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Thanks. I'm still long USEG.
New post from Avoidthegarbage (the one who was bearish on JBII when it was over $5): http://shortscreen.com/message-board/251-jbii-pk-another-52-week-low--jbi-inc--jbii-pk
After making 23.7% shorting PXP, I haven't looked back, so I have no idea what's going on with this company now. Good luck with it though.
Thanks, I should clarify:
I didn't write the VIC piece (though the author of it does quote part of my Q&A with AYSI management at the end of August). Also, he wrote that write-up back in October (new stock ideas aren't made public to non-VIC members for 45 days).
Also, not sure what a member mark is.
(Taking a page from Grease): Dear S****
I can't respond to PMs here, but feel free to e-mail me at impossibledistances@yahoo.com.
While I'm here, here is some AYSI info I posted on the company's Yahoo! message board a couple of weeks ago, expanded and updated:
Three objective, positive indicators about AYSI:
None of these predicts the future, but each is objective and based on quantitative analysis, not opinions -- mine or anyone else's:
- Via Audit Integrity, a company that forensically analyzes corporate financial statements using a proprietary system to quantify the risk of fraud on a scale from 0 (extremely high risk) to 100 (extremely low risk):
"Alloy Steel International Inc is currently rated as having Conservative Accounting & Governance Risk (AGR). This places them in the 88th percentile among all companies...".
Value: Value is a measure of a stock's current worth. AYSI has a current Value of $1.55 per share. Therefore, it is undervalued compared to its Price of $0.90 per share. Value is computed from forecasted earnings per share, forecasted earnings growth, profitability, interest, and inflation rates. Value increases when earnings, earnings growth rate and profitability increase, and when interest and inflation rates decrease. VectorVest advocates the purchase of undervalued stocks. At some point in time, a stock's Price and Value always will converge.
RV (Relative Value): RV is an indicator of long-term price appreciation potential. AYSI has an RV of 1.40, which is excellent on a scale of 0.00 to 2.00. This indicator is far superior to a simple comparison of Price and Value because it is computed from an analysis of projected price appreciation three years out, AAA Corporate Bond Rates, and risk. RV solves the riddle of whether it is preferable to buy High growth, High P/E stocks, or Low growth, Low P/E stocks. VectorVest favors the purchase of stocks with RV ratings above 1.00.
RS (Relative Safety): RS is an indicator of risk. AYSI has an RS rating of 0.65, which is poor on a scale of 0.00 to 2.00. RS is computed from an analysis of the consistency and predictability of a company's financial performance, debt to equity ratio, sales volume, business longevity, price volatility and other factors. A stock with an RS rating greater than 1.00 is safer and more predictable than the average stock in the VectorVest database. VectorVest favors the purchase of stocks of companies with consistent, predictable financial performance.
RT (Relative Timing): RT is a fast, smart, accurate indicator of a stock's price trend. AYSI has a Relative Timing rating of 1.70, which is excellent on a scale of 0.00 to 2.00. RT is computed from an analysis of the direction, magnitude, and dynamics of a stock's price movements over one day, one week, one quarter and one year time periods. Once a stock's price has established a strong trend, it is expected to continue in that trend for the short-term. If a trend dissipates, RT will gravitate toward 1.00. RT will explode from bottoms, dive from tops, and reflect changes in price momentum. VectorVest favors the purchase of stocks with RT ratings above 1.00.
VST (VST-Vector): VST is the master indicator for ranking every stock in the VectorVest database. AYSI has a VST rating of 1.35, which is very good on a scale of 0.00 to 2.00. VST is computed from the square root of a weighted sum of the squares of RV, RS, and RT. Stocks with the highest VST ratings have the best combinations of Value, Safety and Timing. These are the stocks to own for above average, long-term capital appreciation. VectorVest advocates the purchase of safe, undervalued stocks rising in price.
Recommendation (REC): VectorVest gives a Buy, Sell, Hold recommendation on every stock, every day. AYSI has a Buy recommendation. REC reflects the cumulative effect of all the VectorVest parameters working together. These parameters are designed to help investors buy safe, undervalued stocks rising in price. They also help investors avoid or sell risky, overvalued stocks falling in price. VectorVest recommends that investors buy high VST-Vector, Buy-rated stocks in rising markets.
My Interpretation
So the sales shortfall appears to be due to technical difficulties with their new mill. Demand for Arcoplate remains strong but they can't get enough made. This is a serious issue if they can't fix the mill. If they resolve their manufacturing issues then the company can return to serious profitability, however. Problems with the mill may have contributed to the reduced gross margin. This happened in the Summer of 2009 as the 2nd mill came on line. Some steel and electricity was wasted as they tuned and adjusted the new mill.
A third mill is not yet in production and management doesn't want to clarify whether a third mill has been built. I believe that a third mill has been built but they are having technical difficulties getting it to make a slightly different version of the product. I do not want to reveal what that difference is to protect the company's competitive position. I'm not absolutely certain that the third mill has been built, however.
The resignation of the CFO is simply because the growth of the company demands a full-time CEO. The resignation of Alvin Tan is at the request of the CEO as he was a nominee of the outgoing CFO, Alan Winduss. This still seems a bit unusual to me but not an incredible explanation.
A response has been made to the FINRA inquiry. I personally never took the FINRA inquiry too seriously. A person trading on inside information could be in trouble but I wouldn't expect more than a small fine and a warning to the company if they let some information slip out.
In reviewing 10-K's for the last 10 years I don't see any sign of self-dealing or self-enrichment on the part of the CEO or the CFO. Gene Kostecki is paid a $150K salary and of course gets the 2% royalty as well. There's no stock options or bonuses paid to the CEO and the share count has been constant for many years. The CEO owns over half the shares outstanding and has not bought or sold shares for years. The outgoing CFO owned 11% of the shares himself and was not a trader of the stock either. They've had plenty of opportunity to profit as the stock has bounced between $0.20 and $3.00 and they haven't taken advantage of their inside knowledge. I find their salaries reasonable and believe Gene has done a reasonable job building the business. I believe Gene's two sons work in the business but I don't know any details on their compensation.
I believe with the addition of the new CFO some changes have taken place. I suspect he advised that more onerous Sarbanes-Oxley requirements were kicking in beginning with the fiscal 2011 year beginning Oct. 1, 2010. This explains going dark at the end of September. The company has decided to use existing cash and cash flow for the Indonesian land purchase and mill construction rather than an equity raise at depressed prices. [...]
In conclusion, I find this situation fraught with uncertainty but not fraught with risk. The below book value stock price more than reflects the mill performance risk and the resignations and investigations don't amount to much. Management has skin in the game here too which reduces the risk of long-term self-enrichment without creating shareholder value. The upside is big as the business can be a cash machine [elsewhere in the write-up the author breaks down why he thinks it can be a cash machine].
Risks:
1. There may be some fire creating all the smoke
2. Competition could arise especially as key patents expire in about 5 years
3. This is a tiny company run by an Australian engineer and not a professional business manager. Hopefully the new CFO will mitigate this risk.
4. Rumors are that Australian wear-plate competitors are cutting prices to try to regain some market share in Western Australia. This may put pricing pressure on Alloy's margins.
5. The apparent difficulties with the new mill could be prolonged or result in poor quality product that damages the company's reputation.
More on JBII from Avoidthegarbage
Some of you may remember that Avoidthegarbage posted his bearish take on JBII back when it was trading over $5 per share: http://shortscreen.com/message-board/78-just-a-quick-thought-for-short--jbi-inc--jbiie-ob
This is Avoidthegarbage's latest post -- it's mainly about another stock, but he does offer some comments about JBII there as well: http://shortscreen.com/message-board/244-djsp-disaster-reaches-some-clarity-djsp-enterprises--djsp
OTCQX is mainly a marketing ploy, as I explained here: http://steamcatapult.com/2010/10/03/the-pink-sheets-then-and-now/
Pink OTC Markets sells companies that meet pretty minimal requirements (e.g., not being bankrupt, having a share price above 10 cents per share, being an operating company, reporting current information in some form, etc.) the right to be placed on the OTCQX for a $5k application fee plus a $15k annual fee.
There are mega cap foreign multinationals that prefer to trade on the "Pink Sheets -- Current Information" tier rather than pony up $15k annually to join the same tier as JBII.
Some metrics don't discriminate against Pinks/OTCBBs
The AGR doesn't discriminate. It gave a score of 88 to another Pink Sheets stock today.
The Pink Sheets aren't why JBII has a low AGR score. The score isn't based on that. And there are some Pink Sheets stocks with very high AGR scores.
Accounting and Governance Risk for JBII
Audit Integrity, Inc. offers a widget on its website where you can enter a stock symbol and pull up that company's Accounting and Governance Risk (AGR). Audit Integrity describes AGR as follows:
The Audit Integrity Accounting and Governance Risk (AGR®) rating is a forensic measure of the transparency and statistical reliability of a corporation’s financial reporting and governance practices. The focus of AGR analysis is on identifying the measures most highly associated with fraud, and quantifying those risks for interested stakeholders in relation to company stock price, securities litigation, and major restatement probabilities.
Audit Integrity applies over 100 accounting and governance metrics to a company’s publicly filed information. The resulting calculation produces the AGR, a percentile score ranging from 0 to 100, with corresponding ratings from Very Aggressive to Conservative. Companies rated Very Aggressive or Aggressive have proven to be much more likely to face class action litigation and financial restatements, and to suffer severe equity loss. Conversely, those companies that have been consistently rated Conservative have been shown to be the most trustworthy.
JBI, Inc. is currently rated as having Very Aggressive Accounting & Governance Risk (AGR). This places them in the 8th percentile among all companies, indicating higher accounting and governance risk than 92% of companies.
A bearish perspective on DJSP
Courtesy of Avoidthegarbage: http://shortscreen.com/message-board/filter/djsp/1
The last company he called as a short candidate is down ~80% since then.
The Altman Z"-Score predicted TRMA would go bankrupt
Back in January. I covered my short of it way too early: http://shortscreen.com/message-board/238-bankrupt-as-predicted-by-altman-z-score-in-january-trico-marine-services-inc-trma
Zero, due to the red flags
I alluded to previously.
You're welcome.
Although the claims about the conversation with the DEC appear to be largely accurate, I would be wary of some of the red flags associated with this company.
Yes, I did speak with Larry Sitzman.
And I'll get to his comments in a moment. But first, I'd like to point out something about the tier of the Pink OTC Markets JBII trades on, the OTCQX. I've done some research on this and it appears that the primary difference between companies on the OTCQX and those on the "Pink Sheets -- Current Information" tier is that OTCQX companies pay Pink OTC Markets a $5k application fee and a $15k annual fee to get an OTCQX listing. It's not uncommon to find stronger companies on the "Pink Sheets -- Current Information" tier than on the OTCQX (e.g., some foreign multinationals). More details on that here: http://steamcatapult.com/2010/10/03/the-pink-sheets-then-and-now/
Now, on to Mr. Sitzman. I called him and asked him if he'd reply via e-mail to the claims made here. His response is below in bold, the italicized part is my initial message to him, and everything else in plain text is the claims I copied and pasted from this board:
---------------------------------------------------------------------------------------------------
David - There was a little literary license taken with the comments attributed to us but nothing too bad. My comments are below in bold
>>> DaveinHackensack <******@yahoo.com> >>>
Larry,
Thanks for agreeing to review the comments about JBI, Inc.attributed to your department in the message board post I've copied and pasted below and let me know which (if any) are accurate. Incidentally, here is the link to post I copied and pasted below, and here is a link to a post where a commenter attributes the DEC information to you (albeit, misspelling your last name).
Best Regards,
Dave
A friend of mine validated with a similar conversation to the DEC emailed me today and ask me to respond to this post with his detils [Sic]. He said he read the post asking if anybody else validated it and wanted me to respond since he doesn't have as much time for the boards as I do (lol). I've known him for around 10 years so I trust his info.
Anyway, yes, he received similar info.
Additional info from the DEC:
1. JBII's process is a "completely green process" (their words)
I don't know how one would define a "completely green process". There are air pollutant emissions from the heating source used to heat the plastic. The fuel used is natural gas and tail gas from the process. This is why they need a permit from the NYS Department of Environmental Conservation.
2. They've never seen anything like it.
This is true. JBI said this was the first unit in the country and we haven't been able to disprove that. Based on their design, we allowed a temporary start up of the equipment to collect emission information.
3. JBII will be the first and only ones in the country with anything like this.
True as far as we know
4. The DEC is extremely excited to have a new industry born in New York and under their watch.
I'm from Western New York, center of the rust belt. Of course new industry is exciting
5. DEC expects no further hiccups going forward in getting the permit (their words).
We are waiting for the emission testing results and a permit application but we haven't seen anything to date that would make us stop the process
6. They expect future permit applications to be a breeze in the state of New York (their words). They expect, but cannot promise of course, that getting permits in most other states will also be easy because most of them have similar criteria and can use their data.
Everything gets easier after it's done the first time. However, local issues may slow down or stop any proposed project.
7. The same guys from the DEC who have been on site working with them are the same guys who are involved with processing the application. They don't see anything wrong with the process or they themselves would ahve spotted it.
We have visited the site and watched the equipment in operation. While we are still awaiting the emission test report, we have seen no red flags to date.
8. They expect NO comment period because the emission levels they expect in the report to be substantially below the levels that would require a comment period.
I suspect this is true but can't promise until we receive a permit application. The public comment period is only 30 days though.
9. They have seen numerous others try and every single one of them fail to do what JBII is doing. None of them even made it to the stack test stage because they failed so miserably sooner whereas JBII not only made it, but preliminary data suggests they passed with flying colors.
We have discussed many other pyrolis units with applicants and may have even received a few permit applications but none in our area have installed and operated equipment.
Yeah, I know Bruce bought more.
That could just be pride f*cking with him though.
Out of AIB puts for a 116% gain: http://shortscreen.com/message-board/235-out-of-aib-puts-for-a-116-gain-allied-irish-bank-aib
Einhorn's presentation was just brutal.
And there's been no convincing rebuttal from management or from Berkowitz. I closed out my puts today, but I might consider shorting the stock on a dead cat bounce.
Out today for a 39% gain.
If I'd had longer-dated options, I would have loved to hold them longer: http://shortscreen.com/message-board/232-david-einhorn-moves-the-market-st-joe-co-joe
Dark companies are on a different tier
Dark companies are on the “Pink Sheets: No Information” tier.
AYSI is on the “Pink Sheets: Current Information” tier.
Sources: http://www.otcmarkets.com/stock/aysi/quote
And: http://www.otcmarkets.com/pink-sheets/learn/otc-market-tiers
"[AYSI] having ZERO requirements whatsoever on the Stinky Pink Sheets"
Wrong, actually. AYSI is on the Pink OTC Markets "Pink Sheets: Current information" tier, which is limited to
Companies that follow the International Reporting Standard or the Alternative Reporting Standard by making filings publicly available through the OTC Disclosure & News Service pursuant to Pink OTC Markets Guidelines for Providing Adequate Current Information (pdf) are designated as Pink Sheets Current Information.
"[AYSI] is a loooooooooooong ways to go to qualify to get off the Pink Sheets"
Really? It seems to be that they are basically one $20k check to Pink OTC Markets from getting on the OTCQX tier. These are the OTCQX requirements:
# Ongoing operations (no shells, blank check or special purpose acquisition companies);
# A minimum bid price of $0.10 (for preceding 90 business days);
# The company may not be subject to any bankruptcy or reorganization proceedings;
# The company must be duly organized, validly existing and in good standing under the laws of each jurisdiction in which the company is organized;
# At least 50 beneficial shareholders, each owning at least 100 shares of the Company's common stock;
# Ongoing quarterly and audited annual financial reports posted on OTCQX.com, a premier website for qualifying companies (SEC Registered issuers can use EDGAR); and
# Inclusion in the Standard & Poor's Corporation Records or Mergent Manuals (fka Moody's Manuals), which satisfies the Blue Sky requirements for secondary transactions in many states, together with a list of any other states in which the security is Blue Sky compliant and eligible to be sold by brokers in those states;
# DAD Letter of Introduction upon application process completion and quarterly and annually thereafter to Pink OTC Markets Inc. confirming that the issuer has made adequate current information publicly available and meets the tier inclusion requirements.
Application Fee
* $5,000
Annual Fee
* $15,000
Source: http://www.otcqx.com/otcqx/otcqx/listing
Here's the reality:
1)Pink OTC Markets (i.e., the company that until 2008 was called Pink Sheets, LLC, or, more commonly, The Pink Sheets) runs all of these tiers: http://www.otcmarkets.com/learn/otc-market-tiers
2) Any stock that trades on anyone of those tiers, including the OTCQX, gets a .PK extension on its ticker symbol identifying it as a Pink OTC Markets / Pink Quote stock.
3) The OTCQX tier is a way for Pink OTC Markets to charge companies $15k per year to differentiate themselves from other companies that don't meet several fairly basic requirements (e.g., don't be bankrupt, have a share price above 10 cents, etc.). You can see the full list of requirements at this link ( http://www.otcqx.com/otcqx/otcqx/listing ), but note that being registered with the SEC and fully reporting to the SEC are not among the listing requirements of the OTCQX.
The only audited financials OTCQX stocks are required to provide are annual reports; quarterly reports can be un-audited.
4) AYSI, in its press release announcing its voluntary de-registering ( http://finance.yahoo.com/news/Alloy-Steel-International-prnews-3379482593.html?x=0&.v=1 ), said it "intends to continue reporting its unaudited quarterly and audited annual financial results". So, since you are content investing in .PK companies that only offer audited financials annually, AYSI.PK offering financial reporting on the same basis (audited annually; unaudited quarterly) should be sufficient for you.
False. OTCQX doesn't mean fully reporting to SEC or registered with the SEC. The Pink Sheets tier that indicates a company is registered with and fully reporting to the SEC is the OTCQB. That's from the Pink Sheets website; see the second paragraph here: http://www.otcmarkets.com/otcguide/index.jsp
Here are the listing requirements of the OTCQX tier, again from the Pink Sheets website: http://www.otcqx.com/otcqx/otcqx/listing . There's no requirement for the company to be registered with the SEC. The main reporting requirement is that the company provide quarterly un-audited financial reports and annual audited reports, which is what AYSI said in its announcement that it would be doing.
AIB down ~20% overnight in Ireland on news of second government bailout; government could end up owning 90% of the company: http://shortscreen.com/message-board/222-another-52-week-low-for-aib-intra-day-allied-irish-bank-aib
Wrong, you're putting words in my mouth.
I never called it "a great thing" that the company is going to the Pink Sheets; on the contrary, I said it was disappointing. But I also said that it was understandable that, given the low valuation the stock was getting on the OTCBB, the company would be reluctant to continue to incur the costs of staying on the OTCBB.
Again, it doesn't predict stock prices in the short term. But it can tell you whether a company is financially distressed and at risk of bankruptcy or not.
AYSI's strong Z-score means I was able to place a buy order Wednesday confident that although the stock is down, the company is financially strong.
When a company's share price drops as far and fast as AYSI's has, there are two possibilities:
1) The drop in the share price accurately reflects a similarly steep deterioration in the company's fundamentals.
2) The drop in the share price is an over-reaction based on negative sentiment, and does not reflect a similarly steep deterioration in the company's fundamentals.
AYSI's strong Z-score suggests possibility 2) is the case. The "excellent" relative value rating VectorVest gives AYSI suggests this as well.
The company has business in Indonesia.
So why would you be surprised that the CEO was in Indonesia when I called? Recall that he was in Indonesia when I first called the company in August to arrange a conference call with them, as I noted on my blog on 8/24. Apparently, he goes to Indonesia a lot, which makes sense considering that's the location of the company's planned expansion.
VectorVest's latest report on AYSI
Some of you may remember that a few months back I asked VectorVest to add AYSI to its database. Below is VectorVest's current analysis of AYSI.
The VectorVest system combines a weighted average of three metrics: relative value (RV), relative safety (RS), and relative timing (RT). It overweights timing (i.e., price action) and underweights valuation.
Mainly because of AYSI's awful price action recently, VV gives it a sell rating -- the sinking share price gives AYSI an awful RT and a bad RS, since RS is based partly on price action too.
But VV does consider AYSI to have an excellent relative value (RV), as it considers the stock to be worth $2.68 per share. In my experience with VV, its RV calculations have been the most accurate of the three, maybe because its earnings estimates have been the most accurate.
A specific example, WRT AYSI: when it was first added to the database, VV gave it an earnings estimate of about 17 cents I sent an e-mail to VV noting how much AYSI had earned in the first half of the year, and suggesting this earnings estimate was too low. It turns out that VV's estimate was a lot closer to what AYSI will earn this year than mine or any other long's was. So I am inclined to give more weight to their earnings and RV calcs, which are driven in part by their earnings estimates.
I haven't seen as much predictive value with their RT scores, which in my experience seem to be more reactive.
Below is VV's report. FYI, anytime a stock trades below VV's stop price for it, it gets a sell rating. For AYSI to get a hold or a buy rating from VV, it will need to rise above VV's stop (which itself can be adjusted up or down):
------------------------------------------------------------------
VectorVest Stock Analysis of Alloy Steel as of 9/29/2010
This report has five major sections.
Capital Appreciation Analysis
Dividend Analysis
Price-Volume Data
Sales / Market Capitalization Information
Summary
Business: Alloy Steel, (AYSI) Alloy Steel International Inc, engages in the manufacture and distribution of Arcoplate, a wear-resistant alloy overlay wear plate. The company offers fused-alloy steel plates for installation and use in structures and machinery that suffer wear and hang-up problems. Its customer base consists of companies involved in the mining industries primarily in Australia, the United States, South America, India, Indonesia, Singapore, South Africa, Japan, China, Canada, and Malaysia. Alloy Steel International markets its Arcoplate products primarily to consultant engineers to incorporate Arcoplate materials into their equipment and plant designs. The company was founded in 2000 and is based in Malaga, Australia.
Business Sector: AYSI has been assigned to the Steel Business Sector. VectorVest classifies stocks into over 200 Industry Groups and 40 Business Sectors.
Industry Group: AYSI has been assigned to the Steel (Alloy) Industry Group. VectorVest classifies stocks into over 200 Industry Groups and 40 Business Sectors.
Capital Appreciation Analysis Back to top
Value: Value is a measure of a stock's current worth. AYSI has a current Value of $2.68 per share. Therefore, it is undervalued compared to its Price of $0.49 per share. Value is computed from forecasted earnings per share, forecasted earnings growth, profitability, interest, and inflation rates. Value increases when earnings, earnings growth rate and profitability increase, and when interest and inflation rates decrease. VectorVest advocates the purchase of undervalued stocks. At some point in time, a stock's Price and Value always will converge.
RV (Relative Value): RV is an indicator of long-term price appreciation potential. AYSI has an RV of 1.57, which is excellent on a scale of 0.00 to 2.00. This indicator is far superior to a simple comparison of Price and Value because it is computed from an analysis of projected price appreciation three years out, AAA Corporate Bond Rates, and risk. RV solves the riddle of whether it is preferable to buy High growth, High P/E stocks, or Low growth, Low P/E stocks. VectorVest favors the purchase of stocks with RV ratings above 1.00.
RS (Relative Safety): RS is an indicator of risk. AYSI has an RS rating of 0.63, which is poor on a scale of 0.00 to 2.00. RS is computed from an analysis of the consistency and predictability of a company's financial performance, debt to equity ratio, sales volume, business longevity, price volatility and other factors. A stock with an RS rating greater than 1.00 is safer and more predictable than the average stock in the VectorVest database. VectorVest favors the purchase of stocks of companies with consistent, predictable financial performance.
RT (Relative Timing): RT is a fast, smart, accurate indicator of a stock's price trend. AYSI has a Relative Timing rating of 0.04, which is very poor on a scale of 0.00 to 2.00. RT is computed from an analysis of the direction, magnitude, and dynamics of a stock's price movements over one day, one week, one quarter and one year time periods. Once a stock's price has established a strong trend, it is expected to continue in that trend for the short-term. If a trend dissipates, RT will gravitate toward 1.00. RT will explode from bottoms, dive from tops, and reflect changes in price momentum. VectorVest favors the purchase of stocks with RT ratings above 1.00.
VST (VST-Vector): VST is the master indicator for ranking every stock in the VectorVest database. AYSI has a VST rating of 0.91, which is fair on a scale of 0.00 to 2.00. VST is computed from the square root of a weighted sum of the squares of RV, RS, and RT. Stocks with the highest VST ratings have the best combinations of Value, Safety and Timing. These are the stocks to own for above average, long-term capital appreciation. VectorVest advocates the purchase of safe, undervalued stocks rising in price.
Recommendation (REC): VectorVest gives a Buy, Sell, Hold recommendation on every stock, every day. AYSI has a Sell recommendation. REC reflects the cumulative effect of all the VectorVest parameters working together. These parameters are designed to help investors buy safe, undervalued stocks rising in price. They also help investors avoid or sell risky, overvalued stocks falling in price. VectorVest recommends that investors buy high VST-Vector, Buy-rated stocks in rising markets.
Stop (Stop-Price): Stop is an indicator of when to sell a long position or cover a short position. AYSI has a Stop of $1.10 per share. This is $0.61 above AYSI's current closing Price. A stock's Stop is computed from a 13 week moving average of its closing prices, and is fine-tuned according to the stock's fundamentals. High RV, high RS stocks have lower Stops, and low RV, low RS stocks have higher Stops. In the VectorVest system, a stock gets a 'B' or 'H' recommendation if its Price is above its Stop and an 'S' recommendation if its Price is below its Stop.
GRT (Earnings Growth Rate): GRT reflects a company's one to three year forecasted earnings growth rate in percent per year. AYSI has a forecasted Earnings Growth Rate of 34.00%, which VectorVest considers to be excellent. GRT is computed from historical, current and forecasted earnings data. It is updated each week for every stock in the VectorVest database. GRT often foretells a stock's future price trend. If a stock's GRT trend is upward, the stock's price will likely rise. If GRT is trending downward, the stock's Price will probably fall. VectorVest favors the purchase of stocks whose GRT is rising and is greater than the sum of current inflation and interest rates, as shown weekly in our investment climate report.
EPS (Earnings per Share): EPS stands for leading 12 months Earnings Per Share. AYSI has a forecasted EPS of $0.25 per share. VectorVest determines this forecast from a combination of recent earnings performance and traditional fiscal and/or calendar year earnings forecasts.
P/E (Price to Earnings Ratio): P/E is a popular measure of stock valuation which shows the dollars required to buy one dollar of earnings. AYSI has a P/E of 1.96. This ratio may be deemed to be high or low depending upon your frame of reference. The average P/E of all the stocks in the VectorVest database is 46.78. P/E is computed daily using the formula: P/E = Price/EPS.
EY (Earnings Yield): EY reflects earnings per share as a percent of Price. EY is related to P/E via the formula, EY = 100 / (P/E), and may be used in place of P/E as a measure of valuation. EY has the advantages that it is always determinate and can reflect negative earnings. AYSI has an EY of 51.02 percent. This is above the current average of 2.12% for all the stocks in the VectorVest database. EY equals 100 x (EPS/Price).
GPE (Growth to P/E Ratio): GPE is another popular measure of stock valuation. It compares earnings growth rate to P/E ratio. AYSI has a GPE rating of 17.35. High growth stocks are believed to be able to justify high P/E ratios. A stock is commonly considered to be undervalued when GPE is greater than 1.00 and overvalued when GPE is below 1.00. Unfortunately, this rule of thumb does not take into account the effect of interest rates on P/E ratios. The operative GPE ratio of 1.00 is valid when and only when interest rates equal 10%. With long-term interest rates currently at 3.45%, the operative GPE ratio is 0.12. Therefore, AYSI may be considered to be undervalued.
Worth noting, as well that he's a full-time CFO, unlike the previous CFO, whose full-time job was running his own accounting practice. Part-time CFOs are fairly common in start-ups; the transition to a full-time CFO often occurs as companies grow.
First, Pink Sheets doesn't necessarily mean less liquidity.
Consider that the volume in AYSI.PK today was about 6x or 7x the average daily volume of AYSI.OB over the last three months. And there are other Pink Sheets stocks that are more liquid than AYSI ever was on the OTCBB.
Second, illiquid private companies cam still have plenty of value. I own shares of one myself. It's not Facebook, but it's a small Inc. 5000 company that's profitable and growing.
I haven't tried to sell it, because I am bullish on its long term prospects and content to see the company continue to grow, but if I wanted to, I'm confident I'd get a decent valuation for my shares on Second Market or from another current shareholder. There are plenty of investors who invest in illiquid private companies. Your initial comment that the value of a company necessarily goes to zero if it's illiquid is completely false.
Meetings the rest of the day,
But will try to reach him this week.
Has anyone gotten around to verifying these claims?
Out of curiosity, I just tried calling Larry Fitzman at the DEC, but he's in a meeting now. If I get a chance later, maybe I'll ask him if he indeed made the 9 statements below attributed to his department and whether he still stands by them.
A quick Z-score tutorial for Brig
So we can just link to this post next time you ask whether the Z-score takes _____ into account.
The Altman Z-Score model uses these five terms:
T1 = Working Capital / Total Assets
T2 = Retained Earnings / Total Assets
T3 = Earnings Before Interest and Taxes / Total Assets
T4 = Market Value of Equity / Total Liabilities
T5 = Sales / Total Assets
And weights them this way:
Z Score Bankruptcy Model:
Z = 1.2T1 + 1.4T2 + 3.3T3 + .6T4 + 1T5
If you don't see it above, it's not in the Z-score.
Wrong
A drop in share price does impact the Z-score, as I explained to you yesterday: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=54903786
And the Z-score doesn't predict day-to-day stock gyrations any more than it predicts malicious message board comments about a stock. It predicts whether or not a company is likely to go bankrupt within the next two years.
Is it legal to falsely state earnings? The Yahoo! message board commenter says that's what the brochure writer did. I'm not a securities attorney, but I can see how making a false claim about a company's earnings might be illegal.
Are you sure about this?:
"JBII has not been promoting P20 to the masses"
A commenter on JBII's Yahoo! Message board claims the company's P20 and other ventures were promoted via an illegal brochure: http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_J/threadview?m=tm&bn=109773&tid=682&mid=682&tof=19&frt=2
David Merkel on AIB:
"DIfficult to see the $AIB equity being worth much when the jr debt is trading between 40-70 cents on the dollar"
More info: http://shortscreen.com/message-board/222-another-52-week-low-for-aib-intra-day-allied-irish-bank-aib