/sh. Book value is 9.70, so the stock currently trades at 89% of book.
Recent insider purchases:
http://finance.yahoo.com/q/it?s=INN+Insider+Transactions
I added some today at 8.60 and will continue to nibble looking for the stock to trade back up close to book value in the next 9-12 mos. Combined with the dividend, that could provide a 18-20% return.
The company did a pretty hefty secondary earlier this year which has weighed on qtrly FFO/sh comps. Should be through the worst of it by the end of the current quarter.
Hweb, on DRAD did management give any forecast of where they expect GM to be in the next year or so?
I hear you about the balance sheet cash, but if you want to use it in that way in determining EV, then the better divider is adjusted EBITDA....that's how an acquirer of the company would primarily view its relative cheapness.
YTD, I calculated DRAD's adjusted EBITDA (excluding changes in working capital and backing out the one time gains) as still negative. In Q3, they finally showed some positive EBITDA of roughly 1MM. Annualizing that would give you an EV/EBITDA ratio of approx 10x. Thats not too bad, but its not as cheap as you might think for having all that cash on its books.
I wish you all the best with it. If they can show more sustained top line growth I may get a bit more excited.
DRAD has only shown top line growth in its most recent quarter. I guess I'm just a bit skeptical that a 20x forward PE is warranted here. Using relative valuations is a quick way to get your head handed to you. If DRAD was able to grow their revs consistently at 15%+ then I'd be a little bit more likely to give them a higher valuation....but that is just my two cents.
I agree that the insider purchases are a positive, but I can't get too bullish on the small amount of purchases in the 4s. How does this constitute buying like crazy at 4.25?
Nov 13, 2013 CLIMACO JOHN M
Director
1,369 Direct Purchase at $4.37 per share. 5,982
Nov 12, 2013 CLIMACO JOHN M
Director
5,000 Direct Purchase at $4.28 per share. 21,400
Nov 11, 2013 CLIMACO JOHN M
Director
3,000 Direct Purchase at $4.23 per share. 12,690
================
The REAL significant buyer was Eberwein, who bought a ton of stock in the mid 2s. That, in hindsight, was a great time to buy the stock. Now, I think we are still in the "prove it" mode. The company did not give much details in terms of forecast.
Their bottom line was positively impacted by significant cuts in R&D, and to some degree GMs. I get that they don't need to spend much more in research, but cutting expenses to the bone will only help once.
Just to play devil's advocate on DRAD, why is it worth much more than 10-12x adjusted eps of 0.24 (0.06 in last quarter annualized).
I'd like to see more growth in the top line on a consistent basis before giving it much more than that modest forward valuation.
I guess the company will continue to buy back stock if it gets down into the mid 2s again. They can certain pay the 0.05/sh/qtr out of cash on hand.
Perhaps they will look to an accretive acquisition to boost both top line and eps?
The dividend is certainly attractive, but once its paid out, the stock is/was vulnerable in the short run. Perhaps that correction has largely run its course, but I don't believe it to be that undervalued based upon its current operations.
Hweb, I was checking this one out yesterday. You are correct that the company doesn't quantify what its NOL/valuation allowance is, so its hard to know what the GAAP tax rate will be for the company going forward.
In Q3, they had a pre-tax loss on a GAAP basis, so it was able to record a tax benefit. However, YTD through 9 mos, they reported a GAAP pretax inc of 3.7MM and recorded a GAAP tax expense of 1.6MM (44% rate).
I believe these tax expenses are non-cash, but you can see the difficulty inherent in coming up with a better estimate of adjusted fd earnings per share going forward.
The company should be recording the off balance sheet "valuation allowance" as a deferred tax asset, assuming they can meet the standard test of greater than 50% chance they will use most, if not all of the remaining NOL/allowance. That would result in a big non-cash benefit on the income statement, and then they would be recording tax payments going forward.
Also of note: there were a ton of shares issued as part of two secondary placements within the last 6-12 mos. The shares have been approved by the SEC, so can now be sold freely. This is probably weighing on the stock.
<snip>
11. Equity Transactions
Private Placements
In January 2013, the Company sold 4,000,000 shares of its common stock in a private placement at a price of $1.00 per share. Proceeds from the sale totaled $4,000,000.
In August 2013, the Company sold 5,000,000 shares of its common stock in a public offering at a price of $2.00 per share. Proceeds from the sale totaled $9,900,000, net investment banking fees.
The move down on UVE was more puzzling to me. I think this latest move up is simply correcting an overly pessimistic outlook for the company based upon past management's errors. The trial CC, moving investment management out of former CEOs control, hiring an IR firm, and moving to NYSE are all positive signs.
As R59 points out, even an 8x trailing valuation on eps will get this well into the 12s.
I'm not selling yet, although I'll be tempted to start scaling out if we get over 11 soon.
There is a lot of skepticism about the sustainability of their business model. The core of its model (and Conduit) is that they get less savvy computer users to download "stuff" that automatically loads a search toolbar on to their web browser. When users use the search feature of the toolbar and click on websites, the company gets paid for that referral.
The toolbar can often be difficult to remove, prompting many online complaints.
Google, Yahoo and other search providers have been taking steps toward stopping the practice but Perion, Conduit and others have been changing to adapt. Are they totally clean and honest about the toolbar loading? And shouldn't toolbar search revenues eventually drop off as people realize they don't have to get it installed?
Of note, AVG decided to move completely away from this toolbar based model and go to subscription payers for its decent anti-virus software. At least they have a good product! You can see the impact on AVG's growth as it transitions to this new model over the next year with analysts revising estimates downward.
In sum, PERI is cheap but I can understand why. Oh, and the company doesn't believe in buying back its own shares (stated on one of the last CCs). With a reverse merger approaching and millions of Conduit shares to be unlocked in the next year or so, there may some tough times still ahead for the stock. Of course, this could still move up 20-30% off these levels, but I think this stock is best for swing trading and not as a long term investment.
Get ready...looks like Al Little (aka Jon Carnes)is readying a few more short attack reports on US listed Chinese stocks he claims are frauds.
http://labemp.files.wordpress.com/2013/11/al-prepares-to-expose-more-chinese-frauds.pdf
I'm pretty surprised at how strong the outlook for the next quarter was for PERI, esp given the strong headwinds from changes in Google's toolbar policies cited by several other companies. It seems my caution was unwarranted.
I'm sure there are a lot of shorts leaning the wrong way right now....could be a pretty good day for PERI, barring anything unusual in the CC.
I still need to better understand their future business model with Conduit. Currently, PERI is very reliant on the search engines, whose frequent policy changes can often wreak havoc on forecasts.