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FWIW, I think ORCT is headed much higher. It just got coverage from a second firm yesterday, CE Unterberg Towbin starting it at Buy with a target of $30. It also got initiated as a Buy by the Oberweiss newsletter. Today, it broke through the 50 day MA and it also broke the downtrend sind the earnings spike.
Longer term, the fundamentals point well above 30, so I'm holding all my ORCT through any spikes and pullbacks.
My worry about ABLE would be it would transform from a 1.5 million float highly volatile trading stock that tracks oil movements to potentially nearly 10 times the shares outstanding and primarily a company with travel plazas. I'm not sure how to value those travel plazas (why would such a company be worth 3 times more than what it sold for in February?) or why such a company would trade with high volatility and track oil as it has in the past. If a significant number of all those $3 shares get sold (which seems highly likely from the AAP seller getting that windfall), the float would increase dramatically and it would put heavy pressure on the stock.
Since apparently the AAP owner also is a large ABLE insider, it doesn't seem likely that the $3 share price would be increased in the deal. It seems like a fishy insider deal to me -- a red flag anyway. It also seems fishy that AAP paid about $7.50 per share to Harrington last December for about 40% of the company, about double the market price and above where the stock had ever traded before, for those shares.
In any case, ABLE would not be the same company any more, by far, after this deal, which I believe was supposed to be completed this month. All this is enough to keep me away from buying the stock at current levels.
I don't know how since it's private. I'm also not sure it's in the price, as ABLE has been traded by lots of people who have no idea about the dilutive dealings and just have traded it as a proxy for oil stocks.
It's mentioned here in a June 8k: http://biz.yahoo.com/e/050610/able8-k.html
It's pretty complicated but includes an enormous dilution of the small number of shares outstanding now. I think AAP is private, but all I know is in the filings.
That's the deal I was talking about yesterday. Extremely heavily dilutive self-dealing transaction where ABLE issues a ton of $3 stock to acquire AAP. I'd be very careful holding any ABLE.
No, there's a lot more dilution related to an acquisition of a related company and some other financings. Looked at it several months ago, and was amazed at the gigantic dilution planned, much at under $3. Lots of fishy stuff with it.
You may want to read the filings on ABLE. It's a real stinker, with tons of dilution in the $3 area and news out that they understated their loss and their financials can't be relied on.
I don't know if you guys listened to the conference call last night, but I think CNTF is headed much higher over the coming weeks/months. They currently have 2000 employees and are planning growth to 3400 by the end of 2006, and they mentioned targeting 100% year over year sales. This isn't a tiny microcap or a one-quarter phenomenon.
A Chinese wireless stock reporting earnings growth over 200% trading at a PE of 10 would have at least doubled or tripled overnight in the old days. In the current environment, it will take longer, but after the breakout on huge volume from its nice base formed over the last couple of months, I think it's headed a lot higher. I wouldn't sell the gap, but would accumulate more on pullbacks.
It's rare to find something with such huge growth at such a tiny multiple while still being large enough to garner lots of institutional interest and analyst coverage, all in a hot sector in an area of the world that will have enormous development in the coming years. This one's a buy and hold for me.
Did you get filled on your ORCT bid just above $20? Didn't see you report it. Bouncing back nicely today from that area. This consolidation after the rally from the low 12's is looking like a good base for the next move.
S&P came out with a Strong Buy rating on ORCT, and I suspect other firms will come out with coverage soon after their blowout results, elimination of debt, and strong guidance, along with the addition of the U.S. customer. 13 times forward earnings is ridiculous for 35%+ growth.
The more I look into ZVXI, the more I like it long term. It's pretty extended after yesterday's runup, but it looks good to accumulate on pullbacks for the long term. I got in early yesterday and sold some already -- will be buying back on pullbacks.
10 Reasons to own ZVXI
1) Despite the 90% jump yesterday, Zevex remains severely undervalued fundamentally. They reported a 52% revenue increase and .22 EPS for the quarter vs. a loss the previous year. With a run rate of .88 and 52% growth, one could argue a 52 PE valuation valuation of $45.76 -- some even value companies more aggressively with higher PE's based on a PEG over 1 and using higher forecasted earnings. Even a conservative 20 PE gets you $17.60.
2) The huge improvement in performance was across the company, not from 1 or 2 customers. ZVTI has 2 divisions. The Therapeutics division increased sales 59% over last year, led by a 600% increase in international sales fueled by the first recognition of revenues from their huge deal with their new distributor Numico in Europe. The Applied Technology division also had a huge quarter, growing 44% from the previous year.
3) Numico is the dominant nutrition conglomerate in Europe, with over $2 Billion in annual revenue. The deal with ZVXI is only for $7 million in annual revenue, or 1/3 of 1% of Numico's sales. I think ZVXI can count on Numico's financial stability, with upside potential from this deal in the future.
4) Zevex has a very sound balance sheet. Their working capital is over $6.5 million, and their book value is now over $15 million, or about $5 a share. ZVXI is cash flow positive, so they have no need to do a secondary or any form of dilution. They say in their 10Q: "We believe our sources of liquidity are sufficient for operations during the coming twelve months. These sources include our projected cash from operations and, if necessary, draw from our existing revolving line of credit." They have very little debt, with a debt/equity ratio of under .2. This is very different from other high fliers in the past that have huge losses, huge debt, and negative cash flow necessitating heavy dilution.
5) The combination of the new long-term Numico distribution relationship, the huge backlog for the Applied Technology division, the addition of a shift to their manufacturing, and the hiring of new employees ensure that this is not a one quarter wonder. The Numico revenue just started this past quarter, and will expand in the future. The Q4 portion of the backlog alone is amazingly about the same as all the sales for all of Q3 for the Applied Technology division. Management has stated that due to the expected growth, they're adding a shift and hiring additional personnel. The future outlook is very bright for ZVXI.
6) There are not many short-term traders with big profits to take. With the entire float turning over yesterday, and only 7,000 shares traded a day before that, most buyers are in from over $9 or $10. These new shareholders won't be quick to sell like they would if they were in from the 5's. Most stocks that have a high RSI have many short-term traders in from much lower taking profits.
7) Without any warrants or convertibles, Zevex has very little dilution. Fully diluted shares outstanding is 3,575,475 vs. basic shares outstanding of 3,407,290. With their positive cash flow from operations, they won't need to do any dilutive financing and won't have any future dilution except from their small employee incentive option plan.
8) With the aging population and improved medical technology making people live longer, ZVXI is in the right place at the right time. Their market will grow immensely in the coming decades.
9) With yesterday's big % price increase, many retail traders shorted ZVXI, as evidenced by all the "Strong Sells" on the Yahoo message board. As ZVXI moves higher, they'll be forced to buy to cover their short position and limit their losses. Judging from the lack of hyping posts on message boards, not many short-term traders bought ZVXI relative to other high fliers. That means few weak hands to sell, and many of today's sellers were shorts. With its tiny float, ZVXI can move up very quickly.
10) With its tiny market cap, Zevex has a huge upside. It's unique for such a tiny market cap company with such high growth potential to be cash flow positive. Because its market cap has been under $20 million, there has been no analyst coverage. As ZVXI grows and the stock price catches up with the fundamentals, analysts will begin to cover it and recommend it to their clients.
ZVXI will have pullbacks along the way, but judging from the fundamentals, ZVXI is headed much higher longer term.
I loaded up on it this morning in the upper 8's. Based on its report and outlook, ZVXI should be over $20 easily. Extreme value at current prices.
I understand. Keep in mind that ORCT has a history of being conservative in their guidance. In July, they guided down to .23 EPS for this quarter they just reported at .30, and virtually all of that was from their one customer. ORCT was trading over $28 before the warning: http://www.thestreet.com/_yahoo/markets/stocksinmotion/10232935.html?cm_ven=YAHOO&cm_cat=FREE&am...
So the stock drops from over $28 to the current $21's because of their downward guidance that they just blew out. Now, the one customer risk is gone since they've added the U.S. customer and have several more in the works. They've also paid off all their debt.
I think it's stronger and will be stronger short term than many expected because of the huge improvement in fundamentals over when it was $28+. Many analysts from many firms were on the cc, but only one has been covering it. That one had a target of $34 before earnings, and likely will increase that substantially. Others should initiate coverage soon after getting their position.
I don't want to hype anything either, but I think people are underestimating this company because of the unwarranted selloff last week.
Why do you expect them to generate only $1.25 next year when they've already guided to $1.50 for 2006 in their news release, with upside from new customers? They also guided to 35%+ EPS growth, so you could argue a much higher PE and thus a much higher price. Even 25 times $1.50 is $37.50, not the $29/32 area.
With their upped guidance and win of the U.S. customer (and interest from Asian carriers), you could argue ORCT should be trading in the low $50/share. The one-customer risk is gone now, and 35% guidance for growth and $1.50+ guidance for eps in 2006 justify a much higher valuation. I'm sure they're being conservative in their guidance and it could/should be much better.
I agree that fundamentally ORCT's a huge bargain here. Growth of 30% or so (with upside) in a growing market for a PE of around 10 is hard to find.
They told me they're considering issuing a reassurance statement, but it's tricky since they report earnings on Monday.
RBC analyst note after market on ORCT:
-Orckit is down sharply today on rumors that KDDI in Japan (ORCT sole current customer) will be scaling back orders.
- Based on KDDI's statements on its semi-annual results is seems triple play deployments that use Orckit's platform are on-track despite slower than expected subscriber adds due to co-location issues.
- I talked to management several times today and they reiterated the party line that there is no change to business fundamentals.
-Stock is obviously under suspect here yet our checks to date indicate business is on track and we expect solid 3Q05 and outlook is good with ongoing deployments at KDDI and expanding pipeline.
I called IR to confirm that "no material development has caused the stock price drop" and they're "still on track to report earnings on Monday." Looks like a great buying opportunity...
Did you get CAFE on the pullback to 7.53 yesterday? Or, better yet, CAFEW on the pullback under 3? I reloaded on CAFEW on the pullback under 3 and sold some of that over 5, but holding a big position that I'll lighten up on on further strength next week. CAFE holding 10 at the close and them closing after hours at 10.71 bodes well for next week.
Hope some here got CAFEW. I'm loving it...
I don't know. I haven't heard anything. The recent price drop straight down from over .50 is kind of a shock. I'll try to find out more information.
I think if some trading groups or hedge funds can get it through 10 tomorrow, that will cause some panic short covering and breakout buyers to buy in, resulting in another leg up. If, on the other hand, it can't break 10, it's due for a rest. Longer term, if WalMart does sign a long term contract with them for a good number of their stores, it could go much higher.
Could have made 50% from when I posted about CAFEW. It's been a great play today. Hope someone did it...
Those aren't CAFEW. Here are the details on CAFEW:
http://biz.yahoo.com/e/050520/cafe10-q.html
Extension of Warrants Expiration Dates
On April 1, 2005, Hosts Board of Directors approved the extension of the expiration dates of 1,150,000 warrants to purchase common stock issued on July 21, 1998 and 32,692 warrants to purchase common stock issued on June 21, 2001 (the Warrants). The Board extended both sets of Warrants until July 21, 2007, subject to further extension. The Warrant exercise prices of $5.50 and the other terms of the respective Warrants remain unchanged.
You may want to buy CAFEW instead or in addition. These are 5.50 warrants that expire July 21, 2007. Many mistakenly believe they expire July 21, 2005 because that's what it was before they extended them a couple months ago. Because of the confusion, they have very little premium now, even though they don't expire for 2 years.
If CAFE's in play tomorrow, CAFEW is a steal at the current price of 1.72. It's basically a 2-year call option on CAFE with a strike price of 5.50. It should go up dollar for dollar with CAFE, but the downside is limited, as it was at 1.32 last week when CAFE was at 3.15 (vs. 6.35 close today). I think the undervaluation on CAFEW here was caused by the misperception that many had, thinking they expire next week, when the last 10Q shows they extended the expiration 2 years to July 21, 2007. Many probably shorted it figuring on expiration next week, but they're in for a surprise and likely squeeze...
CAFE closed at 6.96 after hours, so it should be in play again tomorrow after today's big WalMart news.
DLKR moving nicely recently. Chart looks great as it moves away from low-priced based. Just released this news:
Delek Resources (OTCBB:DLKR) is pleased to announce that the company has signed an memorandum of understanding to acquire oil producing properties pursuant to the company completing due diligence. The acquisition will give the company substantial income and create value for shareholders. The company still has as its main focus the exploration of the lodgepole reefs which the company has announced previously. These reefs if successfully drilled may produce as much as 2000 barrels a day and as much as 4 million barrels per reef! And using the technology of our partners the company intends to drill its targets. The acquisition of production will complement the exploration as it will be in the areas the company has its exploration focus.
I posted that DECK broke its hourly downtrend and triggered a technical buy signal, making it a strong buy (when you combine with fundamentals). You replied that you disagreed because DECK did the same thing last Wednesday (to which I replied why I didn't think it was the same). I took that to mean you were saying I was wrong...
I also took your later assertion that "no one shorts 60% of the float to rip less than 30% of a stock's value" to be further emphasizing how silly my strong buy call was. It just rubbed me as being an "unpolite and aggressive" statement.
I probably just took your posts the wrong way, i_vitale. No worries. Good luck...
Thanks. I was just offended by being called wrong and then he continued to call me wrong when I was obviously right. Wasn't rubbing anyone's face in anything, but rather was looking for him to stop saying I was wrong. Just rubbed me the wrong way. Sorry for the distraction...
No -- never heard of TT...
How about today's continuation? DECK has rebounded over 10% from when I posted less than 2 days ago that the technicals indicated a buy and you immediately discredited my analysis by replying that you disagreed. I think a 10% move in less than 2 days qualifies as a good buy signal...
You think going from the mid-30's to the low 20's is "no dip"? You think any stock that has 60% of its float short has to go down more than the 40% cut DECK got while maintaining their full year EPS guidance? I think the high short interest rather indicates the possibility of a big short squeeze without a retest for the shorts to cover. While you continue to point out "mostly bearish" technicals, DECK continues to rally.
Any reasonable person would admit that my analysis was right, at least in the short term...
Does today's follow-through action give you the confirmation you were looking for? Sure looks good to me...
Nice to see DECK close near the day's high, up nearly 9%. That breakout from the hourly downtrend held and it even strengthened the rest of the day, though no guarantee it gets more followthrough. In any case, it was definitely the most positive day for DECK in quite a while...
The 50% plus shares short don't mean they can do whatever they want. Rather, it means there's more fuel to add to the buying as the trend reverses. Hopefully, the followthrough the next few days confirms a reversal and causes many of those shorts to bid the stock up...
DECK closed very weakly last Wednesday, closing well below the previous day's high. I think the key is the close holding above Friday's high and the hourly downtrend...
DECK broke its downtrend on the hourly chart, as well as Friday's high. A stochastic buy signal is also triggering today, making the technicals finally lined up to match the fundamentals as a strong buy.
Bought more DECK on Friday and holding strong. Also bought more MMGG for long term...
Added a little more deck 26.02...
Got some DECK 27.09 after 26.9 didn't fill... Hope that was a good move...
Per this old report (http://www.stocksontheweb.com/mmgg.pdf), the cost would be around $200-250 million. The exact amount will be determined by the in-process feasibility study.
They plan on using the feasibility study to get bank debt financing for the building of the mine. They're using the same team that conducted the feasibility study for the Skorpion mine in Africa, the lowest cost zinc producer in the industry. That team produced a bankable feasibility study to finance that mine and also executed it to get Skorpion into production.
There's some good info in this project update: http://biz.yahoo.com/bw/050318/185363_1.html. This essay also has some good info: http://www.stockhouse.ca/bullboards/viewmessage.asp?no=9361009&t=0&all=0&TableID=1.
I also created a MMGG valuation spreadsheet by taking the stock valuation methodology from that old stocksontheweb report (linked at top) and updating the numbers to current figures. I also added an alternative valuation model which takes the present value of the assumed after-tax cash flow from the zinc mine. They point to a current fair value of $7-15/share (for the zinc portion only) given the assumptions. PM me if you'd like me to email that to you.
Hope that helps...
DLKR got hit hard when the ASR/WSR joint venture, who were drilling very close by using the same technology partner, abandoned their hole after initially reporting they had hit what they believed to be an oil reef. The ASR/WSR test results didn't indicated commercial quantities of oil. When it looked like ASR/WSR had a good hit, DLKR moved up with them to .99. DLKR still hasn't even begun their own drilling, which is what the stock's all about.
DLKR should begin drilling this month. The price action from the ASR/WSR drilling, which is just a nearby venture that hadn't even had confirmed results, gives an indication how much it will move if/when they hit oil themselves. On their first hit, it will really fly. I've accumulated from .35 on up and am waiting for their drilling.
DLKR is much more speculative than MMGG because they haven't yet proven that they have oil, whereas MMGG has proven they have billions worth of zinc and other metals. However, the upside potential on DLKR is enormous if they do get some good hits. MMGG I just accumulate and am holding for long term, as they'll either produce the zinc and other metals for huge profits or they'll sell out to a major at a much higher price.
Joined you on DECK in the lower 34's.
Also bought some EXM around 18 -- they recently had a private placement at 21 and used the proceeds to buy and deploy more ships. They should earn near $6/share this year and look to have put in a pretty good bottom.
Also bought more MMGG, which I see as a tremendous bargain here in the 1.5-1.7 area, with about $3 billion of zinc proven as well as significant amounts of other minerals and a market cap of under $40 million, despite moving closer and closer to production (feasibility study should be done around the end of the year). Profit taking from the PP at $1 from over a year ago has kept the stock price down, but it should move up much higher once those sellers are done.
That's not quite true. Under Standard 3, you need a market cap of $50 million, with no price or income requirement:
http://www.amex.com/equities/howToLst/Eq_HTL_ListStandards.html
Only Standard 1 has an income requirement.
Here's one that just got listed in November at .42:
http://www.bizjournals.com/triangle/stories/2004/11/08/daily27.html
Breakout above .80 resistance now. Looks great...