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researcher and larry are you guys long HEAR?
re: mintbroker
I'm not familiar with the company, but I'm also curious if what they are doing is illegal.
Is there any evidence that they are promoting the stocks while dumping them?
If what they are doing is buying up shares of low float stocks and creating a momentum frenzy and then selling into that frenzy is that an SEC violation?
hweb that form 4 was filed for sales on Friday.
hweb I'm sorry to hear about the forced cover. It is pretty disappointing when you have no warning, and the broker can force a panic sell. That is definitely and eye opener. I'm thankful that I had enough cash available to avoid the same fate.
AWX has been a wild ride. Just an FYI on all of the halts. I may be wrong, but I believe the stock is hitting the up down limits which is causing it to be halted temporarily.
AWX - the way low float stocks have been running, I would guess it is more likely to be a trading phenomenon then potential liquidation. I joined hweb with a small short position.
re:mhh
I was interested in buying until I read the part about reducing the contingent consideration for the acquisition as well as writing down the related goodwill.
Based on that, I would expect a marked slow down in the data analytics business. It sounds like they've wrapped up some large projects, and I'm guessing they don't foresee replacing them anytime soon.
That is my interpretation, but I could always be wrong.
Russell 2000 continues its race higher. It surprises me how capital gets allocated.
The trailing twelve month PE ratios of the these major indexes is as follows:
Russell 2000-----89.12
Nasdaq 100-------25.73
S&P 500----------24.69
That information has been available in the 10q since they reported first quarter results on 5/9/18. If you had taken time to read the 10q, you would have know about this.
hweb if I can sort out the mistakes in the 10q it appears 2.8m was from license revenue. Licensing generated 2.1m in profit. Professional product and entertainment lost .47m.
hweb re: ford
Excluding the tax benefit. I getting closer to .02. Am I missing something?
So what PE and peer evaluation are you applying when you buy the 3x S & P 500 Bear etf? A three times etf that resets at the end of every day is about as pure a form of gambling as there is in the stock market.
The irony in this post is priceless.
re: HEAR - I sold 1/2 my position just under 15.
I joined you on MOSY, but I've taken profits. This q's gross margins benefited from some accting adj. Based on the 55% they mentioned in the CC. It appears the next qtr is most like going to fall in a range of .01 to -.03.
2morrowGains- I haven't followed AMS closely. Do you have a feel for why Gamma Knife contracts don't get renewed?
hweb2 they will see a significant impact from lower interest expense as well.
re: Hear
Larry that paragraph is what caused me to take a position even though the stock was up significantly. I think they will beat those numbers, and possibly by a wide margin.
re: LFVN - I looked at it last night. I think it is fairly close to fair value given that it is a multi level marketing company with fairly flat revenues over the past five years. The quarterly earnings and guidance for the next q do look good.
Hopefully for the longs it will make a run for that October high in the 6s.
re: hear
I jumped in on a small position in the 9s because I hate to chase, but that was a fantastic report.
re:QBAK
I thought the commentary was guarded, but one thing I noticed is that the Deferred Service Revenue-short term was up sequentially form $.834m to $1.234m. That should benefit storage revenue which is the the revenue piece that is producing income for the company. Based on that the 2nd q may be stronger then it sounds.
I can't verify the accuracy, but Fidelity is indicating that QBAK will report today. If they can report a strong qtr. maybe the low float crowd will pile into this one. I show a float of 1.2m shares.
TAIT earnings were a bit underwhelming. Based on a quick review it looks like gross margins were down a bit in the 4th q, and operating income was 81k.
It may not be a runner on these results, but it is still a great dividend play.
SMID 4th q eps were more like .02 exluding the tax adj.
re:BOSC
It was a great quarter. I'm trying to figure out why they are pursuing the share offering with YA. If I understand it correctly, it looks like they will increase the number of outstanding shares by 26%.
re: AIRT/ISIG
Good question. It wouldn't surprise me if they are working towards a controlling interest, but as you state it is an odd fit.
ISIG-AIRT filed another Form 4 purchase of 24k @ 1.65.
re: BDR
If I read it correctly, other then the gain on sale, it doesn't seem like it will be that beneficial to their operating results. The increase in lease expense will be close to a break even with the decline in interest expense in the first year.
Every year thereafter, their lease expense will more then double, so it will be a net negative to operating results after the first year.
re: historical precedents of markets
Are historical precedents relevant to our future when there has been no historical period that has involved the unprecedented stimulus and manipulation of both bond and stock markets by central banks?
Central banks have accumulated a significant portion of global debt which has led to an artificial rate environment. Thier accumulation of debt has forced capital into stocks.
The attempt to unwind those balance sheets is on the horizon, and that is why I believe the markets are showing cracks. The US began tapering its balance sheet last fall. The ECB is expected to end it balance sheet expansion in the fall of 2018, and Japan has quietly ended its monetary easing policy.
Their are many experts waiting for an inverted yield curve as a signal of a recession. Can we rely on that signal in an artificial rate environment?
Longer term interest rates have been manipulated by central banks expanding their balance sheets. We are about to enter a period where the unwinding of their balance sheets will likely have the opposite impact. If QE created artificially lower rates then the unwinding of such should lead to artificially higher rates. Is it possible that inverted yield curve signal will be distorted by the unwinding of QE?
My position, precedent my not be relevant in this unprecedented environment.
re: 1987
It took approx 6 weeks from the bottom on 10/19 to find the ultimate low for the S&P 500. It took until the middle of July in 1988 to fully recover.
re: 1987
Based on the charts, it appears the S & P bottomed on 12/4 after bouncing a couple of times.
Date Price Seq % Change
2-Oct 328.94
19-Oct 224.84 -32%
21-Oct 259.27 15%
26-Oct 227.26 -12%
5-Nov 256.09 13%
4-Dec 221.24 -14%
re amorotization:
Based on your comments that amortization is stupid and your belief that a food company is an example of that. You must believe that advertising dollars spent developing a brand name such as Doritos have no value in contributing to future sales. Therefore, why would a food company buy another food company? Why not just make a triangle shaped chip and put it in a bag?
The truth is it costs millions of dollars to create a brand with name recognition, and that multi million dollar investment brings recurring revenue.
When you buy a food company you pay them for the value of that brand which will continue to drive recurring revenue once you acquire it. You make a significant cash expenditure for the brand name which will continue to drive future revenues. It make complete and logical sense that you should match that expense against future revenues that will benefit from that cash expenditure. What doesn't make sense is to ignore that cash expenditure which has value towards future sales as if it never occurred.
Furthermore, it costs money to establish customer relationships and contracts with those customers. Saying that you aren't buying new customer relationships makes no sense. What do you consider sales and marketing expenses? Customers don't line up because you open your door. Those expenses are part of daily business expenses. When you buy another business you are paying them for the expenses they incurred in developing those relationships. Those relationships will continue to drive revenues after the acquisition. Thus, it makes perfect since that you should match that expenditure against those future revenues.
You state that amortization makes sense for a drug company.
What about a contract with a customer that makes you an exclusive supplier to that customer for a period of five years?
What about a backlog order to produce x amount of goods for a company in the future?
What about a license that generates royalties for a company? There are all kinds of licensing agreements (fast food, brand names, technology, drugs, etc).
Lets say that a license generates $10m a year for the next decade? Doesn't that have value that you would pay for as part of an acquisition? Why wouldn't you match what you pay for that license against the future royalties? You're certainly not getting it for free.
I can go on, but I don't see identifiable intangible assets any different then the concept of depreciation. You pay for an asset that has value in generating future revenues. Therefore, that expense should be matched against the revenues that they generate.
I guess we will have to agree to disagree.
wstl's intangible assets consist of product technology, customer relationships, trade names, and backlog derived from acquisitions.
I have a difference of opinion. I believe that product technologhy (ie patents), customer relationships (ie sales contracts), backlogs, etc. have a real measurable value that benefit future cash flows. I not as concerned about the timing of recognition as a willingness to neglect to recognize them as a legitimate cash outflow incurred to generate cash inflows.
Their non gaap earnings ex out the tax gain. I suggest you look at the WSTL earnings pr, they add back to operating income amortization expense which is something that should be added back, it is absurd not too, and SBC which is debateable but everybody does it so I do as well. There is no funny games going on with taxes to get that .09 eps in a seasonally weak quarter. They have plenty of NOL's I believe. I think WSTL is very attractive here, with and impressive balance sheet, good cost control, chance at .50-.60 earnings in fy 19, possible accretive acquisition coming using there cash, laser focused on being accretive as well. I could be wrong, but I think it is a good opportunity. All is just my opinion, and I could always be wrong though.
I don't understand why amortization is considered an absurd expense. The cash flow may be upfront, but that doesn't make it irrelevant. If Company A spends $100m developing a patent and is then acquired by Company B for $100m then you're basically saying that you can ignore the cost of that development over the life of that patent.
Lets assume that the drug acquired by company B generates $100m in income before amortization over its life. Company B paid $100m for that drug and generated $100m in income for a net cash flow of 0. The value of that cash flow is 0. By ignoring amortization you would have overvalued the resulting cash flow by $100m.
otcbargains & CPTMatt
To add a little more to what you're referring to. Since the beginning of 2008. The Fed, ECB and BOJ have increased their balance sheets from ~4 trillion dollars to ~14.5 trillion. The following chart shows the correlation between the S & P 500 and the growth in central bank assets.
The US is no longer adding liquidity and is very slowly reducing their assets. The ECB is expected to follow suit in September of this year. Printing money on this scale is unprecedented. It will be interesting to see if this little correction is a warning sign for the markets future. My personal view is that printing money is a pandora's box. It seems like it was a good idea today, but will ultimately prove to be a curse.
Our national debt has grown from 9.7 trillion at the beginning of 2008 to 20.7 trillion today. That is a heavy price to sustain a modest 2% growth out of a deep recession.
I picked up some ESIO at 20.5 as well.
RNsidersbuying re:HAYN
From that paragraph, it does appear they are estimating a one time loss of 19-20m for this tax law change, so your per share estimate looks correct.
Their estimate seems to be reasonable given the balance of there deferred tax assets and liabilities.
cliff re: index PEs
This is my understanding of the method by which they calculate an index PE ratio. The summation of the market caps of all the companies in the index divided by the summation of all the earnings of the companies in the index. (Note: These are gross amounts (not per share).)
For example, if you have an index of Company A and Company B
Company A market cap of 500m, trailing 12 months earnings of 50m. The company's PE equals 10.
Company B has a market cap of 50m and trailing 12 months earnings of .1m. The company's PE equals 500
Index PE (500m + 50m)/(50m + .1m) PE 10.97
If there was a third company in the index that loses money, then this is how wall street calculates the PE for the russell.
Company c has a market cap of 200m and trailing 12 months loss of -20m.
Index PE (500m + 50m + 200m)/(50m + .1m) PE 14.97
The number in the wsj calculates eps including losses.
Actual PE (500m + 50m + 200m)/(50m + .1m - 20m) PE 24.91
cliff
I don't really follow your reasoning. I see an index as ownership of a small slice of the amalgamation of all of its components. Cherry picking only the profitable companies doesn't reflect that you actually own a slice of the loses as well.
There are a lot SEC reporting companies that own multiple subsidiaries. Would you accept them reporting only the earnings of subsidiaries that make a profit?
hweb regarding the tax law changes. It depends on the balance of you're deferred tax assests and liabilities. Deferred tax assets and liabilities are setup using the prevailing corporate tax rate at the time (ie 35%). With the reduction in corporate rates to 21%. These assets and liabilities need to be adjusted to the current tax rates.
Thus, if you have a deferred tax liability you will have a gain. if you have a deferred tax asset then you will have a loss.
An example of a deferred tax liability is if you can take accelerated depreciation for tax purposes, but you're required to depreciate that asset over its useful life for GAAP.
An example of a deferred tax asset would occur if you have a GAAP loss during a given period. That loss can be used to offset future income (loss carry forward). Therefore, in the period in which that loss occurs you reduce the loss by the value of the tax loss carry forward and that results in a deferred tax asset.