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gilead: KSWW
I hope you're right about the long term growth. I'm also planning to accumulate on weakness. It's had a big run and there's likely to be some profit taking. Q2 results will give us some more insight in gross margin trends, and revenue growth.
ERS finally got a haircut, dropping from 12 yesterday morning to 8.90 this morning. The 25% correction was overdue imho, given the sharp drop in aluminum prices over the last 2 months.
IPII has also taken a pretty good hit recently, now down to 16.25 from a high of 22.35, but I'm looking to buy a few more as it drops ahead of what should be a stellar Q2 earnings report. But that's not due out till mid August .... plenty of volatility is likely in the coming weeks ...
gilead: KSWW
I started a position yesterday, but wish I'd taken a closer look when Yielddude and Hweb introduced this one back in May at just over $1 per share. The stock has already had a pretty good run. Nonetheless, I think it's still appealing at 1.70.
The huge backlog gives them a lot of leverage over fixed costs, especially SG&A. Gross margins have also improved with increasing revenues, to 11.6% in Q1 versus 7.9% in the year ago quarter, and that trend should continue. IF they can increase revenues to $12M per quarter, and gross margins improve further to 12.5%, EPS would be over .08 per quarter. And the huge and growing backlog, suggests quarterly revenues could grow even substantially beyond $12M per quarter.
There's lot's of potential here if their growth trend continues .... and growth stocks are deserving of a higher PE ....
Bobwins: ATVEE aka TALL
This one has been quite disappointing, but I decided to average down from the low .20's, and doubled my position this morning. Thanks to ECHOS excellent critique in post #5136, I thankfully only took a small position initially. But it seems like an interesting speculation at the current price. The latest guidance from management was for EPS of .06 to .07 this year. They've helped the cause by shifting $750k of profits out of 2004 in the 10K filing, and will likely instead realize those profits through this year.
At the current price of around .07 it looks like a good risk/reward profile. It could wind up the year at .01 on the pink sheets if management continues to disappoint, but on the other hand it could easily triple or more from this level, imho.
GV +.05 to .70 on insider buying news
SEC filing yesterday shows CEO bought 75k shares at .65 on 6/21, also bought 165k shares at .54 a few weeks ago. The insider buying is encouraging ....
Some big earnings should be coming in future quarters, perhaps starting as soon as Q2. Last year the stock spiked over .80 after posting a strong Q1 with EPS of .03 on real estate development profits. But this year's backlog is huge by comparison, and that's without an even larger project in the pipeline. This stock should eventually trade back over $1, imho.
Currently the stock trades at a discount to tangible book value of $0.75 per share. GV reported earnings of only $0.01 per share in the March quarter, but stronger results lie ahead ....
In the recent earnings press release John H. Sottile, CEO of Goldfield, said, “Two new large projects are just now coming on stream. The backlog for real estate development operations at March 31, 2005 was approximately $10,495,000, compared to $900,000 at the same point last year. This backlog assumes settlement of existing sales contracts from the Oak Park project, which recently commenced construction, but does not include any amount from the substantially larger initial phase of the Pineapple House project. Goldfield expects to complete and deliver to buyers in 2005 all backlog reflected at March 31."
wade: STV
I think STV is still a good buy in the 7's, though not the bargain it was in the low 5's at the start of the year. But they're growing rapidly with new contracts coming in all the time, so long term it could go much higher. Furthermore, their profits are being put to good use by buying more equipment and expanding their geographic base.
gilead23: Insider Trading
The laws are vague and subject to interpretation. But the fact is, as lentinman indicated, that 99.99% of insider trading is not prosecuted or even discovered, imho. The SEC goes after 'big fish', not small guys who get some special insight that 'might' possibly be construed as insider information. It would be like ticketing drivers going 56 in 55 mph zone. They're looking for drivers going 70+, and even most of those will get away with it 99% of the time.
Lots of small investors call CEO's and CFO's and get a bit of 'insider' scoop .... 'comfortable with estimates' would be a frequent comment from a CEO, but not considered illegal information, even though the general public won't see it in a PR. After all, anyone can call the company and ask questions ...
As for 'hot tips' on the internet ? There are millions of those, and most are pump and dump lies anyway. I doubt the SEC ever prosecuted anybody for acting on a message board tip.
swb173: STV
Congrats on the quick round trip. I was going to sell a few if it made a run at 10, but it never got past 9. Oh well ... at least $7 seems to be a good support level.
swb173: STV
STV broke out of the 7's on heavy volume a few days ago, hitting 9 but unfortunately gave it all back. Maybe it was a newsletter recommendation. I know of no news that drove it up or brought it back down.
Wade: STV
I'm using management guidance and adding a little based on their huge backlog. Q1 is seasonally weak. Also my estimate is pre-tax. They don't pay taxes. In the 4th quarter they'll take a big 'tax credit' to offset what they've 'paid'. It's just accounting rules. They have 9.3 million shares o/s .... here's an excerpt from the last earnings PR ....
Commenting on the results, Joseph Harper, the Company's President said that both segments exceeded their budgeted operating profits for the first quarter, and the Construction Segment further increased its contract backlog during the quarter. Accordingly, he said, management believes that the Company will comfortably achieve its previously-issued guidance for fiscal 2005, first given on March 23, 2005, of consolidated revenues exceeding $200 million, consolidated EBITDA of at least $14 million and consolidated pre-tax income above $8 million.
Bulletin Board Stocks May Face Tough Rules
Nasdaq Proposes Banning Listed Firms for a Year If Deadlines Are Missed
By SERENA NG
Staff Reporter of THE WALL STREET JOURNAL
June 22, 2005; Page C3
In a little-publicized move that could banish hundreds of companies from the Bulletin Board, the Nasdaq Stock Market has proposed to the Securities and Exchange Commission that companies that miss securities-filing deadlines three times over a two-year period be removed from the over-the-counter market for a year.
Nasdaq made the proposal after identifying more than 3,000 instances of late or incomplete filings by 1,806 companies in the two years to August 2004. Of those companies, 1,067 are still quoted and make up roughly one-third of all Bulletin Board traded firms. The Bulletin Board is an electronic marketplace for companies that don't meet the listing criteria of exchanges like the Nasdaq or the New York Stock Exchange.
The planned crackdown, which could be put into place as early as this summer, is a double whammy for many small companies that are already facing challenges in meeting their regulatory filing deadlines because of the increased vigilance required by the Sarbanes-Oxley corporate-governance law. Some market observers say the proposal harks back to a proposal that Nasdaq scrapped in 2003 to create a Bulletin Board Exchange that would impose stricter listing standards on issuers and effectively force many firms to turn elsewhere, most likely the Pink Sheets, another over-the-counter market for small stocks.
Currently, even Big Board firms don't face immediate delisting if they fail to make timely filings of required reports to the SEC. Nasdaq begins delisting procedures once a company misses its deadline for filing quarterly or annual results. The SEC recently approved an NYSE rule under which the exchange will begin monitoring companies that are late in filing their annual reports, essentially giving them up to a year to file.
In this context, the proposed measures for late filers on the Bulletin Board may appear harsh. But faced with the large number of repeat offenders, observers say Nasdaq's approach is a cost-effective way to police errant issuers and deter others from being lax in their reporting.
"With big firms, it makes sense to look at the facts and circumstances of each case, says James Angel, a finance professor at Georgetown University.
The problem, of course, is that Nasdaq would have a hard time delving into why hundreds of companies missed filing deadlines, so the three-strikes-and-you're-out rule makes sense, Prof. Angel says. "If firms mess up three times, it says a lot about their internal systems and their ability to provide accurate and timely information to their investors," he says.
Strictly speaking, Nasdaq is proposing to modify a structure already in place -- the so-called Eligibility Rule that requires Bulletin Board issuers to be current in their filings with the SEC or other regulatory authorities. Companies that are late or incomplete in their filings may have their stocks removed from the quote service if they fail to comply within a grace period. They can be quoted again once they submit their filings.
But plenty of late-filers are repeat offenders, so Nasdaq is proposing that firms whose stocks are removed from the Bulletin Board twice in two years would also be made ineligible for quotation for a year.
Nasdaq first addressed proposals for late filers on the Bulletin Board in January and submitted an amendment last month after discussions with the SEC.
Business owners say the crackdown is justifiable, but some question the penalty Nasdaq intends to mete out.
Placing companies "in a penalty box for a year" by preventing them from being quoted unfairly punishes all their shareholders and investors, says James "Drew" Connolly, executive director of the CEO Council, an advocacy group for small public companies. "And during that one-year period there's no incentive for a firm to craft timely disclosures, so it's really an arbitrary time line that doesn't achieve its purpose." Mr. Connolly is also president of IBA Capital Funding, a consultant to small companies.
The proposed rules are fair as long as they provide some leeway for companies that file late for legitimate reasons or because of matters truly beyond their control, says Steven Rash, chairman and CEO of Power3 Medical Products, a Texas biotech firm.
"Small companies have much more pressure to get their quarterly and annual reports filed on time, because we don't have the resources of larger companies, and it's hard to get auditors to fit us into their schedules when they have bigger clients to attend to first," Mr. Rash says. Power3 recently missed its deadline for filing its annual report because of a last-minute dispute with the former auditors of a firm it acquired. Its shares were removed from the Bulletin Board last week and are now quoted on the Pink Sheets.
Nasdaq says it has noted the challenges smaller companies face in complying with Sarbanes-Oxley and the problems they face finding auditors.
arnie70: IPII
I sold about 60% of my sizable position in IPII but am holding my remaining shares. I think the stock will be range bound for the short term, and so I've also established a small trading position. I bought a few shares in the low 17's today, and will accumulate more if it goes lower. Also looking to sell if it spikes up again.
I visited my father over the weekend in Bradenton, Florida. There's a huge amount of construction going on in that area along with Sarasota just to the south. I was quite impressed. But also noteworthy is how many homes are unoccupied ... clearly there are plenty of 2nd homes that are vacant in the warmer months.
New and existing home sales figures for May are due out later this week and will likely be strong. It could spark a rally in the sector, or a pullback, depending on the figures.
MSGI: ERS
ERS has lots of competition, so I think they'll be forced to lower prices in line with the drop in aluminum prices. That could mean pressure on gross margins due to inventory acquired at higher prices. It's tough to forecast what their earnings will be for the June quarter, but I think a sequential decline is highly likely.
The good news is that the stock has been 'discovered' and trades at vastly greater volume (about 20x) than it did before the Q1 earnings blockbuster. The chart continues to impress. The much broader shareholder base and higher volume will likely permit it to keep a higher PE than the low PE that it had historically prior to Q1. Good luck, $20 seems possible, but a sharp reversal in the chart seems more imminent the higher it goes ....
avandalay05: ERS
ERS was among my favorites in the 3's and 4's, but fundamentally it's gotten ahead of itself, imho. Aluminum prices have fallen dramatically these last 2 months, so next quarter could be a disappointment.
Technically however the stock continues to act extremely well, with new 52wk highs day after day on heavy volume. The daytraders have found this stock and may continue to drive it higher.
I had a large position, but got out too early. Sold my last few shares at around 11 on Friday, but averaged out at around 8. I was too worried about the changing fundamentals in the aluminum sector, and paid too little attention to the strong chart ... upward momentum on heavy volume.
Good luck, but I'll be watching from the sidelines. Who knows how high it will fly, or how much it will correct if the momo investors get out suddenly.
Ameritrade likely to merge with Waterhouse
The scrum for control of the electronic brokerage business continued through the weekend, with Ameritrade Holding Corp. close to a deal to merge with TD Waterhouse USA but E*Trade Financial Corp. is still in the battle.
Under the most recent deal being contemplated, TD Waterhouse, New York, would put its business under the umbrella of Ameritrade, Omaha, Neb., in exchange for one-third of the new company, according to people familiar with the negotiations.
Ameritrade CEO Joe Moglia discusses the inevitable trend toward consolidation among online brokerages.
Ameritrade shareholders would also receive a $1-a-share special dividend, this person said, and another provision being discussed would require TD Waterhouse to increase its ownership stake in the merged company over time. A deal announcement could come within the next few days, according to these people.
A spokeswoman for TD Bank, the Toronto-based parent of TD Waterhouse, said her firm "does not comment on market speculation." An Ameritrade spokeswoman had no comment.
In the meantime, Ameritrade also has been discussing a potential combination with E*Trade, according to another person familiar with the negotiations, but Ameritrade and E*Trade have been in on-and-off talks since May, and those talks are very fluid. Ameritrade's board is divided about what course to take, according to another person familiar with the situation.
It is possible that E*Trade could pursue a hostile bid for Ameritrade should a deal between the two not materialize, according to two people familiar with the matter. Such a gambit could be a longshot, because of the roughly 30% of the company still controlled by the Ricketts family, the founders of Ameritrade.
Vicious competition, falling commissions and a limp stock market have weighed on the online-brokerage business in recent years. In gobbling up one another, online brokers are betting they can cut costs and boost profitability. E*Trade, for instance, estimated it could generate $650 million in cost savings and new revenue by combining forces.
The Ricketts family, however, has proved wedded to keeping significant control over the future of the industry. This month, E*Trade sweetened a previous bid for Ameritrade, offering 49.5% stake in the combined company and $2 billion in cash. The offer was rebuffed in favor of negotiations with TD Waterhouse. Yesterday, an E*Trade spokeswoman had no comment.
THK +.33 to 3.05
Just a few days ago THK traded as low as 1.92. It bounced strongly from that level on heavy volume. It proved to be an excellent buying opportunity. Management is guiding for EPS of .25 this year, even after a weak Q1 with EPS of only .02.
Footwedge: PLCC
It's good to get the publicity, though unfortunately the briefing greatly understates PLCC's holdings in DSTI. They don't own just 50k warrants. In fact they own almost 1 million shares and warrants combined. DSTI is up sharply today (+2.32 to 15.27).
Unfortunately I missed the PLCC spike down this morning. PLCC hit 11.05 and I gladly would have bought more shares near that level, which is below book value, even without this quarter's huge investment gains.
Also noteworthy is PLCC's holding in CTHR which has been strong lately. As of 12/31/04, PLCC held 1.08 million shares. Currently CTHR is trading around 22.
PLCC has about 3.1 million shares outstanding, but a less that 1 million float. Very few shares, and a lot of leverage for investment gains on their diverse warrants, especially DSTI and CTHR. It's going to be a blockbuster Q2 !
THK +.35 to 2.40
Currently the 3rd biggest percentage gainer on the AMEX. It looks like Monday morning's low of 1.92 was the bottom. It was overdue for a strong bounce. I bought a bunch in the 2.05 to 2.15 range, but my GTC orders to buy in the high 1's will likely go unfilled.
TGB: copper at record 16 year highs. China reporting much higher than expected industrial production. Increasingly it appears that the price of copper won't be dropping that much in the 2nd half. I added more shares of TGB today at 1.01.
Molybedenum is also at record highs.
They should be reporting some decent results in coming quarters.
lashterm: TVOC
Early in the rally I was trying to provide some liquidity for sellers and kept a trailing bid near the ask. I got filled at 5.25 and 5.40. Then I started selling at 6.40 and progressively higher. In total I sold about 2/3 of my position with the last sale right at the peak of 8.25.
Arguably the stock is still undervalued at today's close of 7.40, but obviously not the bargain it was yesterday at 4.50. EPS could hit .90 this year, fully taxed and diluted. But the 15 years of oil and gas reserves are the icing on the cake. And the price of oil could go a lot higher over that period of time. Also this stock could eventually move to the Nasdaq.
It was a great find by you many weeks ago ! I was very surprised such a cheap o&g stock was out there. Significantly cheaper even than TREK, considering that TREK's earnings were untaxed, and they were just about out of operating loss carryforwards. Also TREK had about 10 years of reserves versus 15 for TVOC.
I thought TVOC was a compelling buy in the high 3's and low 4's, but the illiquidity and my concerns about the lack of PR and of a possible delisting (like TREK) kept me from really loading up ....
wade: THK
I'm hoping the two companies will work be able to come to an out of court settlement. Maybe THK is having software problems with the new platform and needs to keep the old one, at least short term. If they pay for the service, it seems to me they should be able to work it out. As an outsider I have no idea what the potential impact is, or if the companies are negotiating out of court. But it could well be another reason behind the weakness in the stock price.
livintilidie: CALM
CALM has been a great investment for me. First and foremost on the LONG side during the Atkins craze. Egg prices went through the roof and this stock was a real sleeper, trading at a split-adjusted $2.50 even as egg prices climbed relentlessly higher. It was a great time to buy CALM. Investors seemed unaware of the huge rise in wholesale egg prices until the big earnings got reported. Even then the stock lagged and was undervalued for many months.
Last December I went short CALM in the 12 to 14 range. Egg prices were in the dumps, yet investors seemed captivated by the very low trailing PE. But it was a very popular short, and tough to get shares, but possible with persistance. I am only now beginning to cover my short position, even though the short interest has already dropped very substantially. Clearly the easy money on the short side has been made. But egg prices are at historical lows. Even the usual Easter rise in egg prices didn't happen this year. Big losses are certain to be reported for the May quarter, and probably the August quarter as well. I'll finish covering my short position in the coming weeks and months.
Eventually the market should correct the current supply and demand imbalance in eggs. When egg prices start an upswing, it may be time to go LONG. But I won't go long again unless the stock is significantly lower. I doubt very much we'll see prices rise again anywhere near as much as they did during the Atkins diet craze.
For excellent information on egg prices, visit the NCDA web site ....
http://www.ncagr.com/markets/mktnews/egg.htm
Also, for historic prices and seasonal trends, I can highly recommend the Urner Barry historical price guide. It proved to be an excellent investment for me.
wade: THK strong guidance was out there long before the last earnings announcement, I think dating back to last October. Earnings have been disappointing. I had big profits at $6, but decided to hold because of the GOOG hype, thinking this stock would get swept up in it. The opposite happened. Hindsight is perfect. There are loads of stocks with huge PE's out there, so nothing strange about this one at $6.
THK is very out of favor now, but the charts are suggesting a potential bottom. Only time will tell. With luck, they'll report some strong earnings next quarter, and then maybe some overdue hype can take over.
hweb: TVOC, fortunately for me it went up so fast, that I hadn't sold many shares yet before it 7. So I got to sell as high as 8.25. Amazing. Patience really gets rewarded with these undervalued issues. For weeks it does nothing with many days of zero volume, then today it catches fire. Maybe something's going on behind the scenes, like a cash buyout in the works. Just yesterday somebody sold me a few shares at 4.50 !
lashterm: TVOC
Great find 2 months ago. Just yesterday somebody dumped a few shares on me at 4.50. Today it's getting discovered. I sold a few at 7. Thanks again !
wade: THK
Management has disappointed before, so I wouldn't put it past them to miss guidance, but even if they come close, the stock looks very cheap, down to $2 from a high of 6.25 a few months ago.
The chart also looks like we're at or near the bottom. I've added to my position in the low 2's and have GTC limit orders in the high 1's ... I'm hoping they trigger, but it could be they won't.
TVOC +.89 to 5.39
This Texas oil bargain is getting discovered. Volume has really picked up these last few days. Over 14 years of oil reserves, much more than most of the other microcaps. EPS of .20 in Q1, should increase in subsequent quarters. Book value of well over $2.
Brinker remains bullish
I just received my free copy of Brinker's May Marketimer newsletter and was impressed by his bullish tone. He calls the March to April correction a healthy event, and an opportunity to increase equity exposure saying that investor fear created by the correction has only served to enhance the upside opportunity. He expects the S&P500 to trend upwards towards 1300+ or higher (currently 1200). His sentiment guages are in very favorable territory, and he expects a continuation of the cyclical bull market that began in March 2003.
STV +.61 to 8.30 a new 52wk high on record volume. An impressive breakout. EPS should exceed $1 untaxed this year, and backlog is way up over last year. Company has operating loss carryforwards to shelter it from taxes for many years into the future.
wade: IPII has become a daytrader's stock. A big percentage of the float exchanges hands each day. I was fortunate to have sold some shares in the low 20's and just bought back a few at 17. Will be buying back more on the way down ....
wade: TMFZ
All mortgage companies have interest rate risk. But increasingly analysts think the Fed has only 2 or 3 rate hikes left. TMFZ is at a big discount to the sector, growing at a huge rate, and is likely to move to the Nasdaq soon. Q2 should be a monster, given the strong seasonality and the bonus of a surge in refinancing activity due to near record low 30 year rates.
THK looks like it may be in the final phase of a major downtrend. I started bottom fishing today and picked up some shares at 2.05. Volume is very high with a strong bounce off the 1.92 level. It will be interesting to see if that was the bottom, or how much lower it goes.
If management guidance for EPS of near $0.25 for the year is correct, the stock will be trading much higher by year end. Plenty of risk though, with all the acquisitions they've made, and the complexity of consolidating them.
PDGE holding up fairly well, now -.06 to 1.24. This was their seasonally weak quarter, so I think earnings were not too much below expectations. However the 10Q indicates backlog at about $35M, down sequentially from $38M on 1/31/05. It appears the hurricane work has been pretty much completed.
wade: risk is present in every investment, but I agree, more so in some than others. For example, ERS was an obvious choice in the 3's and 4's with aluminum prices soaring and a low trailing PE. It seemed like a very high percentage play at those prices.
I'm in LMIA, but not for a double. I think there's little downside risk at the current price, but a good chance for a 30%+ gain over the next few months, imho. I can be happy with that.
BXC looks very undervalued in the building supplies sector, and I like the leverage that the December options provide. I hold a bunch of the December 10 calls.
TMFZ should have a blockbuster Q2 and will hopefully soon move to the NasdaqSC, so I think it's an excellent risk/reward at around 3. The high potential for a listing upgrade is a big plus, imho.
TVOC seems to be waking up, with very strong volume today (compared to the average), and looks like the cheapest domestic microcap oil play around. They have huge reserves relative to market cap compared with the others ... in other words, you get a lot of oil per buck invested.
GV has great potential for some strong quarters ahead as their Florida real estate development profits kick in, and it still trades at a substantial discount to tangible book value.
Bobwins: THK
I'm holding a significant position in THK which has unfortunately gone from a big winner to a modest loser for me since the start of the year. I made the mistake of adding shares ahead of their AMEX listing and it really backfired on me. Q1 was disappointing and management needs to gain more credibility with a solid 2nd quarter that affirms their earnings guidance. If they can deliver I think the stock will eventually move back towards the old highs around 6.
It may be at a good level now for bottom fishing, and if it goes under $2, I may add to my position. But I also believe there's significant risk that earnings will disappoint again ....
SSKILLZ1: ZONS
Good catch on the CEO's purchase of 50k shares at 3.80. That's quite encouraging as was their strong Q1, in what is a seasonally weak period for them. I still hold some shares, though I took a loss on part of my original position before the Q1 results were announced.
wade: LMIA
Conversely, LMIA would benefit if the price of raw materials goes down. Both steel and aluminum prices have fallen dramatically in the last few months, so in the near term raw material prices should improve gross margins and boost earnings.
Knowledge: PLCC
DSTI has been heading up like a rocket, and no doubt it will give back some gains. But between CTHR and DSTI, investment gains for PLCC in Q2 are sure to be huge.
The earnings announcement will certainly surprise many investors who don't follow PLCC holdings that closely. We could see a big spike up in PLCC when the earnings get announced in August.
Knowledge: PLCC's stake in CTHR is much larger than in DSTI, in dollar terms. As of 12/31/04 PLCC owned 1.08 million shares of CTHR which is now trading at around $19. Of course they've likely sold some of their shares, but it's still been a hugely profitable holding. Investment gains to be reported for Q2 will be a monster !
Stock is getting record volume today and is the 4th leading percentage gainer on the Nasdaq. That's sure to get it some more attention.
TVOC finally getting some good volume on a strong move to a 52wk high. Still looks like the cheapest domestic oil play out there .... EPS of .20 in Q1, fully taxed and diluted. Stock now trading around $5. Nice find by lashterm 2 months ago ... I picked up some shares at 4 back then, but the very thin volume held me back from buying more. But the volume has been picking up these last few days ...