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ALJJ - Hank, info came from quarterly reports. Operational CF in Q1 was +4.5 mil, and for 6 months was +3.1 mil. So Q2 was -$1.4 mil. I now see earnings from a year ago included an extraordinary gain so that is not a fair comparision. Earnings are well up without that and they should be with steel prices up so high now. Red flags go up when I look at any pinkie, especially with a balance sheet like this one has. If steel continues strong, it can dig out and do well. If not, watch out. Good luck.
http://www.pinksheets.com/pink/quote/quote.jsp?symbol=aljj
CNOA -Knife is falling on heavy volume again. Somebody is dumping, reminds me of UTVG awhile back. There also was an article out last night about shorting penny stocks after a big run up from a pump. Writer used CNOA as an example. I didn't think it was possible to short bulletin board stocks, at least not here in the US. Does anyone have a broker who allows it?
BTW, I did pick up some shares of CNOA today figuring the sell off is probably overdone, just as the recent run up was. Hoping I caught it by the handle, not the blade.
Here's the article:
http://biz.yahoo.com/tm/080513/17258.html?.v%3D1&quicken=2
ALJJ - Earnings for the quarter were down to 4c vs. 10c a year ago. Operational cash flow was also negative. Balance sheet is awful. Assuming it continues to earn at the rate it did last quarter, it will take 7 more years for stockholder's equity to turn positive for this pink sheeter.
Good luck, I think I'll pass.
CDS -Q1 earnings out of 21c fully diluted vs 15c one year ago. (After one time items related to stock offering they were -3c).
Company raised 2008 earning forecast to $26 mil from $24 mil.
Stock initially opened up on the news but has since sold off by about $1 to $8.90 range. Analysts had forecast 15c, and I presume that those were before one-time items. I continue to hold some shares as magnesium prices and outlook remains strong.
http://biz.yahoo.com/prnews/080508/clth051a.html?.v=1
CNEH having a good day today. Oil is strong but could also be related to new "seeking alpha" article on them. Author projects eps of 70c this year, $1.10 in 2009 and $1.96 in 2010. This is based on $90/bbl avg price this year, $95 in '09 and $100 in 2010, which seems conservative. Author projects eps will be 16c for Q1 which will be announced soon. Should also be moving to amex or nasdaq in the next 10 months. Makes the current SP of $3.32 seem very cheap.
http://seekingalpha.com/article/75660-china-north-east-petroleum-strong-growth-clear-visibility?source=yahoo
CS derivative loss, Kipp, Capstone previously hedged 15 million lbs of copper over the next 3 years. Because copper prices went up about 80c from the beginning to the end of the last quarter, they were required to mark down what those hedges cost them in future profits against the quarter. 15 mil lbs x 80c/lb=$12 mil.
This is an accounting rule that I never liked as it can cause huge gyrations in earnings in a quarter if a company has much material hedged. These are all noncash charges because it really only costs them future profits as the price of the commodity rises. Yet in the case of CS, they are required to charge 3 years worth of hedges against the current quarter earnings. Without the effect of those hedges, CS had a very good quarter. Will be interesting to see how many only look at the bottom line # and sell today. If there is a big sell-off, I'll be buying.
CS - I haven't calculated the #s, but with the big run-up in copper in Q1, the mark to market on their hedge on 15 mil lbs of CU (vs 6 mil lbs production) will likely wipe out the lion's share of earnings reported. I sold today mainly because CS always seems to take a tumble after earnings, and those come out tomorrow.
CNEH -Looks like I had no reason for my concern that production in Q1 might be a bit disappointing due to China's bad weather and big snowstorms. Growth in production by 24% sequentially is fantastic along with higher oil prices. I'm looking forward to its price action leading to earnings PR in a little over 2 weeks.
LTUS - Sold off today, although still very nicely up from recent lows. Probably a knee jerk reaction to news that a director is resigning. That is not new news though, it was announced in the recent 10K that he would be leaving after that filing was done. He will also stay on as a consultant to LTUS. Probably he makes more money that way.
From the 10K:
"Mr. Rothberg has advised us that he intends to resign from our Board of Directors following the filing of this annual report. There are no disagreements between our company and Mr. Rothberg......"
Ethanol...Tim, Didn't realize that the production of ethanol provides so many byproducts until I googled after seeing your post. Mainly animal feed, gluten, and corn oil. It seems that "ethanol" is taking a much bigger rap for high food costs than it deserves.
http://www.foxbusiness.com/article/whats-rising-cost-food_576063_1.html
ethanol stocks... Tim, I haven't been following but now I see they have really been taking a beating. I also see corn prices continue to charge upwards as well. What do you think about them at current levels?
http://futures.tradingcharts.com/chart/CN/W
YHGG - I still can't help but wonder about this one. With a trailing PE of 2.5 and a BV of $8 vs $1 SP, this appears to be an incredible buy assuming it is legit. According to their income stmt, revs hardly changed at all $648.146 Mil vs $648.054 mil. That is an increase of .015% for a company that is in the agricultural, chemical, and mineral industries which have all seen lots of volatility in pricing over the past year. Even if prices had remained stable there should have been a substantial increase simply due to the increase in the Chinese currency vs US$. Cost inputs hardly changed at all either leaving a gross profit that was virtually unchanged as well. No breakdown of sales or for that matter any detail or notes with the annual report either. No foreign currency adjustment either while the lion's share of Chinese stocks reported additional gains there as well.
Company says it is making efforts to get listed which means an outside auditor to go over the books and sign them off. I wonder how many have taken a look and said thanks but no thanks. For now, that is also my opinion on buying the stock.
DPDW- hank you said "That rate just never happened,, just as GFCI.pk never acquired XOM as was posted on thier website"
DPDW ...Hank- What??? Are you saying that DPDW is not paying 15.5% interest on a $13 million loan? According to their own 10K, they are paying that and they also threw in 5 million warrants to the lender as well at well below market prices. That is another $1.5 million expense according to their 10K.
This may still be a great buy but facts are facts...they had to pay a high interest rate for financing- and the lender has a closer look at the operations than the stockholders do.
LTUS - CC recap:
Revs up 57% in '07. Stockholder equity up 126%. Gross profit up 130%. EPS was 26c diluted in 07, 19c diluted excluding one-time items. (vs current SP of 93c)
Company has 4 branded drugs which comprised 70% of net revenues last year. Continued growth in sales of current products expected in 2008.
14 new drugs are in late stage development. 3 of them are expected to be approved for sale between April 08 and Oct 08.
I couldn't understand the chinese interpretor when he talked about the expected size of the market for those new drugs.
China's OTC drug market growing 30% annually as population ages and more people can afford drugs.
Nasdaq listing expected within 18 months.
In QandA, someone asked about the stock sales by GTEC, China West, and Jtan. Abh3 was right (was someone here the caller?) CFO said that all have sold shares, including some private sales, but still have holdings. China West and Jtan have slipped under the 5% radar so they don't know about them. GTEC holdings have dropped from 6.7 mil shares to 3.25 mil shares. CFO said GTEC has no plans at present to sell more shares.
At least two institutional analysts called in, Maxim Group and Seesar Capital (sp?). What this stock needs is some institutional interest, so hopefully this is a start. The outlook sounds positive.
abh3 re LTUS - There has been a lot of ongoing selling by others that has no doubt dropped the price down to its current level, but I see that becoming less and less of a factor going forward.
One of the big sellers has come from 13 million shares that were provided to GTEC, China West and JTan in March 06 in connection with helping LTUS go public. Of those 13 million, only 3.2 million remain in their hands according to the latest 10K. About 75% of that pressure is behind us.
The convertible debt is gone. It was paid off with the convertible preferred financing.
The $5.7 million in convertible preferred is only convertible after Feb 2010, so that won't be an issue for two years. (besides they are also earning 8% interest so why convert?)
The warrants are priced at $1.20. I doubt we'll see those converted at anywhere near the conversion price and they have 5 years to convert them, so I doubt we'll see any pressure there for a long time.
Last, but certainly not least, 25.7 million or 61% of the shares are owned by officers and directors. Virtually all of those are owned by the founder and CEO and his wife. I don't see any of those being sold, in fact, they have even put 7.5 million shares in escrow for "make good" provisions including earning a minimum of $13.5 million this year (2008).
The way I see it is that the price has been beaten down far below fair value from selling you mentioned in the past. That is mostly behind us. With recent PR and earnings visibility, there is a strong chance that buying interest is returning and the price will continue to move back up to higher valuations.
Rogue, I always watch my "eggs" closely. Sure there is a higher risk with bb china mergers, but the opportunity for outsized rewards goes hand in hand with that as well.
Many and probably most of the chinese companies traded in the US went the reverse merger route because it was easier and faster for them than starting from scratch. Remember, they also suffer a huge language barrier to gain access to the US market. Some have turned out to be scams and more no doubt will as well. But I believe that the majority are legitimate companies and most of them remain at very attractive valuations. For that matter, most otcbb domestic companies are fraught with risk. But we invest in them when we believe that the potential rewards make it well worth the risk.
Some are making plans to trade on a listed exchange or the nasdaq. Once they accomplish that the market typically rewards investors...SUTR is a good example. Others I like now that are heading in that direction include CNEH and LTUS.
Noticed that you picked NWD as one of your PS8 picks. This is an AMEX traded chinese company that also originated from a Boca Rotan, FL based company, Bio Aqua Systems. I haven't researched it but it appears to be the Chinese reverse merger type that you dislike. It appears that they are not all bad, even in your view.
LTUS -I think a dolphin is all wet on this one, and expect it to break out of the channel and move much higher over the next few months. It should also be up tomorrow with the CC and PR in the morning. But that is my opinion and different opinions are what makes markets.
LTUS -Announced they will have a conference call tomorrow morning along with a PR for Q4 and year end results. I believe this will be the first conf call they have done. Their CFO is american so investors should be able to understand this one.
http://biz.yahoo.com/prnews/080416/cnw019.html?.v=32
EGMI - Miscommunication is a nice word for it. To clarify, they have already issued an audited 10K. Interesting that while the income and cashflow statements appear the same as the old one, the S/E on the balance sheet is different and so is the total for diluted shares. I didn't look at in detail yet to see why.
http://www.sec.gov/Archives/edgar/data/1083036/000114420408022595/v110409_10ksb-a.htm
OT- Tax question- Form 1099B, line 2 showing "gross proceeds from sales" from my broker does not agree with the line showing total of sales on my Schedule D. The reason is that the broker included proceeds from a short sale that has not been closed out yet.
Since the totals don't match up how do I reconcile the difference to satisfy the IRS? Thanks to anyone who can help.
KIK..I was told, greed is good, and I am just trying to help out the taxman. :) Speaking of which, tax returns or extensions are due today. :(
LTUS - Wade, PR should be out soon. Maybe that will get this one moving.
LTUS - Company also spent $900,000 in Q4 and $2.4 mil on R&D for all of last year which is over 6 times what they spent in '06.
Sounds like the payoff may be coming soon with numerous new products. These will be added to their 4 existing branded products. This is from the new 10K:
Lotus East has a product pipeline containing approximately seven products in different
dosage forms which are ready for commercialization in China for the treatment of
diseases. Lotus East expects to receive Chinese SFDA approvals on those products
in the near future. Lotus East intends to commercialize or license these drugs
during 2008 and 2009. In 2007, Lotus East resumed its new drug research and
development effort and started five new research and development projects and
those projects are in different development stages. Major projects currently
being undertaken at these centers focus on the following:
DRUG NAME TARGET TREATMENT STATUS (A)
---------------------------------------------------------------------------------------------------------------------------------
Calcium Dibutyryl Adensine used to cure angina and acute myocardial infarction Pending final SFDA approval
Monophosphate for Injection
---------------------------------------------------------------------------------------------------------------------------------
Rabeprazole Sodium raw material and used for curing gastric ulcer, duodenal ulcer, Pending final SFDA approval
Rabeprazole Sodium Enteric-coated stomach ulcer, reflux esophagitis, Zollinger-Ellison
symptom complex and gastrinoma
---------------------------------------------------------------------------------------------------------------------------------
Compound Allantoin Dispersible Tablets used for curing gastrelcosis, duodenal bulbar ulcer Pending final SFDA approval
and chronic gastritis
---------------------------------------------------------------------------------------------------------------------------------
Gatifloxacin Lactate for Injection used for curing acute nasosinusitis, chronic Pending final SFDA approval
bronchitis, pneumonia, gonorrhea, and rectum
---------------------------------------------------------------------------------------------------------------------------------
Sodium Aescinate for Injection use for curing hydrocephalus, swelling caused by Pending final SFDA approval
wounds or surgery operation and for venous return
disorder.
---------------------------------------------------------------------------------------------------------------------------------
Candesartan Pills used for curing essential hypertension Pending final SFDA approval
---------------------------------------------------------------------------------------------------------------------------------
10
--------------------------------------------------------------------------------
DRUG NAME TARGET TREATMENT STATUS (A)
---------------------------------------------------------------------------------------------------------------------------------
Nicergoline Pills used for the curing feeling dullness, impaired Pending final SFDA approval
concentration, memory deterioration, gloom and
restlessness caused by cerebral infarction sequela
---------------------------------------------------------------------------------------------------------------------------------
Isosorbide Mononitrate-Sustained used for preventing angina (chest pain) caused by Pending SFDA approval
Release Tablets heart disease.
LTUS numbers much better than I expected. I was looking for about 5c in Q4 based on "make good" provision in PIPE financing. Also don't forget that the 14% convertible debt was paid off with the 8% PIPE financing so 3 million potential diluted shares go away. Dilution is not nearly 20%. Also, no income taxes will be paid for the next 4 years per 10K.
6.74c x4 = 27c eps annual rate. Current PE = 2.6 based on annualized Q4 earnings after removing VAT tax credit. Revenues were up 16% over previous quarter and eps was up 33%. Tomorrow should be a very good day for LTUS.
IFSG- I also added a few shares, it certainly does seem very cheap here. One thing I am leery of is their comment that it will cost about $10 million to get all their facilities converted to BlueRay disc manufacture. I didn't see a time frame to do that but with cash and cash flow tight now, there could be a dilutive stock offering later this year.
ALJJ-I was wondering the same thing about the other income item in the Q1 report (ending 12/30). No details provided in the 10Q but they did say this in the PR about the first Q:
ALJ’s net income has three root causes: a near-doubling of operating profit due to strong performance at KES, a twenty percent (20%) decrease in interest payments resulting from last year’s debt restructuring and the elimination of liabilities related to long-standing discontinued operations. Absent the latter, net income would have been about $2 million.”
They do state income from operations was $3.383 mil. Debt service and preferred stock dividends totalled 1.647 mil and minority interest and taxes totalled $385K. That leaves $1.262 mil in net income for stockholders. Although that still doesn't agree with another statement in the 10Q that they earned a net profit of $1.378 mil.
Either way, it looks like they earned about 3c/share in Q1 excluding one-time items.
Noticed that they have a small interest in a Planet Hollywood in Alabama carried on the books at $75,000. I wonder how a steel producer ended up with that?
DYII- $3.8 mil in the current Q is little compared to the $64 million that the company still could collect in old A/R's that have been written off. To date, they have been winning the lion's share of those cases. Also the company is buying back up to 2 million shares and buying them on a daily basis; that should add support. Still working on their China hospital spin-off. Wish they had provided more info on what that new fee guideline for Texas worker compensation program means to future revs. All we know now is "lower".
I think I'll hold for now.
From the 10Q: Due to a number of factors outside the Company’s control, including a change in the Company’s reimbursement collection experience associated with potential changes in the reimbursement environment in which the Company operates, it is possible that management’s estimates of patient service revenues could change, which could have a material impact on the Company’s revenue and profitability in the future. It is very difficult for management to quantify with accuracy any reasonably likely effects that a change in estimate could have on the Company’s financial position and results of operations. However, management believes that the most reasonably likely effects that a change in estimate could have on the Company’s financial position and results of operations would be for the Company to collect amounts on accounts receivable greater than what is recorded on the books at February 29, 2008. The amount of such additional collections could range from zero to an amount that could approach $64 million, which represents the ultimate amount that the Company could collect on its MDR accounts receivable as of February 29, 2008 if all were settled in the Company’s favor. In accordance with the Company’s revenue recognition policy, accounts receivable are not written up to amounts ultimately expected to be collected until management can demonstrate that collections on an identifiable group of accounts are more than the revenue which was recorded on the identified group of accounts. Amounts are not written up to management’s estimated amounts due to the length of time it takes to ultimately settle the MDR accounts receivable and the current uncertainty associated with such settlements. Any change in this estimate would impact revenues in the statement of operations and cash in the statement of financial position.
Rogue, never claimed to be a trader. But I never complain when I get lucky, either. I really prefer to buy and hold- hate sharing so much of my pot with the taxman. Speaking of which...$&%$@#..it's nearly tax time again.
SUTR.. KIK, Steel is a hot industry right now. Compared to CPSL, another chinese steel company, SUTR is still selling at half the PE and 1/4 the P/S ratio. SUTR is also lower PE than GSI.
Also looks to me like it is close to breaking through a 6 month downtrend line.
UTVG- Sure is a nice bounce back after starting out much weaker. I slept in too or I would have added more as well ( I was buying friday including a few at the day's low). I could only hope it does anywhere near as well as rogue's example of a one-time dirt cheap china stock, CYD. That one, languished around $1 and even lower in 2001 but by two years later it had hit over $30.
Len, here's a different look at code's results:
In terms of reduction in total market capitalization, the drop in micros was only a little more than the large caps and about the same as the other groups back in the 73-74 recession (sure glad I missed that one, btw).
Large cap -55%
Midcap -60%
small cap -59%
microcap -61%
UTVG- It looks to me that the $3.5 mil financing fell apart after the original $600,000 payment. Company only says there was a dispute with the financiers over where the proceeds would be applied. But somebody sure has been selling like there was no tomorrow. Counting today, about 9.6 mil shares have traded since Feb 28 while the price has dropped about 60%.
This is also in the 10K:
On February 4, 2008, we received commitments from three Chinese entities for $3,500,000 in financing at a price of $2.70 per share. The funds were to be advanced in three tranches. We received the first tranche of $600,000 on February 4, 2008. The second tranche due February 28th has not been received, in part, as a result of a dispute with the investors as to how the proceeds would be applied. Discussions with the investors are ongoing, but in light of market conditions we do not anticipate receiving either the second or third tranche on a timely basis. The company is continuing to generate cash from operations and is evaluating its options with a number of prospective financiers.
UTVG- Outstanding shares have grown from 30.45 mil shares on 12/06 to 36.8 mil on 12/07 an increase of 21%.
But, during the same period, revs increased by 340%, Stockholder equity increased by 450%, and eps grew by 270%.
Of the increase in shares, 2.6 mil shares were issued for acquisitions (4 companies acquired in '07), and 3.8 mil shares were issued for consulting fees and the lion's share of those were issued to help the company to become publicly traded in the USA. The company states in their 10K that they expect to reduce the number of shares issued for consulting in the future:
"Stock based compensation reflects shares issued to certain consultants who, among other things, assisted the Company in its efforts to become publicly traded in the United States. The Company anticipates that it will not rely as much on such consultants in the future and that the amount of stock based compensation will decrease. The Company anticipates that it will look to its directors, counsel and other third parties to provide the services previously rendered by these consultants and that the fees payable to its directors and counsel will increase to reflect the added services rendered."
Increase in shares seems reasonable to me considering the growth rate and one-time costs of going public in the US. I decided to see if I can catch the proverbial falling knife without getting cut and bought shares today.
northern, re CNEH. Maybe I am missing something but in the supplemental oil and gas disclosures on pg 20 of the 10k, it showed reserves at 2.24 mil bbls of oil at year end 2006. Where did you see 1.47 mil bbls?
Now I also see the following:
"Proved developed reserves are those which are expected to be recovered through existing wells with existing equipment and operating methods. Reserves are stated in barrels of oil (Bbls). "
So, unless the company decided to spend the money to drill some test holes in new areas, reserves are only based on existing wells (as you said). Bottom line is that the reserve number will likely only increase as new wells are drilled.
tim re SOYO..I think the poster meant that SOYO is selling at 90c ($.9). He did state in the 2nd para that the company earned 6c in the current Q.
BTW, looks like the market played April fools with many of my microcaps- missed the big market rally...and that's not a very funny joke.
CNEH- I suspect that today's sell-off is probably related to the 10K, specifically disappointment that there was not a big increase in proven reserves. Proven reserves increased by only 10% from a year ago. The PV10 value of their proven developed reserves is at $39.3 mil. Hard to believe that it did not go up more considering that they have now drilled 157 producing wells and have yet to hit a dry hole. Further, average production on a per well basis at their main field, Quain, was substantially higher last year than the year before (roughly double if my calcs are right)
CXPO- Looking over the 10K, they are showing a huge increase in proven reserves. The PV10 value of their proven reserves increased to $399 Mil from $77 mil a year ago. ( PV10 is the estimated value of all future production less all costs including taxes, discounted at 10%/ year.) That is worth nearly $40/ fully diluted share. This is based on a $6.86mcf avg nat gas price which is well under current prices and also well under the floor price of gas hedges. I don't know of any OG stocks that sell at such a large discount to their PV10 value. Even better, they don't include their undeveloped acreage in proven reserves, and their undeveloped acreage is larger than their developed acreage (61,000 acres vs 49,000 acres).
CXPO had an operational Cashflow of $69.6 mil in 07. That is close to their diluted market cap of about $90 Mil (including preferred).
They took a huge $18.2 mil loss from derivatives in Q4. That is about $3.54/ share basic. (they don't include dilutive shares when calculating losses per share). Derivative losses for the first 9 months were virtually nil. The average sale price of nat gas per mcf equivalent was $6.78 in Q4, down sharply from $8.13 in Q3. It is not clear to me why there was such a big drop.
Average floor price on their future nat gas collars is $7.85 and an average $9.40 ceiling price. Again that is well above their avg sales price in Q4.
I was concerned that they would be hit by hedge losses in Q4, although I didn't expect them to be this large. It looks like they will show more in Q1 which will be out in 45 days. After that, we could well see a return to some great reports again. I decided not to sell here, in fact I may add some depending on where it settles at.
DFNS- Announced that they will be filing their 10K late but they also say they earned about 3c in the last quarter. This was attached to their notice of late filing:
The Registrant expects to report that its revenues for the year ended December 31, 2007 increased to approximately $19,262,928 from $10,601,546 in the year ended December 31, 2006, an increase of 81.7%. The Registrant believes that it will report a net profit of approximately $1,616,929 or $0.07 per share for the year ended December 31, 2007 compared to a net loss of $330,523 or $0.01 per share for the year ended December 31, 2006.
CDS-Whoops again? After someone noticed that CDS had posted their Q4 earnings early on their website before removing it (because of the slip, earnings came out this morning instead of after the close today), now a couple of posters on yahoo say that they have also seen a notice that CDS is moving from the amex to the nasdaq on May 12. Now that info has also been removed from CDS's website. Assuming it is true, a move to the nasdaq could bring more interest to this one.
OT-Len, I think that what those enticing zero % offers are all about is that many people will forget and make a late payment during the free year and then they will not only pay interest going forward but also be backcharged for interest from the beginning of the loan at something like 19.9% or whatever the default rate is. Odds are enough people pay late due to forgetfullness or a tight spot that those companies still make money on those deals anyway.