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CTGI:
I posted yesterday about this stock, anticipating a steady increase in price because of excellent earnings. Today's action (slightly down) was surprising to me and very disappointing. There was little follow through from yesterday, and as the day wore on volume dried up.
Perhaps there will be a delayed reaction. On the other hand, the market may not believe that the company's growth can be sustained in a rising interest rate environment and a possible (likely?) slowdown in the housing market.
Whatever is going on, I decided to sell.
Steve
rruff, floridahockeyman re HOM:
HOM having another good day. May close at or above $2.
Thanks to both of you for posting about this stock.
Steve
CTGI:
Q2 earnings $.30/share, up 39% year over year; revenue up 29%.
http://biz.yahoo.com/bw/050726/265289.html?.v=1
Trailing earnings are now $.75, and it looks like the company will do $.85-$.90 for full year 2005. I expect the stock -- now $7.50 -- will work its way up toward $9.00+.
Steve
VPHM:
Conference call on earnings, 8/3 at 10:00 a.m. ET.
http://phoenix.corporate-ir.net/phoenix.zhtml?c=92320&p=irol-EventDetails&EventId=1106293
Steve
STV:
Sold what I had last week for $11.30 per share. Judging from today's gains, it looks like STV will join the ranks of the stocks I sold too soon. In that club already: IPII, ERS, NGPS, among others.
Need to rethink my approach. Too prone to cash out when I have quick gains.
Steve
floridahockeyman re HOM:
I took a look at this stock after reading posts from you and rruff on 7/11, and have bought quite a few shares. I have done very well in the two weeks or so I have owned it, and think it is still quite undervalued.
Steve
CTGI:
Has done well since 7/11 mention in IBD ("10 Highest Rated Stocks Under $10"), and having a particularly good day today, perhaps because of news on existing home sales.
My guess is that the numbers for Q2 are going to be outstanding.
Steve
MSGI re VPHM:
I guess mention in IBD can't hurt.
A decent percentage of the posts this weekend on the Yahoo board are actually informative and helpful -- not always the case. And even as we focus on the Q2 earnings report, I agree with the poster over there, linked below, who wants to remind us of the big picture:
http://finance.messages.yahoo.com/bbs?.mm=FN&action=m&board=7077380&tid=vphm&sid=707...
I don't know what will happen to the stock tomorrow, or next week, or in August, but I have a strong sense that by the end of the year $11/share will seem long ago and far away.
Steve
Bobwins re VPHM royalty payments:
I will be very interested in what you learn.
What I have understood is that, speaking hypothetically, if VPHM makes the entire payment of $10.5 million to Lilly in Q3, about $107,000 would be a charge to earnings in Q3 (i.e., $10.5 million divided by 98, the remaining number of quarters in the overall amortization period) and in every quarter subsequent. But I'll grant you the 10-K and Q don't say exactly that, at least not in language that I can understand. The treatment of this subject in the SEC filings is opaque to me, but then so is much of what accountants say. At the same time, I guess the language is really mysterious to me if the entire $10.5 million is to be treated as a charge during the quarter(s) paid.
Incidentally, I am actually assuming that VPHM made some royalty payments (or became obligated to do so, at least) to Lilly in Q2.
If the entire Lilly payment will be a charge in the quarter(s) paid, it seems to me that VPHM will have a very difficult time reaching $1 in earnings in 2005 without further milestone payments from Schering Plough (i.e., Pleconaril).
And when all of this, together with Monte Carlo simulations, gives me enough of a headache, I retreat to the idea that what really matters at this point is Vancocin sales levels. If sales are good/great, it seems to me there is nothing to decide with the stock at $11/share.
Steve
Len:
Frankly, I did not pick 6 that I thought were likely to produce the best returns over the next 6 months. My criteria was to pick 6 that, IF they happen to succeed, will succeed big. Unless I get real lucky with a couple of picks, I will be very surprised if the 6 I picked will do as well as Mr. Sheep. I will also be very surprised if Mr. Sheep wins the contest. And since there is no glory in second place . . .
It will be interesting to see just how essential it is to pick a stock or stocks that is/are picked by only a small number of participants. Intuitively it seemed to me that it was essential, if one really wanted to come in first.
Steve
VPHM:
I just noticed there is a problem opening link that is included in this message. Let me try again:
http://finance.messages.yahoo.com/bbs?.mm=FN&action=m&board=7077380&tid=vphm&sid=707...
Sorry.
Steve
Bobwins re VPHM:
At page 8 of the latest 10-Q, under the heading "Intangible Assets," the following appears:
"In connection with the acquisition of Vancocin, Lilly is entitled to royalty payments through 2011, the amount of which is determined by annual net sales. We will account for future royalty payments as contingent consideration and will record an adjustment to the carrying amount of the related intangible asset and a cumulative adjustment to the intangible amortization upon achievement of the related sales milestones."
At page 45 of the latest 10-K, the following appears under "Intangible amortization and acquisition of technology rights":
"Intangible amortization was $0.7 million for the year ended December 31, 2004. Intangible amortization is the result of the Vancocin product rights acquisition in the fourth quarter of 2004. We had a valuation study performed by a third party, based on information provided by management, to determine the allocation of the estimated purchase price of the Vancocin acquisition among the intangible assets acquired as well as their estimated amortization period. The following table represents the allocation of costs to the assets acquired, the related intangible assets useful lives and the amortization expense included in the 2004 consolidated statement of operations:"
This is followed by a table that places the estimated life of all intangible assets, except starting inventory, at 25 years.
I have understood, and others have as well, that, for earnings purposes, the royalty payments will be amortized over 25 years. I have seen the propriety of this debated by posters on the Yahoo board (see, e.g., messages in and around 30315 and 30318), but it has apparently been blessed by the auditors.
I agree it is significant, and if I have it wrong, apologize in advance.
Steve
(in thousands)
Assets acquired Fair value of intangibles Estimated life
(in years)
--------------------------------------------------------------------------------
Amortization for the twelve
months ended December 31,
2004
--------------------------------------------------------------------------------
Starting material inventory
$ 1,022 — $ —
Trademarks
10,473 25 58
Know-how
73,308 25 407
Customer relationships
33,228 25 185
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total
$ 118,031 $ 650
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
rruff re VSYS:
Next week I expect to buy back the shares that I sold, hopefully in the $.70-$.75 range. But for the reason you describe, I do not want to wait too long. The next news -- hopefully positive -- could be more substantive, and, if so, it will be tough to buy in below $1, let alone at current levels. I have a day job, and am away from the action for hours and sometimes even days at a time, and I cannot afford to be too cute here. However, the recent publicity that shot the stock to $.95 or so, seemed a complete non-event to me.
Finally, while I don't know exactly what it means, I did like reading the following sentence from the PR:
"'MESH is being specified and quoted at increasing numbers of Homeland Security related sites,' noted Stephen Pineau, President and CEO of Viscount."
Steve
tubberclare re VPHM:
Very little to add to Bobwins' and MSGI's remarks except to note for earnings purposes that the royalty payments to Lilly in Q3 and Q4 are to be amortized over 25 years. Thus, while the payments are a hit to cash, they should not have a big impact on earnings.
All that I will be looking at is Q2 revenues from Vancocin sales. I am expecting that Q2 revenues will be good/great, and that revenue guidance for the balance of 2005 will be upbeat. I also have a feeling that future price increases may be possible without impacting demand levels.
Below is a link to a post from Yahoo message board, by a poster that has studied the numbers carefully, commenting on Piper's numbers. My guess is that his numbers are closer to the truth than Piper's; however, whichever numbers you believe, if my math is correct (!), when you back out the one time derivative charge the adjusted number for earnings should reach to the high teens that Bobwins noted.
http://finance.messages.yahoo.com/bbs?.mm=FN&action=m&board=7077380&tid=vphm&sid=707....
Steve
rruff re VSYS:
FWIW, I bought a relatively modest amount of this stock in early June. I actually sold half today when I learned of the publicity. I don't object to the publicity, but question whether the price increase has staying power. I fully expect that I'll be buying these shares back soon. I guess my bet is that they will be cheaper next week.
I also think that this stock has real upside potential during this calendar year -- 100%++ if things go well. Although that's a big if, it seemed a good candidate for the Pick Six contest.
Steve
VSYS:
This may explain some of today's buying:
http://biz.yahoo.com/iw/050720/091222.html
Steve
rruff re VSYS:
Nice to see this stock having another good day. Good for portfolio and good for Pick Six. I note that you have this one on your card too.
Steve
MasterPicker1 re PLCC:
I have not seen an announcement, and don't know the exact date. The company is on a calendar year, so presumably we will hear something by 8/15.
Steve
researcher59 re PLCC:
Thanks very much for the analysis. I have had a really tough time trying to get a handle on it, but what little I have been able to piece together on my own has suggested that the number should be huge. Glad to have your better informed view, with all of its caveats. The stock still looks dirt cheap at $15.
Steve
researcher59 re PLCC:
PLCC having a big day today. Do you have any sense of just how good the earnings will be, even if just a guesstimate?
Thanks.
Steve
BPTR:
New contracts announced. May give a boost to the stock today.
http://biz.yahoo.com/bw/050719/195222.html?.v=1
Steve
Len re Survey:
I understand. I just hope one of the days we can do it right before the market opens. The half hour after the close is in the guts of the business day here in Calfornia.
Steve
Len:
I hope there will be a time in the early a.m. -- say, before the open -- when the survey can be filled out. For us left coasters with a day job, that would be a great time.
Steve
Bobwins re VPHM royalty payments:
As I understand it, these royalty payments are being amortized over something like 25 years. While the cash obviously has to be paid out on a current basis, the hit to earnings from these payments will not be significant.
Steve
Bobwins re VPHM:
The numbers from Piper have been unintelligible all along, and continue to be. If pressed, presumably they would point to "seasonal" factors in Vancocin sales to justify future earnings estimates. However, from what the company has been saying, I have serious doubts that sales will slow in the second half of the year.
I can't help but think that Piper has an agenda here, but then again I distrust all "analyst" projections. It sure looks like the firm is trying to hold down the price of the stock for some reason.
Presumably the projected Vancocin sales figure for Q2 is close to accurate. That's a pretty good number -- $29.3 million.
Steve
nutsaboutgolf2001 re MPAD:
I made the mistake of leaving a message for the CFO through someone who is supposed to be the investor relations contact. It turns out I should have emailed human resources!
Anyway, thanks for the report. Maybe if they hear from enough stockholders, they will do something visible next quarter to get out the word. Kind of frustrating -- the stock should be over $10.
Steve
VPHM:
While there is no doubt that MSGI gets all the credit for bringing this stock to everyone's attention, I may qualify as his earliest initiate. All shares purchased between 5/12 and 5/23 at an average price of $3.88 per share -- 159% gain in less than 2 months.
Seems to me conversion selling must be about over by now, and that $15 may be within reach by the end of the month.
Thanks again, MSGI. Awesome stock.
Steve
nutsaboutgolf2001 re MPAD:
I have a call in to the company, inquiring whether there will be a PR. The CFO is supposed to get back to me. We'll see if he does.
If/when I speak to him I will be letting him know that there is more than just money involved. I have MPAD in the Pick Six.
Steve
CULS, NGPS:
I have posted about these stocks recently. FWIW, I sold CULS on 7/7 after announcement of June sales, and sold NGPS yesterday.
I have a tendency to sell too early, and may have done so with these. Both closed yesterday higher than what I sold for. But I had quick gains in each, and decided to take profits.
Steve
10 Highest Rated Stocks Under $10:
Nice to see STV and CTGI on the list. I own both.
Steve
OT: WPTE:
I will be interested to see if the $700 million shows up, and, if so, whose money it is and what the terms of the deal are.
This offer, and the way it was presented -- complete with poker icon Brunson -- suggests to me we may be in the late innings of the poker phenomenon. I am no good at calling the top on these things, but it does not seem a good entry point to me.
How have the ratings for the WPT show been this season compared to last? Are Sexton and Van Patten (and Shana Hiatt!) under long term contracts? Would be curious to know.
I note also that the major networks are starting to get in on the act:
"LOS ANGELES (Zap2it.com) CBS is betting that interest in televised poker isn't on the wane, teaming up with a promoter to televise poker tournaments in which amateur players get a chance to match wits with pros.
The network has signed a deal with ProJo Poker Enterprises to televise eight ProJo tournaments and four specials. First up will be the 'ProJo Christmas Poker Classic,' airing in the afternoon on Dec. 25.
With the deal, CBS is making the biggest push yet by a broadcast network into the world of televised poker. Although NBC has aired a couple of specials in the past, poker has been largely a cable phenomenon, providing ratings boosts for networks ranging from ESPN ('World Series of Poker') to Bravo ('Celebrity Poker Showdown') to the Travel Channel ('World Poker Tour').
ProJo Poker stages its tournaments with amateur players in mind, offering relatively low buy-ins and keeping professional players out of the early rounds. Eight invited pros join the tournament in the semifinal round, playing at one table while the eight top 'average Joes' play at another. The last four remaining at each table square off in the final. ProJo's 26-tournament schedule awards a total of $40 million in cash and prizes.
As part of the pact, CBSSportsLine.com will set up a poker area where people can play for free and take a shot at winning prizes and spots in ProJo tournaments."
Incidentally, I like the poker shows and watch often, and my wife plays online; as consumers, we are among those that have been drawn in. However, it just seems to me that, from an investment standpoint, the easy money has already been made, and that there are significant downside risks. For a month or so prior to the Brunson offer, WPTE was in decline. I owned CRYP for a time, but sold in April; the last month has not been kind to that stock either.
http://www.investorshub.com/boards/quotes.asp?ticker=cryp&qm_symbol=CRYP&symbol=CRYP
Steve
VPHM:
Post from Yahoo message board with perspective on the importance of HCV-796, a promising drug in the VPHM pipeline for treatment of hepatitis C infected patients:
http://finance.messages.yahoo.com/bbs?action=m&board=7077380&tid=vphm&sid=7077380&mi...
In May, VPHM announced the commencement of phase 1b testing. Results are expected in Q4 2005.
Steve
UBET:
UBET is a leading provider of online horse race wagering. Significantly, in its public filings, the company has stated that it "believes that its Internet-based platform could easily be modified to accommodate wagering on other live events such as car racing, soccer and football."
The stock is up about 15% since we started the Pick Six contest, and my guess is it will continue to do well during the next month in anticipation of good Q2 earnings. The company last gave guidance in April, and subsequent PRs re handle during the triple crown season suggest that the guidance was conservative.
This is clearly a growth stock, and it has a hefty PE. My sense, and certainly my hope, is that the company is getting out ahead of the competition, and readying itself to be a leader in response to a development that, sooner or later, seems inevitable -- the legalization everywhere of online wagering on live sports events of all kinds. If Q2 earnings are good, I plan to add significantly to what is already (for me) a respectable position in the stock.
http://www.investor.reuters.com/CompanyOverview.aspx?ticker=UBET&target=%2fstocks%2fquickinfo%2f...
Steve
PLCC:
FWIW, PLCC mentioned in interview with CEO of Leica Geosystems re hostile takeover offer for Leica. Apparently PLCC recently bought about 6% of the company:
"INTERVIEW:Leica CEO: Hexagon Offer Unlikely To Succeed-2
11:29 AM ET July 6, 2005
'The bid was presented in a very aggressive manner', Hess said, pointing to several terms and conditions such as the fact that Hexagon only needs to get 50% of Leica's shares to take over the whole company.
Though Leica strongly rejects Hexagon's offer on pricing and strategic grounds, the battle could be prolonged, the CEO said. 'It's not over yet. Hexagon could raise the bid or other parties could enter the game', Hess said.
Earlier Wednesday, Leica's chairman Mario Fontana said that Hess will stay at the helm of the company until the takeover threat is resolved. Hess had initially planned to step down in the coming months.
Shares of Leica were up CHF1.25, or 0.3%, at CHF465.25 in late afternoon trade. The shares have remained above Hexagon's offer price for several days, reflecting the market's hope that a third party could launch another bid or that Hexagon might raise its offer. Hexagon, however, has repeatedly said it doesn't intend to pay more for Leica.
Hess also said he had spoken to U.S. shareholder Paulson Capital Corp. (PLCC), which told him the investment company sees its investment in Leica as a longer-term play, suggesting it doesn't support the bid.
Paulson recently bought a 6.2% stake in Leica for around CHF450 a share.
'We find it very exciting that somebody would buy our shares at CHF450 with the intention of value creation and capital gain', Hess said.
He also said that the company has good relations with U.S. investors, pointing to K Capital Partners, which holds around 9.9%, according to the latest disclosure report."
Steve
10 bagger:
Thanks much for this post. Got in at the open this morning for $71.10. Looks like it will be the low of the day. Amazing growth.
Steve
Bobwins re VPHM:
If this is not JATO, I'm looking forward to the real thing.
Steve
NGPS:
Up another 5%+ today. Additional announcements.
Steve
CULS:
Up another 10%+ today on good volume, prior to announcement of June sales figures.
Steve
floridahockeyman:
Glad to see your post. Recall your contributions to the IIIN board on CBS Marketwatch.
Hope you will weigh in here from time to time on stocks of interest to you.
Steve
Day 1:
Appropriately, UBET (one of my several wildcards) got out of the starting gate fast today, up 6%. Unfortunately, all other picks either came out running backwards, or refused to leave the gate at all.
One pick, VSYS, went up 10% on June 30 and back down 12% today. Ouch. "The gods too are fond of a joke." - Aristotle
Hoping all have a happy and safe holiday weekend.
Steve