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researcher and footwedge, re TCCO
I was holding this one into the annual earnings report in November and was surprised to see it rocket to $7 on the news. They earned .11/share in fiscal Q4 and basically warned for Q1. With a little over a month left in Q1, the CEO said:
"The engineering services component of revenue slowed during the current quarter, but we anticipate that it will improve during the later quarters of fiscal 2005."
Then when the 10K was released at the end of December, it was revealed that backlog had dropped sequentially from $1,390,000 to $950,000. Seemed pretty risky to hold into the Q1 report.
Knowledge, re ARIS
I sold it a few weeks ago...and the stock hasn't done anything since. That's why I was worried I was losing my touch!
Even though ARIS should have a couple of terrific bottom line comps coming up, I was disappointed to read in the 12/16 PR that they're only expecting low-mid single digit revenue growth for the year. That, combined with the weak balance sheet, made me think the stock might be stuck in the mid-$2's for awhile.
footwedge, re WIRX
I don't know. That news had the opposite effect on me. An alliance with a pink sheet company trading at .002 made me feel less confident about WIRX. Maybe because they've been promising a PR campaign since that interview last summer...and that news with HPON is all they have to show for it.
WIRX up 31%!?! I was starting to think I was losing my touch of selling a stock right before it zoomed. Whew!
livin, you can use stock screeners or if you're really gung ho, check the news wires each day. I scan businesswire, prnewswire, and marketwire each morning and night...as well as have a news streamer on my Level II screen during the trading day.
VSTY seems fairly valued. Before the tax benefit, it looks like they earned .31/share last quarter. That's their big quarter, so don't know if the other earnings reports will move it much. Good growth and a solid balance sheet, but it looks like they'll earn .30-.35/share for the year (before tax benefits), so current P/E of 20-25 seems appropriate.
Len, I used to pay more attention to what a stock had done...but I found I was often missing the boat. If a $1 stock announces a huge turnaround with quarterly earnings of .10/share and they're confident that the numbers will continue to improve...I don't care if the stock was at .25 last month...I'm jumping on it because I think it could be trading at $2-$3 next month. If it does drop below $1, I'll gladly add more shares.
Now when I'm accumulating a stock, and the news I expect to move the stock is several weeks off...then I will pay more attention to the chart. No need to chase it if there is plenty of time for a pullback. Also depends on how undervalued I think the stock is. If only slightly undervalued, definitely no rush. If I think it's extremely undervalued, I may buy a few just in case it keeps going up...but hoping it drops so I can take a larger position.
wade, re CFK and WSTF
I'm surprised CFK has done so well after earnings. They had a great quarter, but I think traders are ignoring the seasonality. The figures were presented in Canadian dollars, so Q4 earnings were more like .13/share. Q1 should be about .14-.15/share (on the CC, they said Q1 may be slightly better than Q4). But then they enter their 2 weak quarters. Earnings will drop to more like .05-.08/share.
WSTF had a strong Q4 as expected. If you take away a couple of charges, they actually earned closer to .30/share. But that's their seasonally best quarter. Upcoming Q1 is typically the weakest. 10K had an interesting nugget of info...said first 2 months of Q1 were tracking 14% ahead of last year. So should have a favorable comp coming up, but earnings probably in the .05-.10/share range. With the stock in the low $5's, I don't see much of a pop on that report.
noligfromwithin and bucfan, re ACY
Without the $1,727,000 gain in Q4 from sale of aircraft and aircraft engines, they would have reported a large loss in the quarter. So not the next AIRT from a fundamentals standpoint. But with its tiny shares O/S, traders may have some fun with it.
rrat, re PIHC
I'm looking forward to the numbers on Wednesday. Hoping for Q2 earnings of .05/share on $8M+ in revenues. Would be a very favorable comp vs. last year. If they're bullish on the CC about further growth in the second half of the fiscal year, think the stock could see $2. As you noted, the stock has risen from the $1.30's to $1.60 in recent weeks. Hopefully the accumulation is by someone in the know!
wade, re FORD
Yes, the insider selling is a concern. Michael Schiffman has been selling for awhile (and at much lower prices), so I don't think he's a good indicator. But other insiders (including the CEO) are now selling. If you look at where the stock has been for the last few years, it certainly would make sense for them to take some profits. Or maybe they believe last quarter's results aren't sustainable? But we were thinking the same thing...so should be no surprise. I wouldn't hold into the next report as I think Q2 earnings will be more like .15/share...and then even lower in Q3 and Q4.
crk, I wish there was a simple valuation model to use! I rely on my experience of looking at thousands of stocks over the years and seeing how they performed after a good earnings report. What made some of them go up while others were left in the dust?
There are many criteria to use when evaluating a stock. Even when investors have similar strategies, they can be equally excited about one stock and in total disagreement about another. For me, P/E ratio is the most important metric. When a company reports a sharp increase in profits, I ask myself where would this stock trade if they can sustain (or hopefully further improve) the numbers. I like to use an annualized P/E of 10 (trailing P/E would be better...but harder to find) for my projections. Others may prefer P/E's of 15 or 20, but I'd rather be conservative.
Then I modify my fair value target based on my factors. How fast is the company growing revenues and earnings? Obviously, companies with faster growth rates deserve higher P/E's. I think bottom line growth is more preferable to top line growth, as a big EPS improvement with minimal revenue change will still attract attention. The problem is when there is no growth in sales or earnings. In that case, a P/E of 10 is probably too ambitious.
Then you have to look at the balance sheet. What's the tangible book value (goodwill is meaningless)...how much cash per share? Companies with lots of cash on the books should trade at a premium to their balance sheet-challenged peers. Some people like to look at the debt/equity ratio, current ratio, etc. I haven't found those measures particularly useful, but if it's working for them...then great!
When determining if the last earnings report was sustainable or a 1-quarter wonder...what caused the sharp increase in the numbers? Did management provide some bullish commentary in the last earnings PR? If there was a conference call, did they offer any guidance? Any seasonality to the business? Any 1-time gains/losses? If backlog and/or new order rates are provided, how do they compare to the last few quarters?
Still so many things to look at. Where is the stock traded? Listed stocks almost always trade at a premium to their OTC:BB brethren. What sector are they in? This is less important than it used to be. The biggest winners typically came from the tech sector, but look at how apparel stocks like TRLG.OB and ISAC.OB have surged over the last year. Are the earnings taxed...if not, when will they be? Are insiders buying or selling? Any potential negatives buried in the SEC filings...such as a bunch of options now in the money that will dilute EPS? Are the upcoming comps going to be easy or tough?
That should be enough to get you started. Happy hunting! Let us know what you find...
Nice find, gilead. Not only did they highlight the outperformance of microcaps, but particularly value microcaps! Looks like the word may be getting out about our successful strategy. The upside potential that exists with smaller stocks is tremendous. Why buy a large cap fund that MIGHT be up 5-10% this year (and probably won't even beat the S&P 500)...when you can trounce the market averages if you're willing to put in the time. And by focusing on microcaps with fundamentals, we're eliminating 95% of the junk on the OTC:BB...and limiting our downside risk considerably.
The microcap market is often inefficient, allowing investors who do their homework an opportunity to get in early. Also easier to research a smaller company...as you can read all the company's news, crunch the financial numbers, make sense of the SEC filings, email the CEO, etc. Individual investors can actually be on a level playing field with Wall Street for a change. I can't possibly know more about what's happening at IBM or MSFT than the legions of Harvard MBA's covering each company for the big brokerage houses. Instead of buying their recommendation...a stock with 10% growth and a P/E of 30, I'd much rather buy a stock with 30% growth and a P/E of 10.
Nice close on PDGE! Right at the high of the day. Wouldn't surprise me to see this one bust out further next week to $2. Can't believe we were able to load up in the low $1's after the company posted Q3 earnings of .09/share in December on 103% revenue growth and a huge backlog.
I just picked up some JMIH as well. Was hoping for a dip to the .20's before what should be a good earnings report next month.
Wow! LMIA at $5.90 and still going strong. Some sizable blocks at the ask...while I'm taking profits. Where were all these buyers last week? Could have had all the shares they wanted in the low $4's. Guess they weren't reading this board.
:)
Knowledge, re JMIH
EPS unchanged due to rounding, but revenues would be up 20% with net income up over 100%. Plus they should provide some upbeat comments about the rest of the fiscal year.
LMIA up in the $5.40's! Was in the low $4's last week. Apparently there was a segment on CNBC that talked about the soaring demand for business jets.
From last earnings PR:
Sales for the Sheet Metal segment in the third quarter of 2004 were $19.4 million, an increase of 34.7 percent from $14.4 million in the third quarter of 2003. The increase was primarily due to higher sales of business jet components. As previously reported, weakness in demand for business jets in 2003, reflected by production stoppages by several LMI customers and their subsequent aggressive inventory reduction strategies significantly reduced business jet sales in 2003 and the first quarter of 2004. However, increasing production rates of business jets commencing in the second quarter of 2004 as well as an award of significant new work by Gulfstream to several LMI plants resulted in higher business jet component sales in the third quarter of 2004.
OT--arnie, thanks for reminding me. Now asking .05! Sold all my MYCO for a tax loss last month at .02. :(
Wow! Thanks gilead for the informative post on JMIH. Glad to hear there isn't any seasonality. Excellent news that Q2 will be similar to Q1! If they post Q2 earnings of .01+/share next month, stock should move up to the .40-.50 range.
Anyone still following BNSO or TIII? Was scanning my watchlist for stocks that will be reporting earnings by mid-Feb...and these two may be worth keeping an eye on. They will most likely report flat comps, in which case the stocks will do nothing. But there is a chance earnings could be better than last year...and the stocks could pop.
BNSO reported Q1 earnings of .12/share and Q2 earnings of .13/share. Flattish comps vs. the prior year. Upcoming Q3 report should be an easier comp, as they earned .11/share in the prior year. I believe the second half of their fiscal year is slightly weaker, but BNSO announced a deal with Sunbeam on 9/27/04 to manufacture their Health O Meter scales (PR at bottom of post). This could have a very positive impact on Q3. If they earn .13/share vs. .11/share last year...considering they have over $2/share in cash on the balance sheet, the stock could see $6-$7.
TIII earned .05/share last quarter, which is typically their best quarter of the year. Revenues and earnings were down from the prior year. But management's comments seemed a little more bullish than usual. Instead of cautioning about industry trends having an adverse effect on sales, CEO said they were positioned for profitable growth in the future. They seem to be successfully diversifying away from copper-based products into broadband and fiber optic products. For a $1.50 Nasdaq stock, they've got a terrific balance sheet. Tangible book value is $1.29, including .45/share in cash. Tough revenue comp coming up, but if they are able to post Q2 earnings of .03-.04/share vs. .02/share last year...stock could see high $1's.
Bonso Electronics Announces Agreement with Sunbeam to Produce Bath Scales under the Health o meter(R) Brand
MONDAY, SEPTEMBER 27, 2004 8:30 AM
- PR Newswire
Sep 27, 2004 /PRNewswire via COMTEX/ -- HONG KONG, Sept. 27 /Xinhua-PRNewswire-FirstCall/ -- Bonso Electronics International, Inc (BNSO) , a designer and manufacturer of sensor based and telecommunications products, announced today that it is manufacturing bath scales and Body Fat Monitors for Sunbeam Products, Inc. being sold under the Health o meter(R) brand.
Anthony So, Chairman, CEO and President of Bonso Electronics stated, "We believe the combination of Bonso's engineering, production and technical capabilities, the retail distribution and marketing capabilities of Sunbeam and a strong consumer brand like Health o meter(R), provides the retailer and consumer with a powerful choice in the bath scale and Body Fat Monitor business."
Mr. So further stated, "We believe the relationship leverages both company's strengths and we are very excited about the potential growth prospects for Sunbeam and Bonso."
About Bonso Electronics
Headquartered in Hong Kong, Bonso Electronics designs, develops, manufactures assembles and markets a comprehensive line of telecommunications products, electronic scales and weighing instruments. Bonso products are manufactured in the People's Republic of China with customers primarily located in North America and Europe. Company services include product design and prototyping, production tooling, procurement of components, total quality management, and just-in-time delivery. For further information, visit the company's website at http://www.bonso.com.
About Sunbeam Products, Inc.
Since the introduction of its first electric appliance in 1910, the Sunbeam(R) brand has grown to a position of leadership in the consumer goods industry. The company has made numerous contributions to the industry through both product innovation and product improvements. Sunbeam's original appliance, an electric iron, was produced in 1910 to offset the seasonal nature of the clipping and shearing business. Further diversification occurred in 1920 when the company brought out the first automatic lawn sprinkler marketed in the United States. Electric toasters were added in 1922, coffeemakers in 1929, and the famous Sunbeam(R) Mixmaster stand mixer in 1930. The latter established the company as a major factor in the small appliance and consumer goods industry.
Over the years, the company has added many more products to its portfolio and earned a reputation as an innovator. Sunbeam's product innovations have included the governor-controlled food mixer, controlled heat immersible fry pan, cap-type hair dryer, fully automatic radiant controlled toaster, oscillating blade electric shaver, automatic vacuum-type coffeemaker, and the In2itive(R) "smart" blender.
Today, Sunbeam Products, Inc., a subsidiary of American Household, Inc., is a leading global consumer products company that designs, manufactures, and markets, nationally and internationally, a diverse portfolio of consumer products under such world-class brands as Sunbeam(R), Oster(R), Mr. Coffee(R), and Health o meter(R). Sunbeam Products, Inc. has manufacturing facilities in the U.S., Mexico, and Venezuela, with over 3,000 employees worldwide. Each strategic business entity of Sunbeam Products, Inc. - Appliances, Health, and Personal Care and Comfort, holds dominant market shares in their respective products.
Sunbeam Products, Inc. is entering an exciting period as it moves into a new era of growth. Armed with one of the world's strongest portfolio of brands that are synonymous with innovation, quality, and durability, and with widespread recognition of those brands, the company is poised to lead the industry.
The statements contained in this press release which are not historical fact are forward looking statements that involve certain risks and uncertainties including, but not limited to risks associated with the uncertainty of future financial results, seasonality of scales of certain products, additional financing requirements, development of new products, government approval processes, the impact of competitive products or pricing, technological changes, currency fluctuations, estimates of market growth, the effect of economic conditions and other uncertainties detailed in the company's filings with the Securities and Exchange Commission.
For more information about Bonso, please contact
In US - George OLeary
Tel: 1-949-760-9611
Fax: 1-949-760-9607
In Hong Kong - Cathy Pang
Tel: +852-2605-5822
Fax: +852-2691-1724
SOURCE Bonso Electronics International Inc.
In USA, George O'Leary, +1-949-760-9611, or fax,
+1-949-760-9607, or in Hong Kong, Cathy Pang, +852-2605-5822, or fax,
+852-2691-1724, both of Bonso Electronics International Inc.
MSGI, re WIRX FORD
FORD's earnings saw a huge increase because their cases were packaged with many new Motorola and Nokia phones. So I wouldn't look for similar results from WIRX. They should have a good Q4, I just don't think it will be a blowout quarter like FORD had. But if WIRX was somehow able to post Q4 earnings of .08-.12/share...the stock would certainly get a pop to the $3's.
MSGI, re WIRX
I've been selling as I think the stock is fairly valued at $2.60. But if the FORD traders continue to jump in...who knows how high it will go.
HEIIE looks like a turnaround candidate. Q1 earnings of .05/share vs. a loss. Q1 revenues up 29%. Earnings mostly from other income (although they had a similar amount from other income in the year ago quarter). Plus they've got an "E". But sounds like turnaround will continue. Might be one to watch.
OT--I'm still waiting to see if TELT gets that $45M from the Swiss shell company at the end of this month. LOL
anadotcom, re CTIG
That CEO interview sure sounded upbeat. I'd check it out if you haven't already. Tried to post some of the highlights in a post earlier today. I forgot to mention his comment about expanding out of the communications sector and into the financial segment. Said a number of conversations were planned in the next 30 days with different financial services vendors to potentially use CTIG applications to manage transactions for their customers!
kozuh, re KEST.OB
Congrats on the gain. But I don't understand your posting strategy on this one. You've mentioned KEST several times this week, including a timely post on Monday when it was trading at $1.05. Although as usual, you didn't provide any reasoning as to why you liked it or why you thought it was undervalued.
Then KEST releases an 8K filing after the close on Monday. Another company was significantly boosting its already large stake in KEST. Don't know anything about the fundamentals, but this seemed like very positive news that would move the stock. Yet you don't mention this important filing at all!
You did let us know Tuesday afternoon that KEST had jumped over 30% to a new 52-week high. How can you post about this stock 4 times this week without a word about the filing?? Don't you see that if you had alerted the board to the 8K, some people may have bought at Tuesday's open around $1.10 and made a sizable profit when it zoomed to $1.74 today. And it would have been due to YOUR contribution!
Thanks wade. Haven't kept up with FORD Yahoo board lately, and you're right...WIRX has been getting some airplay over there this week. Probably what drove the stock up today.
I'm not sure what to expect from Q4 earnings. Could be .03 or it could be .09. May sell out if the stock goes much higher as I don't want a repeat of what happened after Q3 results. Was hoping to see some PR's in the coming weeks that might signal how they did. Only news we've seen is the alliance with that pink sheet company trading at .0024...doesn't inspire much confidence!
Bob, I wonder if the strength in WIRX was due to new iPod cases and listening accessories that showed up today on the homepage under "New Products Coming Soon". Still waiting for the PR campaign to get underway...
Len, I'm surprised by your response. There is a HUGE difference between a P/E of 20 and a P/E of 80. I guess triple digit P/E's should be allowed here, too? If a $40 stock earned .01/share last quarter, feel free to post it because they're profitable now?? Great...more overpriced stocks to wade through. I guess we better create a board for value stocks...oh wait, we already have one.
I rebought some CTIG.OB after listening to an encouraging interview with the CEO on Wall Street Reporter:
http://www.wallstreetreporter.com/profiles/CTIGROUPHOLDINGS.html
Good outline of what the company does in the electronic billing sector. Blue chip customers include SBC, Sprint, Cox, etc. Sees "very big demand" now and expected to quadruple or quintuple over next 4-5 years. Also sees opportunities to license their patents many, many more times over next 7 years.
Towards the end of the call, he made some interesting comments about expected financial performance. Said they would continue on a successful trend. And that we'd be "rather surprised" by the good results we'll see in the future! What's more, CEO said they are cash flow positive, have $8M cash in the bank, and expect to grow that by AT LEAST 25% this year!! That would be about $500K per quarter throughout 2005.
A little wary about potential dilution gilead discovered. But looks like this company could continue to grow revenues, post quarterly earnings of .01-.02/share, and increase its large cash position. With that Chairman-led investment group buying 667,351 shares at .38 a couple weeks ago, I don't see much downside at .40. There also seemed to be something behind that high volume spike to .64 last month.
wade, re ANGN
Don't know much about this one, but I wouldn't annualize that .10/share from cont. operations. Looks like they could just as easily post a loss of (.10/share) next quarter. Who knows where daytraders will push this low floater, but I'm not chasing it in the high $3's.
Certainly would have jumped in if I had looked at the 10K before today. I also glossed over the earnings release this morning, as I just saw the net loss and moved on. I'm really kicking myself on this one. Will be paying more attention to patent's posts from now on!
bucfan, re USOO
I'm kind of surprised it's flying like this. Up almost 50% in the last week...on no news! And volume today is very strong. I think the stock is pretty close to fair value, so took some profits off the table. But if they can post Q4 earnings of .05-.06/share...stock could see $2.
USOO.OB at $1.35 X $1.36! Yeehaw!! Can't believe this one sat under $1 for so long with Q3 earnings of .042/share and the current strength in the trucking sector.
Wow! Awesome call, patent. Not sure how I missed your post. Darn!! Would have been all over ANGN in the low $2's if I had seen that they earned .10/share from cont. operations in Q4. Now at $3.30. Congrats! Although I'm kicking myself that I missed this one.
Yes, I think checkmate's post is what sparked the buying on DNDT. I saw his post on RB about the CEO saying Q4 would be the best quarter...nobody else seemed to pick up on it. When I asked him to clarify, he was nice enough to post his response here and on RB. Glad he did!
That may have been what set the stock off at .16, but I don't know why all the action today. Heavy buying...even in the .30's! I took some profits as I haven't had a stock double in a week recently (except FORD). But will be interested to see what happens tomorrow. GOOG report might provide a lift to the Nasdaq.
OT PalmBeach, re DDIC
The low P/E is due to a huge 1-time gain several quarters ago. They posted a large loss last quarter and guided for another loss in Q4.
kozuh, my guess is because VDSI pre-announced Q4 earnings of .01-.02/share and .09-.10/share for the year. So it's trading at a P/E of 80!!! This is the exact opposite of a value stock (plus it's not even a microcap), so I don't understand why you continue to post it here?
Nice post, researcher. I can't believe I was able to add MPAD in the $4's today after such a strong report yesterday. They greatly exceeded what I thought Q4 earnings, new orders, and total backlog would look like...yet the stock price is up less than 5% from where it was before the 10K came out.
My beef with these guys is the total lack of PR. Only reason stock is so cheap IMO. And it looks like they're going to let another golden opportunity slip away. If we had seen a press release that broke out Q4 fully-taxed earnings of .18/share, with a mention of the huge jump in backlog and the strength of the balance sheet...I think the stock would already be in the $6-$8 range.
Thanks researcher for the explanation. Even if earnings are fully taxed from here on out, this still looks like an undervalued turnaround play. Although I won't be expecting as big of a pop on Q4 results.
Market seems to be getting pretty bubbly again. Quite a few runners today among the microcaps. Even some low float Nasdaqs are flying (look at what OBCI has done over the last few days on no news). Should be a favorable environment to report good earnings, unless your ticker is CXTI or MPAD!