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SUTR..2morrowgains, I'll be happy if earnings come in around the previous qrtr when they earned 17c. Per the presentation that you linked to, SUTR was already operating at above capacity in most categories of steel production in Q1. Of course, we could see margin expansion and higher earnings from that but I'm not counting on it. Hopefully, the company will announce in the CC that the new mill is open and that will allow for substantially higher production and profits going forward.
Good info R59. I would only add that since we are already down about 8% for the year (basis SP500), and there are only 12 out of 50 years that were down more than that. Of those 12 years that were worse than 2008 to date, the average loss per year was 14.4%.
We have already lost more than half of that average for the year to date so the odds of being in stocks look much better to me than sitting on the sidelines with cash. I still have much more cash than I normally do but I am gradually reducing my cash position. Also, the FED has dropped rates substantially in the last month and I expect that more are coming. I believe it is a losing proposition to fight the FED now.
TGB- Don't own it but I would be nervous about holding this one into earnings. Mgmt seems to somehow find a way to disappoint..tire shortages, equipment breakdowns, currency losses, mining difficulties, take your pick. They also always have an excuse and I like it longer term with increased production coming...Just watch out at earnings release.
SUTR operates in Changshu which is near Shanghai and Shanghai is nearly 600 km from Beijing where the Olympics will be held. Shenyang city, the cohost city for the Olympics, is even further away.
I would think that SUTR should be safe from any Olympic related shutdown. It may even help them as manufacturers up north look to SUTR to provide steel if local supplies are cut off.
http://www.chinapage.com/map/map.html
MPAD reported year end results-eps 63c vs 55c eps
For Q4, eps were 19c vs 11c year ago and sales were 5.3M vs 4.1M a year ago. Company called the outlook for sales and profits as stable for the year ahead.
SUOT- I'm looking forward to their earnings release and first conference call next week. A transfer to the nasdaq would also be great news. I am certainly tired of seeing the MM snagging all the shares offered at my bid price. That is not generally allowed on nasdaq listings.
TCCO-They had a terrific quarter but I was puzzled about the way they handled it. It was announced on friday afternoon after the market close which is usually done when companies have bad news to share. The numbers were laid out matter of fact without any comments such as sales were 300% of year ago levels. That was quickly followed by more expansive comments that DSP9000 sales would be at lower levels in the following Qs. Perhaps they are downplaying their achievements because they fear it might attract more competition?
I see that they have an annual stockholder meeting scheduled for tomorrow morning. No doubt, they felt an obligation to get the news out ahead of the meeting. I also see that a year ago at the last annual meeting, the officers were awarded new stock options. The amounts were minimal but since they are awarded based on performance and last year was a lousy one, I would expect that. This year is a different story however ,sales and profits are booming. I also expect that the option prices are based on the current stock price. Which makes me think that maybe mgmt wanted to minimize the impact of this good news to keep their option price as low as possible...I agree with Gilead that fair price is around $10-$12 now, although I don't think we'll see it tomorrow. If anyone is near Concord MA tomorrow morning and has the time to attend the meeting, that would be great. One question I would have is what percentage of total sales were the DSP9000 sales last quarter. According to their website, DSP9000 is one of about 20 different products they offer in the business, government, and personal markets.
R59, re SUOT...Is this their first conf call? I can't see where they have done one before. Hopefully they want to share a very good report with stockholders.
TCCO- Paul Sonkin filed the form 4 referenced. He is filing as a 10% holder with the Hummingbird Value Fund. He almost looks like a daytrader the way he has been buying and selling shares lately.
Here's a link to the Form 4 that was filed:
http://www.sec.gov/Archives/edgar/data/96699/000116643208000001/xslF345X02/primary_doc.xml
TCCO- I also added more today. I wouldn't dare even dream of 75c for the Q, and there is no way to know but if earnings do increase at the same rate as backlog has from the previous Qrtr, we'd be looking at around 50c. If that happens, TCCO should soar.
AEY is one of few in the green today. Earnings will be out before the open on Monday. I'm expecting a good report as well as good reports for the coming year. Providers are required to go all digital by Feb 2009. Cable co's are upgrading their systems with wider bandwidth, more high def and other features to compete with Satellite.
INX.v- Company had warned that Q4 is a seasonally weak quarter. Sales and revs came in only slightly lower than Q3 before the one time write offs which they had also warned about.
"Q4 revenues are typically lower than previous quarters as In-Touch customers' focus on the annual holiday sales cycle. Management expects Q4 Revenue in the range of $1.25 million to $1.4 million CDN and expectations for FY 2007 revenue in the range of $4.8 million and $5.0 million. Revenues are also expected to grow 40% in fiscal 2008."
CNEH- Now I see that KIK brought it to this board at 39c. Outstanding KIK!, it actually became an 11 bagger in 5 months. Since then it has sold off about 50%. Still in relative terms one could argue that the stock is cheaper now than it was back when KIK introduced it.
Back when it was 39c, CNEH earned 181K (before tax) on 1.24 mil in revs. 1 year later, in their latest Q, I estimate they will earn about 2.3 mil (after tax) on $8mil in revs.
Although the stock price is 5.8 times higher now, their revs are up 6.5X and earnings up about 12 X. They also have only 2/3 of the shares outstanding they did back then which makes it even better.
CNEH: northern, thanks for the info. I decided to quit trying to bottom fish and added a bunch more shares today. This should be set for a double or more over the next year, IMO.
CNEH-Thanks Northern, but I was sent a copy. Makes sense now. The 10Q says 40 new wells, the presentation indicates 100 wells with $10 mil financing. Now I see the author used the mid-point; 70 new wells with $5 mil in financing.
It certainly is amazing that not only does Wang, the company founder and CEO not grant himself a bunch of stock options, but he and his mother have actually given back 10 mil shares AND forgave $7+ mil in loans they made to the company. Talk about a cultural divide! Author helped to explain that in his article. Still hard to believe. Know how many shares they own now?
Looks excellent but cash is very tight and they can't afford much downtime. It looks like the wells are in Northern China and I have read of very cold temps and snow there. They need to maintain production to cover capex, not only in upfront costs on new well drilling but also deferred drilling costs. Do you have a handle on how exposed they are to adverse weather? Im wondering if their crude is sent out via truck or pipelines. If trucked, any idea as to how far away they need to travel?
CNEH- That is an impressive analysis. I see that the author forecasts 70 new wells in '08. When I checked the last 10Q, the company projected 40 wells over the coming year (9/30/07-08). Not quite the same period but the difference should not be that great. There was a presentation from the company last Nov although I have not seen it. Did they provide a different #.
Northern, do you (or someone) have a link to that presentation?
Watching CNBC should provide fed cut statement about as fast as it is available.
CNEH, abh3..Their production #s for their current quarter were actually a little light compared to what I expected, perhaps they slowed their pace of new well drilling to conserve cash. Last Q, they cashflowed $5 million before capex. Capex ate up over 90% of that. This Q, cash flow before capex should be even higher. Wasn't it something like $10 mil in financing they were looking at? That is a potential 25% dilution even if it was all stock at current prices. I would just as soon they maintain a slower drill pace at least until the SP is higher. Appears to me that they can still grow very nicely on CF.
CNEH- I also expect we'll see about 11c eps for the Q. Here's my breakdown:
Assume $86/ bbl x 93,329 bbls = $8 mil revs
less: Depreciation $1.58 mil
Production costs .85 mil
government oil tax 1.34 mil
SGA, other .40 mil
Profit before tax $3.83 mil
Income tax (34%) 1.3 mil
Minority interest .3 mil
Net income= $2.23 mil. Assuming 19.5 mil shares= 11.5c/ share.
At $2, this one seems cheap to me (I own shares).
Youre right littlefish, 5 out of 6 of cl's August gold picks from that post are down, By my count, cl's august stock picks you linked to are actually down an average of 24% since. Certainly no reason to shed tears over missing that list, just as no one I know of was laughing back in August either. We all win some and lose some, hopefully we win more than we lose, but bragging should be left off these boards.
cl, ??I don't believe many here were laughing at you last summer for buying gold jrs, I really don't remember anyone doing that. Many of us are marking time and patiently waiting for the jrs to take off though. I'm also thinking that some base miners may be nearing good buy points again. A profitable gold miner one that I like is NXG (larger, profitable and more liquid than many) I'm still waiting on that one as well (from a previous post):
NXG should cashflow about 150 million in 08 after taxes vs $750 mil mkt cap which is dirt cheap for a gold miner. Average PE of gold miners that are profitable is 23. No debt, no dilution, and the company will still have over $100 million in cash after the $250 mil acquisition of perseverance is completed. Analysts in conf call sounded very positive about the deal and I expect that upgrades are coming. After the deal 84% of NXG's production will be gold, 16% copper so I expect the market to focus on NXG as a gold producer not a base metal company which commands substantially higher multiples.
All IMO, do your own DD.
R59, re HRT: I picked up a few shares near the lows when you mentioned this one...wish I had more. HRT and DYII are the two bright spots in my portfolio today; both are up 10plus%. Both are medical related; probably a coincidence but maybe someone put out a strong buy on these medical micros?
subprime mess..It was the lenders and banks that created this nightmare. I still can't believe that so many accepted as documentation whatever the borrowers told them their income was and so many of those were done with teaser rates that had negative amortization. A great example is Downey (DSL). 89% of their loans are on CA properties. 89% of their loan portfolio is based on non- verified borrower stated income plus 7% of that group also has no verification of assets either. 86% of their loan portfolio now have larger loan balances than they started with. Also 42% of their loan portfolio was originated in the last couple of years at or near the peak of the bubble.
That is why I remain short DSL.
Thanks KIK for your donation to the charity of my choice. It actually turned out to be a good project for me trying to decide which charity I should choose to be the benefactor of your generosity. I contribute to 8 or 9 different charities annually, all of them for good causes...particular favorites of mine are related to cancer treatment and research and disaster relief. But frankly, I don't normally make $500 contributions either so I decided it was worthy of some good old value research to see which ones give the most "bang for the buck". I have read that many spend way too much on fund raising and promos rather than actually helping their cause but never had taken the time to actually look into it.
I found the site "charitynavigator.org" which rates hundreds of different organizations in terms of their efficiency in gettings funds to where they should go and provides links to their websites. After looking through that, I will likely be making some changes in who I make my own charitable contributions to in the future.
As for your contest, the one I have selected is the American Red Cross. It seems appropriate since us VMCers are able to enjoy a better life thanks to our sharing information, that some of that gain is shared with those who have become victims of disasters and tragedies, often through no fault of their own. Over 94% of the ARCs funding actually gets out to help those in need too. Here is a link to the charitynavigator website. It should have the ARC address and a link to their website.
http://www.charitynavigator.org/index.cfm?bay=search.summary&orgid=3277
AFPC, my wild card pick, is the one that won it for me here. Ironically, KIK and I briefly talked about this one in a PM the week before the contest started. As of last thursday, investhealth partners, a foreign fund that has been a huge seller of its shares is finally out of the picture. AFPC is run by good management and I expect them to return to profitability in the near future, qualifying them for discussion on the VMC board again. I think this one is even a potential 5-10 bagger over the coming year or so but I am waiting to see some more numbers which include the results of their new 3d dental scanners out before I make that call.
Also again, many thanks to Skillz and Len for all their efforts in setting up this contest and the board.
cl, re CHE- Thanks for sharing your conv with the CFO. I was surprised to hear him comment that the market does not reward their dividends. Historically, there appears to be a rather strong correlation between the divs they pay and their average stock price.
In 2007, they averaged a $8 SP with a $1.20 dividend payout (same as current payout)
In 2006, they averaged a $10 SP with a $1.43 dividend payout.
In 2004 and 2005, they averaged a $15-$18 SP with a $1.80 dividend payout. The stock started cratering in Q4 of '05. I think that was related to uncertainties relating to their pace acquisition plus their gulf operations were hard hit by Hurricane Rita.
Also, I thought that they were setup to minimize taxes by being set up as a canadian trust and I believe that requires them to pay out a high percentage of operational cash flow in distributions to stockholders (actually unitholders). In 2006, they paid out over 90% of their CF in distributions. I'm not sure what the minimum is but most Canroys are paying out 70% or more of CF.
At any rate, I think the market will reward them if they increase the divs.
Bobwins, I agree that the importance of the US housing industry on copper prices is overblown. Virtually all of the local builders already switched to plastic from copper pipe a couple of years ago when prices shot up. I expect it is the same nationally unless some building codes prohibit it and I am not aware of any. Only wiring still uses copper extensively.
Anyone shorting solar here? They have come down but some are still priced in the stratosphere. FSLR, for example, has a market cap of 40X sales, trailing PE of 115 and a Forward PE of 80. Current market cap works out to about $17 million per employee. Seems awfully rich to me with oil prices now falling. I have no position now.
Remembering the rule..Don't fight the FED. 3 rate cuts in a row by the FED has meant a bull market in the past. I believe today was their 3rd cut in a row. Probably will be still another cut next week which will make it 4.
Sure not looking forward to tomorrow. It seems like a good time to ask when "circuit breakers" would kick in?
Found my answer...If the DOW drops 10% before 2 PM they will close it down for an hour. 20% drop shuts it down for 2 hours. 30% closes it for the day. May we never see that!
And the rout continues in Asia. Markets are down 4-6% more there:
^AORD All Ordinaries 5,341.60 9:30PM ET 289.30 (5.14%)
^SSEC Shanghai Composite 4,580.08 8:59PM ET 334.36 (6.80%)
^HSI Hang Seng 22,630.81 9:17PM ET 1,188.05 (4.99%)
^BSESN BSE 30 17,605.35 5:28AM ET 0.00 (0.00%)
^JKSE Jakarta Composite 2,375.88 9:29PM ET 110.00 (4.42%)
^KLSE KLSE Composite 1,439.49 Jan 18 21.22 (1.45%)
^N225 Nikkei 225 12,738.31 9:00PM ET 587.63 (4.41%)
Brinker is nuts if he said there are only $300 billion in mortgages and $30 billion of those are at risk. We have already seen nearly $100 billion in write-offs. More are coming and now I hear that commercial real estate loans will be the next big shoe to drop. Here is an apt question from a Merrill Lynch economist:
Finally, the question must be asked: if the first 7 percent downleg in home prices could manage to trigger …
1. Almost $100 billion in write-downs in the banking sector;
2. A 65 percent year-over-year surge in foreclosures;
3. The highest residential real estate loan delinquency rate in 20 years; and,
4. A 20 percent plunge in S&P financials …
… then what, pray tell, will the next 20-30 percent have in store?
CHE.UN- Looks interesting although the balance sheet sure is not a pretty sight by any means. Lots of LT Debt. Current liabilities are larger than current assets. $148 mil in intangibles and $87 mil in goodwill are assets on the balance sheet. Without those, the stockholders equity (acually unitholders in this case) would be negative.
Per their latest MDA, the company depends on INCO for most of its sulfur. I would expect that the input costs for the sulfur could also be shooting higher along with sulfuric acid prices. Their agreement with INCO ends after next year and they have recorded an intangible asset with respect to that agreement. Would like to learn more details on that contract with INCO.
INX.v- Which of you guys snagged up those 24 and 24 1/2c shares that became available?...congrats
Price drop was perhaps in response to the whopping $27,500 new placement of shares that employees bought up.
Touch Survey Systems Ltd. ("In-Touch" TSX-Venture: INX) is pleased to announce that it has entered into a term sheet for a non-brokered private placement of common shares for aggregate proceeds of twenty seven thousand five hundred dollars ($27,500.00), which is anticipated to close no later than January 18th, 2008.
Participating in the placement are 5 employees (2 of which are insiders) and 1 contractor of In-Touch. They will subscribe for an aggregate of 110,000 common shares at twenty-five cents ($0.25) per common share. No Directors of the Company or other individuals are participating in this placement.
"We are heartened by this vote of confidence from our employees, who are key to our continued success," said Michael Gaffney, Chief Executive Officer.
Selling bonds short: Assuming that we see a return of inflation and much lower bond prices down the road, the author recommends shorting bonds. Is there an ETF short or ultrashort index fund on long term bonds? There seems to be one for just about everything else now.
Intel disappointed, last I saw it was down about 12% after hours. Besides the nasdaq, INTC is on the Dow and SP500 indexes. Looks like it may well lead the indexes lower tomorrow.
AAIA sentiment ratio became a bullish market indicator with a weekly close of only 28%. It is a contrary indicator of individual investors' bullish and bearishness. When the indicator gets below 30%, that is considered a strong bullish indicator for the markets.
http://tal.marketgauge.com/dvmgPro/Charts/CAAIISR.htm
NSOM challenge
Two fast growing chinese stocks are in my picks, LTUS and SUOT.
LTUS develops, manufactures and distributes pharmaceuticals and drugs. Last quarter revs were up 83% vs a year ago and income from operations was up 97%. Its trailing PE is only 7.6 and it's SP is down to $1 from a 52 week of $3.30.
SUOT is a fast growing steel producer in China. Revs were up 62% and net income more than doubled vs the year ago quarter. Strong balance sheet with $54 mil in cash and restricted cash and no LT debt. Mkt cap is $160 mil. Adding new production facility next month.
SIMG- Semiconductors, primarily for High definition applications with strong patent protection. Very strong balance sheet with $2.60 in cash (vs $4 SP) and no debt. Analysts expect them to earn 8c in the current Q and 35c for the year. Back out the cash and that is a PE of only 4.
INX.v- Found this one courtesy of Gilead. Also like it after more DD. Earned 1.3c last Q vs 26c SP. Company expects to grow revs 40% in 2008.
OISI.ob, this medical tech company has been discussed quite a bit on VMC board lately. SP is way down to 58c even after earning 2c last Q. Again a strong balance sheet with 28c in cash. Bringing new products online.
AFPC.ob-My wildcard pick. Another medical technology company that has also been beaten down from fund selling by investhealthpartners to raise cash for redemptions after a terrible year (same has happened to OISI). They are a well managed company and nicely profitable until last year when they acquired QR and have been integrating their operations and adding the support team needed for marketing their new 3d Conebeam dental image scanner to the dental profession. Recently approved for US sales, the company expects strong sales and profitability from this in the current year. This stock was in the $1.25 - $3 range over the last 3 years until a few months ago. I expect them to go right back into that range over the next year (currently at 40c-edit 55c after a PR today)
http://biz.yahoo.com/bw/080114/20080114005971.html?.v=1
http://biz.yahoo.com/bw/071214/20071214005342.html?.v=1
Still another big down day, As bad as it seems, a turnaround is a-coming, I just don't know when.
I saw this on another board, helps with keeping perspective:
1934 Great Depression
1935 Spanish Civil War
1936 Economy Still Struggling
1937 Recession
1938 War Clouds Gather
1939 War in Europe
1940 France Falls
1941 Pearl Harbor
1942 Wartime Price Controls
1943 Industry Mobilizes
1944 Consumer Goods Shortages
1945 Post-War Recession Predicted
1946 Dow Tops 20 - Market Too High
1947 Cold War Begins
1948 Berlin Blockade
1949 Russia Explodes A-Bomb
1950 Korean War
1951 Excess Profits Tax
1952 U.S. Seizes Steel Mills
1953 Russia Explodes H-Bomb
1954 Dow Tops 300 - Market Too High
1955 Eisenhower Illness
1956 Suez Crisis
1957 Russia Launches Sputnik
1958 Recession
1959 Castro Seizes Power in Cuba
1960 Russia Downs U-2 Plane
1961 Berlin Wall Erected
1962 Cuban Missile Crisis
1963 Kennedy Assassinated
1964 Gulf Of Tonkin
1965 Civil Rights Marches
1966 Vietnam War Escalates
1967 Newark Race Riots
1968 USS Pueblo Seized
1969 Money Tightens - Markets Fall
1970 Cambodia Invaded - Vietnam War Spreads
1971 Wage Price Freeze
1972 Largest US Trade Deficit Ever
1973 Energy Crisis
1974 Steepest Market Drop in Four Decades
1975 Clouded Economic Prospects
1976 Economic Recovery Slows
1977 Market Slumps
1978 Interest Rates Rise
1979 Oil Prices Skyrocket
1980 Interest Rates At All Time High
1981 Steep Recession Begins
1982 Worst Recession in 40 Years
1983 Market Hits New Highs
1984 Record Federal Deficits
1985 Economic Growth Slows
1986 Dow Nears 2000
1987 Record Setting Market Decline
1988 Election Year
1989 October "Mini Crash"
1990 Persian Gulf Crisis
1991 Communism Tumbles With The Berlin Wall
1992 Global Recession
1993 Health Care Reform
1994 Fed Raises Interest Rates Six Times
1995 Dow Tops 5000
1996 Dow Tops 6400
1997 Hong Kong Reverts To China
1998 Asian Flu
1999 Y2K Scare
2000 Tech Bubble Burst
2001 9/11 Terrorist Attacks
2002 Recession
2003 War In Iraq
2004 Rising Interest Rates
2005 Hurricane Katrina
2006 Real Estate Peaks
2007 ?????Take Your Pick, Subprime, Low Dollar...
And One Good Reason Why You Should Have been long:
$10,000 Invested in the S&P 500 Index in 1934 would have been worth over $21,000,000 before fees at the end of 2006"
Great news on CMM. I had decided to hang onto my shares...couldn't believe how much this gold stock managed to fall. Now opening in the mid 50c range. I must be dreaming, someone pinch me.
Based on new NI 43-101 resource report on Lamaque gold mine, based on 1.13 mil oz of gold reserves, and 10 year mine life, estimated CF is $745 million, NPV is $292 million (assuming $800 gold). Plus there are an estimated 3.4 mil oz in MI and inferred resources, not included in those #s. Much of infrastructure is in place, production will begin next quarter, 2 year ramp to full production.
Nice pop in DYII. According to their 10Q, they are delaying the china spin-off until they make more progress with the venture. Also interesting that they have a huge amount of old AR in dispute with insurance carrier over old billings for treating injured Texas workers. They have been winning 90% of the court cases but those are being appealed. Ultimately they could win $75 million more than they now carry on their books, as the lion's share of those ARs have been written off. (Total long term AR is carried on books at $18 mil.) That is huge considering that DYII's current market cap is only $80 mil.
From the 10Q:
Due to a number of factors outside the Company’s control, including changes 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 November 30, 2007. The amount of such additional collections could range from zero to an amount that could approach $75 million, which represents the ultimate amount that the Company could collect on its MDR accounts receivable as of November 30, 2007 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.
WOW, Just under 6 full trading days into the new year and the nasdaq is down 9%. Russell 2000 with small caps is down closer to 10%.
If this rate of decline were to continue, the nasdaq will be below 2000 by the end of next week. By mid-march we would be under 1000 on the nasdaq. Of course, I don't see that happening so it must get better, right??. I'm thinking we will see a bounce and just covered by MZZ position (ultrashort ETF of SP midcap 400.)