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Regarding SS....
I think of Social Security as a defined benefit program that reminds me of what the (now) old-fashioned company pension plan was like. It acts as a counterweight for the additional risk most of today's workers take on by managing their 401K and IRA plans.
Aren't we in danger of tipping the system into taking on too much risk if we allow SS to invest in stocks?
Hweb, re DWVS.ob. ITDD holds nearly 60% of all outstanding shares per the schedule in the proxy statement for DWVS.
What's interesting is that at the current bid of 0.21, that would value ITDD's holdings at 32.4MM x 0.21 = 6.8MM
The current market cap for ITDD is 2.7MM
http://finance.yahoo.com/q?s=itdd.ob
No volume in the stock, and the bid:ask spread is ridiculous....0.35 x 1.00.
Too bad, because that would be an interesting arbitrage play on DWVS. ITDD.ob really holds the cards here....what happens if they want to sell a chunk of their position?
Interesting article about why consumers have been able to withstand higher oil prices.....
Income Story Still Dwarfs Energy Spike
By Tony Crescenzi
RealMoney.com Contributor
8/2/2005 12:00 PM EDT
The puzzle over how consumers have been able to withstand high energy costs is easily solved with Tuesday's data.
Personal income rose 0.5% in July, putting the year-over-year gain at 6.8%, well above the long-term average of about 5.1%. The added 1.7 percentage points of income growth, which amounts to about $150 billion, is perhaps the best explanation as to how the U.S. economy has remained resilient in the face of high energy prices. The $150 billion is significantly more than the nation's net increase in its energy tab, which amounted to about $100 billion last year.
Proprietors Faring Very Well
June's gain in personal income was boosted significantly by both proprietors' income and interest income, which accounted for 40% and 30% of the monthly gain, respectively. The gain in proprietors' income has been a key feature of the economy and is a reflection of the sharp increase in self-employment that has occurred over the past few years. Whether it's eBay sellers, computer consultants or Web designers, the economy is composed of more than just big companies these days. Proprietors' income is now up 8.4% vs. a year ago.
Investors would be wise to shop for companies that are catering to the self-employed and to small businesses, as well as for companies benefiting from outsourcing, which is in the midst of a secular upturn. Large companies are continuing to streamline, and this is bolstering the fortunes of others.
Interest Income Increasing Sharply
The gain in interest income puts it on a path to increase by about $1 trillion this year, roughly $80 billion above the level of two years ago. The $80 billion obviously gives consumers added spending power and is an important offset to the rise in debt-servicing costs. The fact is, consumers are net creditors, receiving more interest than they pay (there are distribution issues here with respect to who gets the income, but the point is that the added interest income is an offset to the consumers' increase in interest expense).
Dividend income also has been a key feature of the strong gains in personal income, increasing 9.4% over the past year, or roughly $44 billion. Again, there are distribution issues here, too, and this somewhat reduces the importance of the gain, but the gain is nonetheless a partial offset to the interest expense that consumers have been experiencing as a result of the Federal Reserve's interest rate increases.
Inflation News Is Benign, but...
The personal consumption expenditures core deflator, the most widely followed inflation figure at the Fed, was flat in July, an excellent reading (consensus was for a gain of 0.1%). This is helping the bond market. That said, benchmark revisions to past months put the PCE core deflator at 1.9% year over year, two-tenths of a percentage point higher than expected and at the upper end of the Federal Reserve's target range. The gain is the most since an anomalous spike in July 2002; excepting that spike, the gain is the most since December 2001.
Tuesday's economic news is important, and investors would be wise to continue to track it, particularly the data on personal income, especially in the context of rising energy costs. The energy-price rise is important in and of itself, but the income story is more dominant. Those who have bet that energy prices would wreck the economy and hence the stock market have bet wrong. That said, should the gains in personal income slow, the importance of any energy price rise would become amplified. There's just no sign of that on the horizon, now that the economy is experiencing a growth spurt.
Cleverrox (and others interested in this issue), re tax rates and valuation losses.
I'll use another familiar stock: MDF
From their last 10Q:
INCOME TAXES
The Company accounts for income taxes pursuant to Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (“SFAS 109”), which requires income taxes to be accounted for under the asset and liability method. Under this method, deferred income tax assets and liabilities are determined based upon differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date. A valuation allowance is established when it is more likely than not that some or all of the deferred tax assets will not be realized.
SFAS No. 109 requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. After consideration of all the evidence, both positive and negative (including, among others, projections of future taxable income, current year net operating loss carryforward utilization and the Company’s profitability in recent years), the Company determined that future realization of its deferred tax assets was more likely than not and, accordingly, eliminated the valuation allowance against its deferred tax assets as of December 31, 2004. In the event it is determined that the Company would not be able to realize all or part of its net deferred tax assets in the future, an adjustment to record a deferred tax asset valuation allowance would be charged to income in the period such determination would be made. Changes in deferred tax assets are reflected in the “Income Taxes” expense line of the Company’s Condensed Consolidated Statements of Operations.
------
Also, looking at MDF's cash flow statement, it looks like they paid no taxes at all, after reducing the deferred tax asset and using tax benefits assoc with stock option exercises.
Cleverrox, I'll take a stab at explaining the VPHM tax situation. This issue always comes up when companies that have huge NOLs from prior years start earning money again.
Looking at VPHM's 10K, they had HUGE nols from prior years:
<snip>
12. Income Taxes
As of December 31, 2004, the Company has approximately $155.0 million of Federal and $149.0 million of state net operating loss carry forwards available to offset future taxable income. In addition, the Company has approximately $7.8 million of Federal research and development credits available to offset future taxable income. The federal and state net operating loss carry forwards as well as the federal research and development credits will begin expiring in 2009, 2005 and 2009, respectively, if not utilized. In addition, the utilization of the state net operating loss carry forwards is subject to a $2.0 million annual limitation. Also, based on a preliminary analysis of the “change in ownership” provisions of the Tax Reform Act of 1986, net operating loss carry forwards will be subject to annual limitations that will reduce the Company’s ability to utilize these carry forwards in the future.
Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2004 and 2003 are shown below. Due to the uncertainty of the Company’s ability to realize the benefit of the deferred tax assets, the net deferred tax assets are fully offset by a valuation allowance at December 31, 2004 and 2003. The change in the valuation allowance for 2004 and 2003 was an increase of approximately $5.8 million and $7.8 million, respectively. Additionally, at December 31, 2004, approximately $1.9 million of gross deferred tax assets will increase equity to the extent such assets are realized.
----------------------
That part that I put in bold is the key statement IMHO.
Look at VPHM's full balance sheet from Q1. Where do you see the deferred tax asset?? Its not there because the company has elected to say that based upon recent history, it probably won't get to use the full tax benefits. The "valuation allowance" gives companies the ability to keep deferred tax assets OFF the balance sheet, and not show a full tax rate on their income statement. Now, looking at the projections for this year and next, where pretax income *could* exceed 100MM during that period, how much longer can they continue to use that valuation allowance shield??
They (or their accountants) could just as easily have said, "We believe that there is a very strong chance we will get to use all those operating losses, so let's bring it on the balance sheet (as a deferred tax asset) and recognize a big tax credit on the income statement. " Thereafter, they would be paying full statutory tax rates on the income statement but still pay minimal taxes on a cash basis.
This is the key point I'm trying to make. I don't think that many investors are aware that taxes shown as being paid on the income statement can sometimes have no relation to what they actually pay to the govt.
I'm not an accountant, so I don't know what is considered conservative treatment.....is it more conservative to keep a tax benefit OFF the balance sheet? Or more conservative to show a truer tax rate on the income statement? That's up to investors to decide I guess.....
MCX out today with its Q2 earnings:
http://biz.yahoo.com/bw/050802/25620.html?.v=1
Earned 0.32 fd vs 0.06, with charterhire income up 18% y/y. This LPG shipper has transformed itself over the past year, selling off some ships and buying others. Its principal biz, LPG shipments, is stable and not subject to the wild fluctuation in rates that some Oil tankers face.
MCX also stabilizes its biz by doing longer-term charters and locking in rates. This has hurt in the past as its existing rates are below what it could currently get on the market.
Several ships will be coming up for renewal next year, as they come off their contracts, charter income should rise again. The company has guided for 1.35 fd for the FY05 (back in Q1); the stock is at 10.40...so trading at <8x forecasted eps. Reiterated guidance today:
"Tony Crawford, the CEO of the Company, commented on the second quarter results, "Following the delivery of the new vessels, our second quarter earnings have increased nicely and our policy of long term growth with stability will allow steady quarterly increase of the net income to continue, in line with our previous estimates".
Mr. Crawford added, "At the Company's most recent annual meeting, a number of Shareholders asked for half yearly valuations of the Company's fleet by independent brokers. Such a valuation in June 2005 appraised the fleet at approximately $43 million over its net book value. This equates to $4.8 per share that, together with current book values and deferred gains on vessels sales, translates into net assets value of comfortably more than $10 per share."
--------
Stock also pays a 2.4% cash dividend. I like its predictability and stability over the next 6-12 months. Not like other shippers I've come across. Still some value left here, as I expect it to trade up to at least 9x estimates (possibly higher). Other shippers are trading around 8x, but they are all expected to show declining growth next year.
MCX should still be able to grow as it replaces older charters with newer, more profitable ones.
EGY announces its Etame 6H well completed...6100 BPD.
http://biz.yahoo.com/prnews/050801/dam042.html?.v=19
Market had been expecting some announcement....
"At the current choke setting, the well brings total field production to approximately 24,000 barrels of oil a day."
Wade, re THK / PrimaryAds. Looks like pretax earnings contribution would have been around 920k from PrimaryAds, had they been included for the full Q1. (Check out the PR regarding the closing of PrimaryAds).
Pretax income in Q1 was 1.4MM with no contribution from PrimaryAds, so one could conclude that PA would have been around 40% of earnings on a pro-forma basis.
Of course, they've added a few more companies since then, so this is a fluid number that should go down over time.
Did some digging in the 10Q. It appears that the passage of new federal regs requiring gunlocks may not be a slamdunk positive for the company:
<snip>
(d) Trends
Handgun safety remains a major concern and interest to the American public, particularly in light of accidental and intentional shootings involving children. Moreover, the tragic terrorist attack against the United States on September 11, 2001 continues to have many Americans concerned about their personal security. As a result, many people are purchasing firearms to maintain for home defense purposes. While they are purchasing handguns, many are also concerned with the safe storage and maintenance of the firearm in the home and want to purchase affordable gun safes to increase security and cleaning kits for gun care.
The focus continues to be one of gun safety rather than legislative attempts to ban guns possibly due to the strong gun lobby and the nature of politics. Gun safety issues have been moving from the federal level to the state level through the introduction of mandatory gun-lock legislation, while those at the federal level are seemingly in accord with the approach being taken by the Consumer Products Safety Commission to set measurable standards of performance for gun-locking devices. The Company, with developed products that address preventive handgun safety, anticipates that it will be in a position to benefit from this trend, although this, of course, cannot be guaranteed. We believe that the continued focus on handgun safety, the use of gun-locks by law enforcement agencies, and the litigation aimed at gun manufacturers as well as the gun legislation will hopefully will enhance our product line revenues.
13
--------------------------------------------------------------------------------
Table of Contents
Although gun legislation could positively affect revenue, it could also affect expenditures. Recently, state legislation has been effective in increasing gun safety and minimizing gun violence. One way of accomplishing this is to require gun manufacturers to incorporate safety devices similar to the Company’s products into all handguns sold. The first regulation of this kind was passed by the Maryland state legislature in early April 2000. This legislation required gun manufacturers to incorporate safety devices similar to the Company’s products into all handguns sold. The State of
California enacted legislation to establish performance standards for “firearm safety devices”, “lock-boxes”, and “safes”. These standards prevent an attack on the gun-lock or safe with hand tools, such as hammers, screwdrivers, electric drills, screw and hack saws. This legislation requires manufacturers to have their products tested by an independent testing laboratory in order to be listed as an approved device. This testing has resulted in significant expenditures to the Company. We anticipate that similar standards will be adopted throughout the United States in the next few years.
<snip>
So, a bit of a mixed bag. Gunlock revs last year were 1,571,000 out of 9.4MM in total sales (16.7%). That was up 5% from y/y levels. Revenue mix is changing toward gun cleaning kits and now other non-security products. That will be the primary focus going forward.....
Thanks for that update Cagney! I'll be watching to see what happens to that gun bill.....
Of course, I thought DAAT was pretty undervalued even before this potential bit of good news.
thanks, R59. I have seen other e&p companies like EGY reveal daily production volumes and avg price rec'd within their 10Qs, so I was surprised not to see any of that info here.
TVOC.ob....I checked their latest 10Q, they don't provide any details on production volumes or avg price received. Not a very forthcoming exploration company.
Other than oil prices remaining high, how would one know if they can show rev growth without knowing reserves and production?
MasterPicker, are you aware of the additional warrants and options that were previously anti-dilutive for WPCS?
First, here's the guidance from the company (which was BURIED in an 8-K filing, so kudos for digging that out):
On June 8,2005, the Company disclosed certain financial information to an
institutional investor. The disclosed information was as follows: As the
business continues to grow, the Company believes that it can generate revenue of
approximately $50 million, net earnings of $2,3 million and earnings per share
of $0.58 for the fiscal year ended April 30,2006.
Assuming a reasonable tax rate, the projection of 0.58 implies fd share count of 3,966,000. In the last Q, they company had an avg fd share count of 3,462,000.
They also have the following warrants and options:
"For the three months ended January 31, 2005, 369,926 stock options and 2,509,121
warrants were not included in the computation of fully diluted earnings per
share, because the stock option and warrant exercise prices exceeded the market
price of the common stock and, therefore, the effects would be antidilutive. The
assumed conversion of the remaining 24,098 stock options resulted in a 4,059
share increase in weighted average shares for fully diluted earnings per share."
The conversion price for the warrants:
"Each warrant is exercisable for a period of five years at a price of $8.40 per
share, subject to certain adjustments. The exercise price of the warrants is
subject to adjustment for subsequent lower price issuances by the Company, as
well as customary adjustment provisions for stock splits, combinations,
dividends and the like. The warrants are callable by the Company, upon 30 days
notice, should the common stock trade at or above $25.20 per share for 25 out of
30 consecutive trading days. A maximum of 20% of the warrants may be called in
any three-month period.
-------
We won't see the full impact of the warrants until the stock price avg is solidly above 8.40. I wonder how much of the warrant shares were figured into the the guidance?
Bob, thanks for posting that piece by Mauldin. The expectation of the Chinese economy experiencing DEFLATION is probably not the majority view at this point, although it certainly could happen. What does appear likely is the continuing competition from around the globe that will help out the US consumer in the form of lower prices on imported goods.
As an aside, when I asked the CEO of DAAT about currency changes affecting his costs, he said that his supplier would most likely be willing to eat the 2% increase, simply because they are scared that he would work with someone else.....
This seems to be one of the driving theories behind Mauldin's artice:
"In China today, one can reportedly find over 3,000 ball-bearing manufacturers (or over 300 car manufacturers, etc...). Unfortunately, the Chinese market is probably big enough for 10 ball-bearing manufacturers. This means that 3000 ballbearing CEOs wake up every morning and wonder: "how do I get to be one of the 10?". And the answer to that question is simple enough: one gets to survive not by being the most profitable, or the most advanced technologically, or not even by being the best politically connected (though that helps). One gets to survive by being the biggest; by employing so many people that, when the down phase of the cycle occurs, the government can not afford to fire hundreds of thousands of workers. One becomes "too big to fail".
This of course means that, when capital is offered up, all three thousand ball bearing manufacturers (following their "too big to fail" business models) will grab it and spend it with both hands. Competing with each other for a) raw materials, b) labor, c) allocations on the overstretched power and transportation grids.
Unfortunately, as labor, raw material and transport costs rise, margins start to come under pressure. Especially since, given the increase in capacity, producers are incapable of passing on price increases."
Kevin, I'm actually impressed that the market was able to absorb those 61k shares as well as it did. Stock fell around 7% at it lowest point, and has since recovered to 2.25 which is only 2% down from where it traded before the yuan revaluation announcement and Lasater's sale.
I think that this will be a non-event in time. I'm more interested in hearing how FY05 is unfolding. We'll be getting an earnings report pretty soon, probably around the middle of August.
The selling today in DAAT is presumably based upon the news that China's currency will appreciate against the dollar and either a) squeeze margins or b) reduce sales because DAAT won't have the same competitive advantage it once did.
I think the fears are overblown. China won't let their currency drop too much in order to keep economic disruption to a minimum. As was pointed in the previous post, the net effect of this change in currency policy is really minimal..only about 2% or so.
I hope that Collins will address this issue in a PR in order to settle down investors in the stock.
Researcher, just a quick note on SODI. It looks like a portion of their earnings came from a one-time source:
7. OTHER INCOME:
During the fiscal quarter ended May 31, 2005, the Company settled approximately
$341,000 of debt obligations to unsecured creditors at a discount. The Company
has recognized approximately $69,000 of other income as a result of these
settlements. This $69,000 of other income is a major component of the $77,000 of
other income reflected in the condensed consolidated statements of income for
the quarter ended May 31, 2005.
Still looks cheap.....
I don't know DXPE very well, other than its profile as a supplier and distributor of industrial supplies. Looks like sales mix changed since y/y and that led to higher margins.
Bullish guidance appears to indicate that the trend is sustainable.
I don't give very high forward PEs for stocks like this, so my target price is probably a lot lower than other investors on this board. Good for a quick trade perhaps, but the run-up today will probably be heavily sold into if it touches much higher than 12, imo.
Stockpeeker, I know the DAAT story and have spoken with David Collins, CEO of the company, about this issue a month ago. He wasn't too concerned and expected the Yuan to move up in a gradual fashion against the dollar, way before this announcement.
These cost increases for DAAT will be passed on to the US consumer, but DAAT's products are already much cheaper vs their competition.
I doubt that it will impact the buying decision very much.
I'm sure that it will be perceived as a negative by investors and will restrain some buyers of DAAT stock right now....but a decent earnings report and strong growth outlook will pull them back in.
Hweb, you seem to have hit all the concerns here for TGIS.
The $1MM retroactive payment covers services that were expensed prior to May 2005. What's not clear is how much of the services were actually expensed in the current quarter, which includes April. Probably not much.....so most is likely pure profit.
Another issue not mentioned is the low tax rate....
Len, if you are interested in some input for new questions to poll the group, here are a couple:
1. How do you think investors will treat option expensing?
a) Maintain PE multiples but lower price outlook to account for lower net eps.
b) Increase future PE multiples to maintain price outlook in face of lower net eps.
c) Ignore completely.
2. What are the most important fundamental determinants of where a stock price will go in the long run?
a) Earnings
b) Cash Flow
c) Revenue growth
d) Margins
e) Management
f) Other
Thanks for organizing this.. I'll be interested to see what results you get from the data.
OTC, isn't this quarter (the quarter about to be reported) the last quarter of seasonal strength for GIGM until after the summer months?
Hweb, glad to see you also see some value here with DAAT.ob at 2.28 and guiding for 0.23 - 0.26 this FY. Just wanted to note that the upcoming quarterly report (Q2) won't look great y/y because of tax rate changes and additional dilution. Q2 04 had a tax rate of 2%, and fd share count of 5728. Q2 05 will see a tax rate of 39% and fd share count of around 6500, because of in-the-money warrants + PP done just over a year ago.
I rail about using pf tax rate to normalize eps, but it usually gets lost in the shuffle. DAAT will have easier comps for net income in Q3 and Q4, when they have a tax rate of 21% and 39% respectively.
DAAT's guidance uses pretax growth as the performance metric, which I agree with.
TCHC reiterates guidance of 2.75 - 2.80 today:
http://biz.yahoo.com/bw/050718/185673.html?.v=1
Trading at 4.5x the low end of guidance.
Company earned 0.73 fd, ft from continuing ops in Q1. Pays 0.08 quarterly dividend.
Has upped its reinsurance coverage and stands to benefit from a rising rate cycle in FL homeowners insurance.
Big wild card: Mother Nature, who could wipe out those projections with several well timed hurricanes.
Could be a decent spec play in the low 12s.
Disclosure: I'm long the stock and its also in my Pick 6 group.
Andy Beal clears up some confusion over his resignation from Websourced:
http://www.searchenginelowdown.com/2005/07/back-for-encore.html
I think this is the most reassuring part:
"First, I have nothing but respect for Think Partnership and its board of directors. Gerry Jacobs and the board are building a fantastic group of companies and, as a significant shareholder, I am excited about the group's future potential. It is unfortunate that some have linked my resignation of WebSourced, with my thoughts on THK. I believe THK will be strong for many years to come."
Just looked at JM Dutton's forecast for WHAI. They have "other income" for FY05 as coming in around 2.3MM. I assume this is the non-cash income that gets recorded for the warrant liability.
Tax rate is assumed to be 11%, with FD shares around 46MM.
I'll do my usual adjustments for eps.
Something struck me as odd. In the Q1 PR, the company said the following:
"The Company estimates that it generated $4.6 million in earnings before interest, depreciation and amortization in the first quarter of 2005. The majority of that cash flow was used to reduce the Company's current debt and invest in organic growth opportunities through new business units. During the first quarter, the Company also lowered its short-term debt by approximately $6.1 million and established permanent financing, reducing overall interest charges by 6% from the fourth quarter of 2004. "
The Dutton report also uses this methodology:
"Cash Flow
In the first quarter, the Company generated $2.8 mn of free cash flow. This is important as it puts to rest concerns about
ability to generate cash to manage outstanding debt and continue to grow the business.
----------------------------------------------
This seems a bit misleading to me, because cash flow from operations was negative during Q1. (-$1.4MM, from the company's 10Q) I don't see how they are getting to positive free cash flow. They must be ignoring the impact of the change in A/R, which was very negative during the quarter (-5MM).
What are your thoughts on this?
Bob, do you know if WHAI's forecast for FY05 includes the impact of the non-cash income from the warrant liability?
I'm probably going to call the company, but thought I'd check with you quickly to see if you knew.
Thanks!
Finally, the source of the selling is revealed:
Ticker: THK
Security Name: CGI HOLDING
Security Type: Common, Ordinary Stock
Price: 2.1
Description: N/A
Vicker's Insider Index: -25
Insider Index Date: 7/9/2005
Shares Outstanding: 33,322,828
Main Industry: FINANCIALS / INV CO'S (INELIGIBLE INDICES INCLUSION)
Industry: INVESTMENT ENTITIES
Country: Domestic
Exchange: American Stock Exchange
# Insider Holders: 6
% Held by Insider: 21.999
Shares Held by Insider: 7,330,684
Abbreviation Codes
139 Records found
Page 1 of 3 Next >> or Jump to page: 1 2 3
(Sort by Column available for 7000 records or less.)
Filer Relation Geo Code Trans. Date From Trans. Date To Form Type Action Shares Dollar Price From Dollar Price To Current Market Value Type Traded / Owned Holdings
KELLOGG, LEE N/A NJ 7/1/2005 N/A Form 144 N/A 312,500 N/A N/A 968,000 N/A / N/A N/A
KELLOGG, CHARLES N/A NY 7/1/2005 N/A Form 144 N/A 312,500 N/A N/A 968,000 N/A / N/A N/A
CXTI.ob filing reveals they recently closed a new deal in China for $17MM US. The stock had been selling off, IMHO, on the belief that there was little if anything left in the sales pipeline. An announcement should be coming out soon, I would think.
Here's the poster that caught the filing:
http://ragingbull.lycos.com/mboard/boards.cgi?board=CXTI&read=284
They had to issue stock to the consultant that helped them win the contract, but he doesn't appear likely to sell at current levels......
Could be worth a small flyer; stock trades at 0.56 x 0.58.
Earned 0.12 ft, fd in the most recent Q.
Hweb, this has to be the most undervalued stock on a PE basis out there........
I started a very small position today on this filing info. News of the contract win doesn't appear to be widely known yet, as there hasn't been a PR on Yahoo. Could pop up once this gets out.
Andy Beal resigning from Websourced:
http://www.threadwatch.org/node/3146
This is probably the source of the selling, IMHO. A black eye for the company, as he was the primary person behind Websourced.
R59, I agree that earnings are the big factor in the long run, but persistent selling can try the patience of any shareholder. Just ask AOBO shareholders!
Researcher, I've been watching this option expense issue very closely to see how investors will react in the coming fiscal year. Many felt that expensing options AND including them in fd share counts went too far.....but I also feel that companies shouldn't have been allowed to write off those option expenses as tax deductions if they weren't expensing them on the income statement.
A lot of companies we follow could be hurt by this if investors decide to keep PE expectations the same but on lower eps.
I'm guessing that many institutions will strip out the option expense items and continue to focus on EBITDA growth and free cash flow; individuals may treat them very differently....we'll see.
Wade, I'm scratching my head about THK also. This selling volume today could be from the same group that bought the last dip in the low 2s and decided to bail and lock in some profits; of course, there could be new selling coming from other areas. I haven't seen any Form 144s filed recently that would account for this, but we could get a filing in the next day or two.
In a nutshell, the company has set out some very aggressive guidance for the remainder of the year. Perhaps some are expecting a reduction in eps guidance?
As I write this, someone has scooped up a tremendous amount of shares at 2.10. I added today at 2.10 and 2.15
Linuspop, thanks for digging that out. I wonder why Ameritrade Izone doesn't advertise this on their main website? It also makes me wonder how many other variations on commissions they have.
MikeS, thanks for that recap. Just so I understand, does the 0.40 estimate include the tax benefit? And other quarters are untaxed?
Last year's eps were fully taxed at 38%, so I'm confused as to why they would get a benefit now. Plus, it makes the quality of their earnings this year VERY suspect, if untaxed AND inclusive of a tax benefit.
MikeS, there are quarterly estimates out there for NKBS:
http://finance.yahoo.com/q/ae?s=NKBS
You could see a ST pop on the Q2 numbers, which look like they show good y/y comps. But Q3 looks ugly, and one of the three analysts expects earnings to decrease next FY.
The real question is why are eps numbers expected to dip for FY 06 ?
Peeker, we'll find out soon enough who's involved in the PDGE pipe.
They have to file an SB-2 very soon....
Thanks for the kind words Bob! Apish and I go waaaay back. I have a ton of respect for his work ethic and skills as a swing trader.
The same respect I hold for you and a few others on the VM board.
Len, please replace WHAI.ob with EZEN.ob for me. THX
Len, Skillz, and Bob, thanks for running the contest.
Here are my 6 picks:
THK
IIG
TCHC
DAAT.ob
MCX
WHAI.ob