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Bobwins: BWLRF re ZINC and INDIUM
Worldwide Indium production is primarily a byproduct of ZINC processing according to what I've read. Here's an interesting article on the subject ... at $1000 per kilo, hopefully Breakwater will be cashing in ...
HONG KONG, Feb 2 (Reuters) - The government of Zhuzhou city in China's southern Hunan province has shut down five indium plants for a month because of power shortages and pollution concerns, trade sources said on Wednesday.
They said about 10 indium plants in nearby Xiangtan city had also been shut down for the same reasons.
The total capacity of the closed indium plants was not immediately available. The two cities are near the capital city of Changsha.
The Zhuzhou government had ordered all indium plants in the city to close between Jan. 27 and Feb. 28, the sources said.
Chinese indium suppliers say they expect prices to smash new records this year on strong demand from Asian flat-screen TV and computer manufacturers. The closures may fuel the price further.
Zhuzhou and Xiangtan are two main indium producing cities in China, which supplies about 40 percent of world demand.
Traders estimated China produced more than 200 tonnes of primary indium last year, mostly as a by-product of zinc.
Traders in Europe said spot indium prices were hovering around $1,000 a kg, against $875-$925 late last year.
"The market is being pushed on the supply side at the moment, not on the demand side. This (closure) underlines the supply deficiency, and the price will go up," a European end-user said.
"We're getting offers above $1,000/kg on the table now, and after the festivities (Lunar New Year) when the Japanese buyers come back to try and secure new long-term contracts, they will find that it is a different game." he added.
Production at Zhuzhou Smelter, China's number two indium producer aiming to make 20 tonnes this year, remained normal, a company official said.
"We do not need to shut down...we have a special facility to control emissions," he said.
But power shortages have forced Zhuzhou's listed Zhuye Torch Metals Co. Ltd. <600961.SS> to temporarily lower zinc production rates by a third.
The sources said Zhuzhou and Xiangtan were suffering from a drought which was worsening water quality of the already polluted Xiang River which runs through the two cities and Changsha. The river also is the source of drinking water for local people.
Waste from indium plants to the river was threatening drinking water for more than 100,000 people, a report from a newspaper in Zhuzhou said.
The simple technology of indium production and high prices of the metal had attracted unauthorised operations in Zhuzhou, the report said.
Trade sources said the indium plants in Zhuzhou and Xiangtan bought slag from Chinese zinc smelters to produce indium, a soft, silvery-white metal, causing serious pollution problems to the cities and Changsha.
ZEUS and MUSA continue to trend up after stellar earnings reports on Monday. But they still sell at trailing PE's of under 5, a significant discount to peers elsewhere in the steel sector. They have some catching up to do to other steel processor like TONS, up 200% over the last several months. The MUSA warrants (MUSAW) are doing especially well, of course. Up 60% this week, due to the added leverage they provide.
otcbargains: SWTX
I think this is a tricky stock. Investor perceptions about the risks vary significantly, imho. If their guidance is on target, or even conservative, I think this stock will ultimately head much higher. But it's a very competitive sector with many variables that are constantly changing. They have their share of challenges ahead. I'll be watching the stock for a good entry point over the next 10 weeks, if the opportunity presents itself. Time will tell. Good luck.
Bobwins: BWLRF
Indium, a precious metal that is a byproduct of ZINC mining, was mentioned on the SWTX CC as being in short supply, hence a 10x rise in price to $1000 per kilo in the last 2 years. It's now fully 20% of their COGS ! Does Breakwater produce much Indium ? That could really boost their earnings further, as it's rising in price even much faster than ZINC. Could Indium become a significant profit contributor for them ?
PS You wouldn't be more partial to BWLRF just because it starts with your initials, 'BW', would you ? Factors like that can have a subconcious influence, even if you're not aware of it. (just kidding)
otcbargains: SWTX
Do you mean in Q1, or the just reported Q4 ? Q4 was great, but obviously is not representative of what Q1 will look like. I think the stock will drop ahead of, or upon the Q1 report, which they gave weak guidance for. Gross margins are expected to drop into the low to mid 30's and revenues are seasonally weak, so EPS may be pretty low for Q1. I'm watching from the sidelines for now, but the stock is already down .12 from its morning high of 1.41. I think that at some point between now and the 5/15 Q1 report, the stock will dip significantly.
wade: SWTX
There are plenty of risks with SWTX, but I think there are fewer stocks than you imply with a forward PE of 5. Value is getting tougher to find these days. I've had most of my success with low PE stocks. In fact, I think the biggest winner from this board YTD is WGMGY, up over 200% since Jan 1. The PE was way too low on that stock, and the market has corrected for it ! Low PE stocks can be a bonanza, and I've benefitted greatly from this board. WGMGY is just one example.
Big revenue growth is not in the cards for SWTX. ASP's are dropping significantly for their plasma displays. But adjusted for special items, management indicated that EPS would have been $0.15 for 2004. If they meet the high end guidance of $0.25 in 2005, that's 67% bottom line growth with a PE of 5. Of course, that's an optimistic scenario, fraught with potential pitfalls. Who knows how high the price of Indium will go ? Q4 gross margins are at a peak partly due to special circumstances, and not likely to be repeated. But they're not forecasting 4x $0.10 or $0.40 for 2005. If they did, the stock would be zooming.
I'm not getting back into SWTX today, but may take a small position if it dips enough.
echos: TALL
I was very impressed by your post. TALL's expenses seem to be well short of what might be required to provide 'excellence' in software maintenance and support of such a diverse product lineup. No doubt they are taking many shortcuts that could ultimately haunt them and scare away customers. I own no shares of TALL, but had been considering taking a small position. I now have a better perspective of the Company, and might still buy a few shares, but on a somewhat different premise. A good PR job by the Company might still lead to short term gains in the stock price, but their long term outlook would seem to be fraught with uncertainty.
PS I spent 18 years with IBM in network support, but also dabbled in software development. I still enjoy writing code periodically for my own use, and consider it to be a form of mathematical poetry.
SWTX CC highlights
I listened to the call, though somewhat casually, since I no longer own any stock, but was impressed by the Q4 results. Here are a few key points :
- Share count 32.7M as of 12/31, and expected to grow no further.
- Guidance for '05 is for 10% revenue growth, or more if new customers come onboard. Working against the revenue growth are declining ASP's of displays (-20% to -30%) in a very competitive sector. But unit sales should be up sharply.
- Net Income is expected to range from 10 to 13% of revenues ... hence EPS guidance of $0.19 to $0.25 for the year. If they make the high end, that's a forward PE of under 5 based on today's closing price of $1.18. And management surprised to the upside in Q4, so maybe they're being overly conservative. But the future is tough to predict in this sector ...
- Indium has grown to 20% of COGS due to a 10-fold rise in the price of this metal over the last 2 years. Now selling at $1000 per kilo. Company is exploring alternative metals, but it's at least a year away from application.
- Plentiful NOL's, so little or no taxes for several years.
- CAPX spending to rise to $1M in '05 from $400k last year.
- Q1 is seasonally weak with lower revenues and tighter margins ... so don't look for a repeat of Q4. Gross margin guidance is for low to mid 30's.
I may buy back into this stock on weakness, but it could rally tomorrow based on the big Q4 surprise. I may wait for their seasonally weak Q1 results before I get back in. Good luck to all shareholders of SWTX !
Bobwins: CPE
Darn, 40% is a lot of hedging. Of course a hedge at $40 may not consider the proceeds of selling the futures contract, so it may translate to a significantly higher price than $40, depending on when they sold the contracts.
lentinman: ACSEF
There's always risk ahead of an earnings report, but their past guidance has generally been too conservative, and hopefully that will prove to be the case again this time. The y/y comparison for Q4 and the whole year should be excellent based on their remarks and given the 9mos results. But I'm not taking a large position yet, but will await the results first, which last year came out on 2/24 ... so hopefully any day now ...
hweb: SWTX
I'm very surprised at the strength of their Q4 given all the pessimism. CC guidance will be the key, but the PR certainly has a positive tone.
SWTX purchases look like 'assignments'
The purchase prices are in the $1.70's, way over the market prices. Typically that means they were 'forced' purchases due to some outstanding put options at that strike price. It's just a guess on my part.
stock_peeker: CGIH
I think that's it ... GOOG, YHOO and FWHT all down today on downgrades and an earnings disappointment from FWHT. I'm accumulating more CGIH at this level. Hopefully they'll be on the AMEX within the next few months.
WGMGY +.26 to 1.75
I got out of this stock way too early as it broke over $1. It's now up 200% since Jan 1 ! What a flyer !
WIRX to apply for AMEX listing
That should give the stock a further boost if they get accepted, though several other's like CGIH and AOBO have applied and been in 'limbo' for a long time.
DGIX traded a 280k share block at 1.05
This stock is being accumulated by institutional or wealthy individual investors. That bodes well for more liquidity and a higher valuation down the road ...
lentinman: ACSEF
I've been accumulating in the low 6's. This stock was a winner for me late in '03 into '04 when they came in with a series of strong earnings reports. The stock is down over 50% from its 52wk high of 12.59 and is showing strong support at this level. Evidently the Company's guidance for a sequential decline in Q4 revenues is the reason for the big pullback, but they also indicated that growth should resume in Q1. EPS of $0.56 for 9mos is pretty good for a $6 stock, especially considering the huge y/y growth and the hot digital motion control sector they're in ... Q4 results are due out shortly, but I think the expected temporary lull in growth is already fully in the stock. The forward guidance will be the more important thing ... from the Q3 PR ....
Revenues for the third quarter were $4,108,000 compared to $2,510,000 recorded in the third quarter a year ago. Net income in the third quarter of 2004 was $735,000, or $0.22 per share, compared with net income of $276,000, or $0.10 per share in the third quarter a year ago. Revenues for the nine months period ended September 30, 2004 were $10,792,000, compared to $6,590,000 in the same period a year ago. Net income for the nine months period ended September 30, 2004 was $1,877,000, or $0.56 per share, compared to $507,000, or $0.18 per share in the same period a year ago.
This is the seventh quarter in a row with sequential increase in activity and results. Based on softened demand in the last few weeks and on inputs from our leading customers, we expect to see a decrease in revenues in the fourth quarter relative to the third quarter, but a significant increase relative to the fourth quarter of 2003 and renewed growth in the quarters afterwards.
hweb: CAMT looks good for bottom fishing. I definitely think it's a good buy, expecially if it goes too much lower. I've got a GTC limit order at 3.50.
lentinman: CPE
I have a positive view of the Company and took an intial position today. But I did think it relevant to mention the tax issue, since it appears that their earnings will soon be taxed. I was aware of it before I bought the stock. Q2 of 2005 might even match the $0.58 they earned last year, even with the new burden of a 35% tax rate. Production should be greater and oil prices higher. Plus, as Bobwins indicated, a stock like this, trading on the NYSE, deserves a higher PE than just 7 or 8 going forward, given their growth prospects. And it's already got analyst coverage, with more attention likely as the market cap rises sufficiently to pick up major brokerage house coverage. It's still early and the time to get in is now, imho. Thanks to Bobwins for this good find !
Bobwins: CPE
Thanks for this one. It looks very promising and I bought an opening position this morning. Analyst estimates for EPS of $2+ in 2005 are impressive for a $15 stock. Lots of prospects for production increases. One caveat is taxes. Last year's Q2 of $0.58 EPS was untaxed, but the taxman cometh unfortunately. Looks like they are near the end of their NOL carryforwards and deferred tax assets, so a 35% tax rate starting real soon. Nonetheless, I'm sure analysts are well aware, and their forward estimates are fully taxed. Oil prices are much higher now than last year's Q2.
The Company follows the asset and liability method of accounting for deferred income taxes prescribed by SFAS No. 109 “Accounting for Income Taxes”. The statement provides for the recognition of a deferred tax asset for deductible temporary timing differences, capital and operating loss carryforwards, statutory depletion carryforward and tax credit carryforwards, net of a “valuation allowance”. The valuation allowance is provided for that portion of the asset for which it is deemed more likely than not that it will not be realized.
SFAS No. 109 provides for the weighing of positive and negative evidence in determining whether it is more likely than not that a deferred tax asset is recoverable. The Company had incurred losses in 2002 and 2003 and had losses on an aggregate basis for the three-year period ended December 31, 2003. However, in December 2003, the Company refinanced nearly all its highest cost debt, incurring an early extinguishment loss of $5.6 million, but achieving significant interest savings in the future. In addition, the first two of the Company’s deepwater projects began production in November 2003, resulting in a significant increase in 2004 production as compared to 2003. Nevertheless, relevant accounting guidance suggests that a recent history of cumulative losses constitutes significant negative evidence, and that future expectations about income are overshadowed by such recent losses. As a result, the Company established a valuation allowance of $11.5 million as of December 31, 2003. The Company revised the valuation allowance in the nine-month period ended September 30, 2004 as a result of current year ordinary income, the impact of which is included in the Company’s effective tax rate and resulted in no net income tax expense (benefit) for the period.
Bobwins: Thanks for BWLRF. ZINC prices are indeed soaring, and they should be posting big numbers for the March quarter, and beyond. I initiated a position in the stock this morning.
TREK 10Q just filed
EPS of .13 for fiscal Q1 versus .07 last year. Too bad they've decided to delist from the OTCBB, or the stock would be much higher than $1.80.
Bobwins: TGB
I think patience will be rewarded with this stock. I like the fact that they've expensed the startup costs, rather than capitalized them. This way they avoid having to show ongoing amortization expense, and it will make the bottom line look better. They should show some good profits for the March quarter, and June will be better, imho. From the PR ...
The first quarter results reflect the re-start and re-commissioning activities that were underway throughout the period. Although the start-up costs could have been deferred or capitalized, management has chosen to expense them, which accounts for the loss in this quarter. Advance payment was received for copper concentrate shipped in early December, and this off-set some of the re-start costs.
monsteryear1: EXX/A
Can you post a link or copy of the Fortune article ? I respect Segal ... he's a smart businessman, and the insider purchases are substantial. Nonetheless, EPS was .06 in Q3 vs .14 the prior year, and that's even before they lose another 20% of the revenues later this year. I think it will be tough to replace the business. Lots of competition from bigger players. But I did well with EXXA the first time around, and will be watching for positive developments. Good luck.
Steel sector strong on takeover rumors
NEW YORK, Feb 16 (Reuters) - Shares of U.S. steel manufacturers soared on Wednesday amid speculation about a new round of mergers in the industry, which is currently booming.
In New York Stock Exchange trading, U.S. Steel Corp. (X.N: Quote, Profile, Research) stock closed up 7.33 percent at $56.55, Nucor (NUE.N: Quote, Profile, Research) was up 5.18 percent at $59.68 and AK Steel (AKS.N: Quote, Profile, Research) was ahead 6.33 percent at $17.30. On Nasdaq, Steel Dynamics (STLD.O: Quote, Profile, Research) closed up 7.49 percent at $41.50.
"The steel stocks are playing off a couple of positive articles that recently appeared in Forbes and Businessweek Online," said Herb Kurlan, president of MDNH Partners, an options market-making firm based in San Francisco.
"They indicate that mergers in the steel industry are not over yet and that it looks like prices can go higher."
In a Businessweek Online story, Guy Dolle, chief executive of European steelmaker Arcelor (CELR.PA: Quote, Profile, Research) , was quoted as saying the emergence of Mittal Steel (MT.N: Quote, Profile, Research) as the world's largest steel producer "is a very positive signal to the industry that it has to move and consolidate.
"In coming years, you will see a speeding up of mergers and acquisitions in the steel industry,' Dolle was quoted as saying.
The BusinessWeek article said Dolle was determined Arcelor will be among the steel titans surviving the merger wave. It said he wanted to continue the merger process in Asia and North America, possibly even striking a deal with U.S. Steel or Nucor.
Now, with steel prices soaring on economic growth in China and elsewhere, the time could be right for the next stage of global consolidation. Some analysts believe that over the next few years, the industry will evolve into one of 4 to 6 giants, each with 80 million to 100 million metric tons of capacity.
Mittal Steel, which quadrupled its profit in 2004, said last week it expects to complete its transformation into the world's biggest steel producer in six weeks. That's when it estimates it will close on its $4.5 billion acquisition of International Steel Group Inc. (ISG.N: Quote, Profile, Research) for $4.5 billion and merge the U.S. steel maker with the other assets of Indian-born steel magnate Lakshmi Mittal.
The purchase of ISG is the final step in the bid by Mittal to surpass Arcelor as the biggest steel producer and Arcelor may have to increase its size to compete.
Earlier on Wednesday, Arcelor, which was created in 2002 from a merger of Luxembourg's Arbed, Spain's Aceralia and France's Usinor, said it is in talks with Russian companies to expand its presence on the Russian steel market.
Charles Bradford, a steel industry analyst with Bradford Research/Soleil, said Arcelor was also very active in Brazil, looking for acquisitions and joint projects.
As for the U.S. steelmakers, "I know some companies are for sale," said Bradford, but he questioned the timing.
"You really want to buy at the peak of the cycle?" he asked, noting that many industry observers believe the current cycle of high prices will continue at least through the first half of 2005.
However, Nucor, which saw its 2004 net profit surge 15-fold, is certainly on the prowl for acquisitions, he said.
The largest U.S. mini-mill operator has set its sights on Mexico's No. 3 steelmaker Hylsamex (HYLSAMXL.MX: Quote, Profile, Research) and also Marion Steel, a small steel producer in Ohio.
In addition, Nucor has already announced it is in the process of acquiring the assets of Wisconsin-based Fort Howard Steel, another small steel bar producer.
And last month, Nucor said its Castrip process, which helps steelmakers make flat-rolled, carbon and stainless steel sheets at very thin gauges, was now commercially viable.
It said it was looking for a second location for a Castrip operation in the United States and plans to set at least one joint venture overseas in 2005 to use Castrip technology. (Additional reporting by Doris Frankel in Chicago)
Copper hits a 16 year high of 1.49
TGB should have a nice March quarter ... stock up again today, ahead of the December quarter earnings report. Management should have good things to say looking forward.
RS in with strong Q4 results and a bullish outlook
The steel sector continues to do well with companies giving strong guidance. Steel prices remain high. I'm looking forward to earnings reports from ZEUS and MUSA, both due out on the 2/22. They look like the cheapest plays in the sector, imho.
LOS ANGELES--(BUSINESS WIRE)--Feb. 17, 2005--Reliance Steel & Aluminum Co. (NYSE:RS - News) reported today its financial results for the fiscal year and fourth quarter ended December 31, 2004. For the 2004 fiscal year, net income was $169.7 million, or $5.19 earnings per diluted share, marking the Company's best-ever financial results. This compares with net income of $34.0 million, or $1.07 earnings per diluted share for the 2003 fiscal year. Sales for 2004 totaled a record $2.94 billion, an increase of 56%, compared with 2003 sales of $1.88 billion. The 2004 fiscal year financial results include in cost of sales a pre-tax LIFO expense amount of $110.8 million, or $2.13 per diluted share.
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For the 2004 fourth quarter, net income was $43.0 million, compared with net income of $9.7 million for the same period in 2003. Earnings per diluted share were $1.31 for the three-months ended December 31, 2004, compared with earnings of $.30 per diluted share for the same period last year. Sales for the 2004 fourth quarter were $742.8 million, up 53%, compared with 2003 fourth quarter sales of $485.2 million. The 2004 fourth quarter financial results include in cost of sales a pre-tax LIFO expense amount of $18.3 million, or $.39 per diluted share.
David H. Hannah, Chief Executive Officer of Reliance said, "We are very pleased with our 2004 record-breaking financial results. 2004 was quite a year, unlike any other we have seen. Unprecedented high prices for some of our metal products coupled with improved demand from our customers contributed to our exceptional results. The fourth quarter's operating results were stronger then we anticipated, primarily because of higher revenues and better gross profit margins. Additionally, the Company's fiscal 2004 effective income tax rate decreased slightly compared to 2003 and that also benefited the fourth quarter results.
"We are optimistic that pricing and demand for our products will remain at favorable levels in 2005. While we do not expect the benefit of rapidly accelerating metal prices as we experienced in 2004, we do believe that 2005 will be another outstanding year when compared with all years other than 2004, with full year 2005 earnings per diluted share above the analysts' current consensus estimate. Further, we estimate earnings per diluted share for the 2005 first quarter in a range of $1.05 to $1.15," Hannah concluded.
Livintilidie: DGIX
One more thing about my conversation with the CEO ... I told him that stockholders were eager to see some positive PR about the strong results, and he said that they will definitely be issuing a Q4 earnings press release. That will certainly help to get this stock more visibility. It's good to see the stock breaking over $1 this morning.
monsteryear1: EXXA
I used to own EXX/A, and the recent insider buying is certainly encouraging. The big question is whether they'll be able to replace a large chunk of business due to be lost later this year. Also, even excluding that business, revenues and EPS have been on a steady decline. A lot of negatives with this stock, imho.
Livintilidie: DGIX
The stock is certainly acting well ahead of Q4 earnings due out in March. The large block trades indicate some significant new investors are taking a position via 'back office' trades ... and they will often 'underwrite' their established position later by buying on the open market, where it's easy for them to move the stock higher.
I called the CEO last week and he said order rates were very strong ahead of the holidays, though he could of course not provide any details, other than saying that he felt comfortable with Taglich Brother's EPS estimate of $0.14 for 2004. That's fully taxed and diluted, pretty good for a stock at $0.91. Also a strong balance sheet with TBV over $0.62 and rising.
Taglich Brother's 9mos price target is $1.50, very realistic given the strong fundamentals and low PE, imho.
TGB +.09 to 1.32
Company will be reporting Fiscal Q1 results tomorrow. It should be their last losing quarter, and hopefully they'll have positive things to say going forward. Copper prices have been very strong, breaking over 1.48 today.
VANCOUVER, British Columbia--(BUSINESS WIRE)--Feb. 14, 2005--Taseko Mines Limited (TSX VENTURE:TKO - News; AMEX:TGB - News) announces that Taseko will be releasing the financial results for the three months ended December 31, 2004, the first quarter of its 2005 fiscal year, on February 17, 2005. This information will be released concurrently with the audited results of the Company's 2004 fiscal year ended September 30, 2004.
STV backlog up sharply
Stock is trading around $5.90, with EPS of $0.80 to $1.00 likely in 2005. Here's this mornings PR ...
HOUSTON--(BUSINESS WIRE)--Feb. 16, 2005--Sterling Construction Company, Inc. (AMEX:STV - News), ("Sterling" or the "Company"), today announced that it closed 2004 with a record backlog of $232 million, up 65% from the level of $141 million one year earlier.
Joseph P. Harper, Sterling's President & COO noted, "Beyond the record backlog, we can point to a number of important accomplishments. Sterling is successfully competing for and working on much larger multi-year jobs, including our largest ever award of $58.5 million from the Texas Department of Transportation, which runs through 2007. We also measure success in terms of geographic expansion and this is quite evident from the growing number of contract wins in the Dallas and San Antonio areas. With the size and duration of our contract backlog, we are better able to schedule and execute jobs in the most cost-efficient way possible."
Patrick Manning, Chairman noted, "The bidding climate in Texas remains very strong with a positive outlook for the future, including new funding of $21 billion over ten years that has been authorized for important civil construction projects in general and highway work under Texas's Statewide Mobility Program. We have the know-how and equipment to compete for larger, more complicated jobs in support of a broad range of highway, bridge, water and sewer projects."
Management also reported that it plans to release fourth quarter and year-end results during the week of March 21st and will conduct a conference call to discuss Sterling's financial performance and the outlook for the Company. When the date and conference call details are finalized, a news release will be issued.
lil_mini_ditka, check out my post 3984 ... there's no index that I'm aware of but the weekly reports by pfbasse are probably a good equivilant.
larrybaz: JLN
Thanks for posting so promptly after Jaclyn issued their earnings press release yesterday. Your post came at 3:56pm, just 4 minutes after their PR had hit the newswires. I saw your post about 90 seconds before the close of trading, and immediately decided to dump my massive 500 share position with a market order. My frantically entered sell order beat the 4pm close of trading by just a few precious seconds and was executed at a price of 6.33. Of course this morning the stock gapped down to open at 5.00 and then went still lower. Thanks again for your prompt post and quick analysis.
lentinman: Thanks for that detailed explanation of your view on downside 'gaps'. It makes a lot of sense. As for CKCM, I had a large position last summer when for months it traded in upper 4's to low 6's. I got impatient and then made some small profits trading the range. However when they filed that 8K showing terrible pro forma earnings including their acquisition I dumped ahead of the Q3 earnings, which I thought would be disappointing. Clearly management shifted expenses backwards to create a better Q3. I was so acustommed to the old range, that I didn't buy back in around 6 after decent Q3 results, thinking it would drop again. Then finally it got attention and momentum took it into the 20's, leaving me on the sidelines. Oh well ! I'd consider it under $10 if it gets there.
DGIX: Large Block Trades
It's a good sign when large blocks are trading. It means the security is changing hands among large investors who then typically drive the stock price higher on the open market after taking a significant position via 'back office' pre-arranged trades. The buyers would normally be 'strong hands' who will only sell at higher prices.
otcbargains: CGNW
Thanks for those highlights. I noticed that o/s shares have remained constant with last quarter, and that EPS was $0.024 for the quarter (versus .02 in the press release) and $0.051 for 6 months. One more quarter like this, and the trailing PE will drop under 5, giving the stock significant visibility in low PE stock searches. I think it will be on the uptrend ahead of fiscal Q3, and especially afterwards.
lentinman: filling the 'gap'
Just curious about the technical view on gaps created when a stock opens sharply lower on bad or disappointing news. Recent examples are CKCM and JLN. Would technicians of stock charts expect these gaps to get filled ? Especially in the case of JLN, with the bleak guidance given by management for the 2nd half of the fiscal year, there seems little fundamental reason for the stock to fill the gap anytime soon.
bucfan33617: It's a healthy thing to have a few losers. It keeps us all in touch with reality, which is vital for long term success.
bigpike: ETEC
Thanks for spotting that one time charge of 470k. It makes a big difference. Also they mention that the big rise in inventories is due to a rollout that began in January, which should boost the March quarter ... here's the text from the 10Q ....
Sales, general and administrative expenses increased by 5.0%, or $167,019, to $2.51 million for the quarter ended December 31, 2004. This increase is mainly due to a one-time charge of $470,000 associated with the sub-lease of our New York office located at 880 3rd Avenue. This charge is a present value of the difference between obligations to the landlord at 880 3rd Avenue minus the expected future rental income to be received from the sub-tenant through June 30, 2008. Without this one time charge of $470,000, our sales, general and administrative expenses would have decreased by 9.0%, or $302,981, to $3.05 million for the quarter ended December 31, 2004 as compared with $3.35 million for the quarter ended December 31, 2003.
During the fourth quarter of our fiscal year ending March 31, 2005, our contract with the State of New Jersey was extended through June 30, 2005, and we expect our revenues from commercial customer base will continue to grow, and to roll-out over 1200 computers to a school district in GA. Our inventory at December 31, 2004 was increased by approximately 350% as compared with the inventory at March 31, 2004. This increase was mainly due to our receipt of products from our distributors that were ordered by a customer for computer roll-out projects starting in January 2005 for a school district in GA.