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I am holding my AYSI and one other stock, but I am planning to unload most of my remaining long positions this week. I think Tim Knight is probably right as far as what happens next. Worth spending 10 minutes to watch this, IMO: http://slopeofhope.com/2010/05/yack-attack.html
Thanks.
Definitely a good week to have some short positions and puts. If you have any short ideas you want to share, you can win a prize for mentioning them in this contest, btw: http://steamcatapult.com/2010/05/05/win-a-copy-of-michael-lewiss-new-book-the-big-short/
Shorted this today at $27.28. Details: http://shortscreen.com/message-board/84-new-short-pxp-plains-exploration-production-co-pxp
Shorted this today at $25.48. Details: http://shortscreen.com/message-board/85-new-short-hgsi-human-genome-sciences-inc-hgsi
Not just yet. I did short a couple of other stocks though today: HGSI ( http://shortscreen.com/message-board/85-new-short-hgsi-human-genome-sciences-inc-hgsi ) and PXP ( http://shortscreen.com/message-board/84-new-short-pxp-plains-exploration-production-co-pxp ).
Looks like the biggest hurdle will be the number of shareholders.
I hate to be one of those people, but they should have written "complement" instead of "compliment".
LOL
Seriously though, I don't think it matters. If they earn another 15 cents the rest of the year, AYSI at these prices would look like a screaming buy to rear-view mirror value investors who screen for ttm P/Es.
It looks like we're out of weak hands
As long as the thesis remains intact, current shareholders are shrugging off mild short-term disappointments. We had a bigger drop at the end of the year, when Q4 came in weaker than expected.
I'm guessing the reason is that back then we had some mo-mo folks who jumped in on the BHP news and were quick to bail, and now the stronger hands are left.
Where are the weak hands?
No fill yet for my $2.29 limit order.
Maybe the wolf can come back and blow on this brick house.
Thought I might get a fill today on the $2.29 limit order I've had open since last week. Maybe not.
$900k or ~5.2 cents per share ( http://thehackensack.blogspot.com/2009/12/alloy-steels-10-k.html )
Late to this, but actually looks like 6.4 cents in Q2 earnings. I was expecting a sequential gain. Looks like a big Q3 could be in the works though. From the 8-K: "orders of $8,650,000 waiting to go into production." If most of that hits in Q3, that would be something.
I'm guessing there were big expenses for Mill #3, but we'll see.
NP, Mikey. I've been using VectorVest recently as well, mainly for TA and timing, to complement my use of the Altman models on Short Screen. I.e., for long positions, I like to see strong Z-scores and strong technicals, and the reverse for short positions.
If AYSI gets a high score from VV, it will come up on some new investors' screens.
Good news and bad news from VectorVest
Bad news first: AYSI has a sell recommendation today, because it dropped below VV's stop price for it ($2.58). If it closes above that, it should get a hold again.
Good news: They had listed AYSI as having a P/E of 999.99 (their default, apparently, for a company with no earnings). That lead to their formula giving AYSI an intrinsic value of about 50 cents. I pointed out to them that AYSI's ttm P/E was about 32x. They then updated the system to show that. They also showed a forward earnings estimate of .08. I e-mailed them again, noting that the company earned more than that just last quarter.
Checking the analysis as of tonight, they have updated their forward earnings estimate to .14 (still too low, I think we all agree) and updated the P/E to 18x (a forward P/E, I guess) and updated AYSI's intrinsic value to $3.55.
It looks like VectorVest's system is still digesting AYSI. I suspect that if we see record earnings in the next 10Q, VectorVest's analysis of AYSI will be updated to a buy. We'll see. Below is from the current analysis report.
Value: Value is a measure of a stock's current worth. AYSI has a current Value of $3.55 per share. Therefore, it is undervalued compared to its Price of $2.52 per share. Value is computed from forecasted earnings per share, forecasted earnings growth, profitability, interest, and inflation rates. Value increases when earnings, earnings growth rate and profitability increase, and when interest and inflation rates decrease. VectorVest advocates the purchase of undervalued stocks. At some point in time, a stock's Price and Value always will converge.
RV (Relative Value): RV is an indicator of long-term price appreciation potential. AYSI has an RV of 1.13, which is good on a scale of 0.00 to 2.00. This indicator is far superior to a simple comparison of Price and Value because it is computed from an analysis of projected price appreciation three years out, AAA Corporate Bond Rates, and risk. RV solves the riddle of whether it is preferable to buy High growth, High P/E stocks, or Low growth, Low P/E stocks. VectorVest favors the purchase of stocks with RV ratings above 1.00.
RS (Relative Safety): RS is an indicator of risk. AYSI has an RS rating of 0.43, which is very poor on a scale of 0.00 to 2.00. RS is computed from an analysis of the consistency and predictability of a company's financial performance, debt to equity ratio, sales volume, business longevity, price volatility and other factors. A stock with an RS rating greater than 1.00 is safer and more predictable than the average stock in the VectorVest database. VectorVest favors the purchase of stocks of companies with consistent, predictable financial performance.
RT (Relative Timing): RT is a fast, smart, accurate indicator of a stock's price trend. AYSI has a Relative Timing rating of 0.95, which is fair on a scale of 0.00 to 2.00. RT is computed from an analysis of the direction, magnitude, and dynamics of a stock's price movements over one day, one week, one quarter and one year time periods. Once a stock's price has established a strong trend, it is expected to continue in that trend for the short-term. If a trend dissipates, RT will gravitate toward 1.00. RT will explode from bottoms, dive from tops, and reflect changes in price momentum. VectorVest favors the purchase of stocks with RT ratings above 1.00.
VST (VST-Vector): VST is the master indicator for ranking every stock in the VectorVest database. AYSI has a VST rating of 0.88, which is fair on a scale of 0.00 to 2.00. VST is computed from the square root of a weighted sum of the squares of RV, RS, and RT. Stocks with the highest VST ratings have the best combinations of Value, Safety and Timing. These are the stocks to own for above average, long-term capital appreciation. VectorVest advocates the purchase of safe, undervalued stocks rising in price.
Recommendation (REC): VectorVest gives a Buy, Sell, Hold recommendation on every stock, every day. AYSI has a Sell recommendation. REC reflects the cumulative effect of all the VectorVest parameters working together. These parameters are designed to help investors buy safe, undervalued stocks rising in price. They also help investors avoid or sell risky, overvalued stocks falling in price. VectorVest recommends that investors buy high VST-Vector, Buy-rated stocks in rising markets.
Stop (Stop-Price): Stop is an indicator of when to sell a long position or cover a short position. AYSI has a Stop of $2.58 per share. This is $0.06 above AYSI's current closing Price. A stock's Stop is computed from a 13 week moving average of its closing prices, and is fine-tuned according to the stock's fundamentals. High RV, high RS stocks have lower Stops, and low RV, low RS stocks have higher Stops. In the VectorVest system, a stock gets a 'B' or 'H' recommendation if its Price is above its Stop and an 'S' recommendation if its Price is below its Stop.
GRT (Earnings Growth Rate): GRT reflects a company's one to three year forecasted earnings growth rate in percent per year. AYSI has a forecasted Earnings Growth Rate of 14.00%, which VectorVest considers to be good. GRT is computed from historical, current and forecasted earnings data. It is updated each week for every stock in the VectorVest database. GRT often foretells a stock's future price trend. If a stock's GRT trend is upward, the stock's price will likely rise. If GRT is trending downward, the stock's Price will probably fall. VectorVest favors the purchase of stocks whose GRT is rising and is greater than the sum of current inflation and interest rates, as shown weekly in our investment climate report.
EPS (Earnings per Share): EPS stands for leading 12 months Earnings Per Share. AYSI has a forecasted EPS of $0.14 per share. VectorVest determines this forecast from a combination of recent earnings performance and traditional fiscal and/or calendar year earnings forecasts.
P/E (Price to Earnings Ratio): P/E is a popular measure of stock valuation which shows the dollars required to buy one dollar of earnings. AYSI has a P/E of 18.00. This ratio may be deemed to be high or low depending upon your frame of reference. The average P/E of all the stocks in the VectorVest database is 66.62. P/E is computed daily using the formula: P/E = Price/EPS.
Companies can't sell their iron ore interests to China without the approval of the Aussie government. But I wouldn't worry too much about this tax. If it will be materially bad for business, it probably won't get adopted. Even Australia's left is fairly pragmatic.
For example, the same Rudd government proposed a strict cap & trade bill that was initially supposed to go into effect last year, if memory serves. It keeps getting put off, and may never be implemented.
The main reason for the AYSI's recent weakness is that not enough investors are convinced by the story yet. If current operational trends continue, and China's voracious demand for iron ore continues, AYSI could earn 35-40 cents or more this year. Too few investors believe that will happen though, otherwise the stock would be close to $4 today.
Part of that is because too few investors even know about this company -- look at how low the volumes are. And another part of that is because some of the investors who do are iHubbers, who are more likely to be skeptical that AYSI is a real company, because so many of the companies discussed here aren't. The recent FINRA investigation news doesn't help in that regard.
That said, my biggest concern here is that the Chinese economy will correct and its demand for iron ore will drop. Gary Shilling made a convincing short-term bear case for the Chinese economy, which I summarized elsewhere yesterday ( (http://shortscreen.com/message-board/77-1999-all-over-again-baidu-inc-bidu[/ ).
FYI, I heard back from the DB manager at VectorVest. She said she'd look into this next week.
NNLX and AYSI were two stocks I didn't see on the VectorVest system a few weeks ago (when I owned them both), so I requested VectorVest add them. They just did that yesterday, so I shared that info on the NNLX board and the AYSI board. That's it. No secret agenda. Had VectorVest given NNLX a buy or a hold rating, I would have still posted the info here.
Paranoia will destroy ya.
Not sure a pre-rev stock couldn't get a buy on VectorVest's system, since they overweight technicals and underweight valuation. But obviously, no automated system is a substitute for qualitative analysis of a company.
NNLX added to VectorVest's database
A few weeks ago, when I owned NNLX, I asked VectorVest to add the stock to its database. They just added it today. Below is a copy and paste from their stock analysis report. FWIW, I still like this story. Got shaken out at 66 cents for a 36% gain, but I would consider getting back in at some point.
VectorVest Stock Analysis of NanoLogix Inc as of 4/29/2010
Value: Value is a measure of a stock's current worth. NNLX has a current Value of $0.30 per share. Therefore, it is overvalued compared to its Price of $0.97 per share. Value is computed from forecasted earnings per share, forecasted earnings growth, profitability, interest, and inflation rates. Value increases when earnings, earnings growth rate and profitability increase, and when interest and inflation rates decrease. VectorVest advocates the purchase of undervalued stocks. At some point in time, a stock's Price and Value always will converge.
RV (Relative Value): RV is an indicator of long-term price appreciation potential. NNLX has an RV of 0.43, which is very poor on a scale of 0.00 to 2.00. This indicator is far superior to a simple comparison of Price and Value because it is computed from an analysis of projected price appreciation three years out, AAA Corporate Bond Rates, and risk. RV solves the riddle of whether it is preferable to buy High growth, High P/E stocks, or Low growth, Low P/E stocks. VectorVest favors the purchase of stocks with RV ratings above 1.00.
RS (Relative Safety): RS is an indicator of risk. NNLX has an RS rating of 0.43, which is very poor on a scale of 0.00 to 2.00. RS is computed from an analysis of the consistency and predictability of a company's financial performance, debt to equity ratio, sales volume, business longevity, price volatility and other factors. A stock with an RS rating greater than 1.00 is safer and more predictable than the average stock in the VectorVest database. VectorVest favors the purchase of stocks of companies with consistent, predictable financial performance.
RT (Relative Timing): RT is a fast, smart, accurate indicator of a stock's price trend. NNLX has a Relative Timing rating of 0.72, which is poor on a scale of 0.00 to 2.00. RT is computed from an analysis of the direction, magnitude, and dynamics of a stock's price movements over one day, one week, one quarter and one year time periods. Once a stock's price has established a strong trend, it is expected to continue in that trend for the short-term. If a trend dissipates, RT will gravitate toward 1.00. RT will explode from bottoms, dive from tops, and reflect changes in price momentum. VectorVest favors the purchase of stocks with RT ratings above 1.00.
VST (VST-Vector): VST is the master indicator for ranking every stock in the VectorVest database. NNLX has a VST rating of 0.56, which is poor on a scale of 0.00 to 2.00. VST is computed from the square root of a weighted sum of the squares of RV, RS, and RT. Stocks with the highest VST ratings have the best combinations of Value, Safety and Timing. These are the stocks to own for above average, long-term capital appreciation. VectorVest advocates the purchase of safe, undervalued stocks rising in price.
Recommendation (REC): VectorVest gives a Buy, Sell, Hold recommendation on every stock, every day. NNLX has a Sell recommendation. REC reflects the cumulative effect of all the VectorVest parameters working together. These parameters are designed to help investors buy safe, undervalued stocks rising in price. They also help investors avoid or sell risky, overvalued stocks falling in price. VectorVest recommends that investors buy high VST-Vector, Buy-rated stocks in rising markets.
Stop (Stop-Price): Stop is an indicator of when to sell a long position or cover a short position. NNLX has a Stop of $0.99 per share. This is $0.02 above NNLX's current closing Price. A stock's Stop is computed from a 13 week moving average of its closing prices, and is fine-tuned according to the stock's fundamentals. High RV, high RS stocks have lower Stops, and low RV, low RS stocks have higher Stops. In the VectorVest system, a stock gets a 'B' or 'H' recommendation if its Price is above its Stop and an 'S' recommendation if its Price is below its Stop.
I noticed that their P/E number looks off (unless they calculate it a different way). I'll e-mail their database manager about that. Maybe that will improve the analysis.
AYSI gets a hold recommendation from VectorVest
From the report:
Value: Value is a measure of a stock's current worth. AYSI has a current Value of $0.52 per share. Therefore, it is overvalued compared to its Price of $2.70 per share. Value is computed from forecasted earnings per share, forecasted earnings growth, profitability, interest, and inflation rates. Value increases when earnings, earnings growth rate and profitability increase, and when interest and inflation rates decrease. VectorVest advocates the purchase of undervalued stocks. At some point in time, a stock's Price and Value always will converge.
RV (Relative Value): RV is an indicator of long-term price appreciation potential. AYSI has an RV of 0.37, which is very poor on a scale of 0.00 to 2.00. This indicator is far superior to a simple comparison of Price and Value because it is computed from an analysis of projected price appreciation three years out, AAA Corporate Bond Rates, and risk. RV solves the riddle of whether it is preferable to buy High growth, High P/E stocks, or Low growth, Low P/E stocks. VectorVest favors the purchase of stocks with RV ratings above 1.00.
RS (Relative Safety): RS is an indicator of risk. AYSI has an RS rating of 0.43, which is very poor on a scale of 0.00 to 2.00. RS is computed from an analysis of the consistency and predictability of a company's financial performance, debt to equity ratio, sales volume, business longevity, price volatility and other factors. A stock with an RS rating greater than 1.00 is safer and more predictable than the average stock in the VectorVest database. VectorVest favors the purchase of stocks of companies with consistent, predictable financial performance.
RT (Relative Timing): RT is a fast, smart, accurate indicator of a stock's price trend. AYSI has a Relative Timing rating of 1.17, which is good on a scale of 0.00 to 2.00. RT is computed from an analysis of the direction, magnitude, and dynamics of a stock's price movements over one day, one week, one quarter and one year time periods. Once a stock's price has established a strong trend, it is expected to continue in that trend for the short-term. If a trend dissipates, RT will gravitate toward 1.00. RT will explode from bottoms, dive from tops, and reflect changes in price momentum. VectorVest favors the purchase of stocks with RT ratings above 1.00.
VST (VST-Vector): VST is the master indicator for ranking every stock in the VectorVest database. AYSI has a VST rating of 0.79, which is poor on a scale of 0.00 to 2.00. VST is computed from the square root of a weighted sum of the squares of RV, RS, and RT. Stocks with the highest VST ratings have the best combinations of Value, Safety and Timing. These are the stocks to own for above average, long-term capital appreciation. VectorVest advocates the purchase of safe, undervalued stocks rising in price.
Recommendation (REC): VectorVest gives a Buy, Sell, Hold recommendation on every stock, every day. AYSI has a Hold recommendation. REC reflects the cumulative effect of all the VectorVest parameters working together. These parameters are designed to help investors buy safe, undervalued stocks rising in price. They also help investors avoid or sell risky, overvalued stocks falling in price. VectorVest recommends that investors buy high VST-Vector, Buy-rated stocks in rising markets.
Stop (Stop-Price): Stop is an indicator of when to sell a long position or cover a short position. AYSI has a Stop of $2.64 per share. This is $0.06 below AYSI's current closing Price. A stock's Stop is computed from a 13 week moving average of its closing prices, and is fine-tuned according to the stock's fundamentals. High RV, high RS stocks have lower Stops, and low RV, low RS stocks have higher Stops. In the VectorVest system, a stock gets a 'B' or 'H' recommendation if its Price is above its Stop and an 'S' recommendation if its Price is below its Stop.
Could be. Like I said, I know nothing about this stock. You're welcome to respond to that commenter if you like.
No problem, Mikey. We'll see what happens.
A commenter makes a short case for JBII here: http://shortscreen.com/message-board/78-just-a-quick-thought-for-short-jbi-inc-jbii
I know nothing about JBII and have no position in it, but I thought I'd pass this along. GLTA.
I think the best thing we can do now (those of us who have corresponded with the company in the past) is give them some space. Let them resolve their FINRA issue, get the new board member up to speed, get the third mill up and running, etc. Once the dust settles, they'll probably be in a better position to think about shareholder communications.
Incidentally, a couple weeks ago I requested VectorVest add AYSI to its system. I got an e-mail from them today, saying it should be added by the end of the week. If it ends up getting a buy rating by their system, that may introduce the company to a new shareholder or two.
My guess is we'll see another record Q, even with the start-up costs of mill #3. But we'll see.
I'd rather see the stock drift down now, so I can pick up more shares in the low-mid $2s in advance of earnings. I think any sequential growth in earnings will put this back over $3 easily. And if we string together another couple of Qs as good or better, this cat will be out of the bag, as TTM numbers will put it on lots of fundamental screens.
A commenter makes the short case for CTRP: http://shortscreen.com/message-board/73-i-m-shorting-china-home-inns-hotel-hmin
OK.
I pasted your response in the comments on my blog: http://steamcatapult.com/2010/04/15/a-couple-of-updates/#disqus_thread
The Street Sweeper article a hatchet job?
They quoted NNLX's CEO, gave him credit for distancing himself and the company from the pumpers, etc. It actually seemed fairly balanced to me.
The best way to crush the shorts would be for NNLX to file an 8-k announcing a huge sales order. And then to file a 10-k showing some revenues and assets.
The point of buying it, in that context, wouldn't be to diversify (or diworsify, if you prefer), but to deny competitors a unique technology. That was why Starbucks bought Clover: just to keep other chains from having it.
Maybe they think differently in commodity industries like mining though, and are content to allow competitors the same technological edge they have.
See also the detail about "landed" pricing, which gives BHP's Australian iron ore a big advantage over Vale's Brazilian ore. Might be an incentive for Vale to increase its efficiency / lower its costs more to compete.
The other possibility is this: with all this cash coming in, if Alloy Steel's wear plates are as good as we think they are, if you're a BHP, why not just buy the company, so no one else can use the wear plates (sort of like how Starbucks bought the company that makes the Clover machine)?
Can't complain, Barry.
Thanks again for the heads up about that. Ready to write the guest post?
The only potential downside of the iron ore news is that the miners are set to make so much money this year that maybe they won't be as concerned about the efficiency gains provided by Alloy Steel's wear plate. Let's hope not.
I'm not sure AYSI's share price is being affected by that news though. My first thought was that it's just the general market frothiness -- another nano cap I own (one suggested to me by a fellow AYSI shareholder) is up almost 100% in the last month and a half, on no news. But that one has a lot more volume than AYSI. My guess would be that it's just some regulars or former owners of AYSI who are nibbling today.
No one here reads the FT?
I blogged about this a couple of days ago: http://www.ft.com/cms/s/0/d15d7758-3bad-11df-a4c0-00144feabdc0.html#