FREETRADE sounds impressive, but how do they make any money with those rock bottom commission rates ? I'm always a bit suspicious of freebies. Is there any other broker with comparible rates ? What do you do if you're travelling and need to make a trade by phone ? Why can't I have margin accounts at both Freetrade and Ameritrade ? Is order routing and execution as quick and efficient at Freetrade as Ameritrade ? I once had an account at BROWN for a trial ... but I closed it after just 2 weeks. Why ? Order routing was selective and therefore unacceptable. Bid/ask spreads were often significantly wider on Nasdaq quotes at BROWN compared with Ameritrade or Waterhouse. I could save $5 on commission, and lose $100 by paying $11.34 per share rather than $11.24 on a 1000 share order. Quick execution and best market price are of primary importance to me ... a few bucks on commissions takes the back seat. If Freetrade really gets you the equivilant speed of execution and best market price, then it's a great deal for those who don't need extra services. Are you getting timestamps to the second for your executions ? It may not matter if they're limit orders, but sometimes on a thin spread market orders are important and useful. Always beware of 'freebies' ... sometimes they aren't ! BROWN sure wasn't.

It seems to me that the medium term 15 day weather forecast has been more influential. Recently oil prices declined because of a warm snap in much of the US. Then in the last few days, warnings of the impending cold wave caused prices to rise sharply. Perhaps in 2 more weeks the cold wave will come to an end and oil prices will again retreat. It seems to be a condition of extreme myopia. After all, winter officially arrived over 3 weeks ago, and the long term 90 day winter forecast has been out for several weeks already.

ifathom, I hope you're right. Friday has given me some confidence and we're due for some follow-through.

Good to see a rally in the market today. Typically the Friday before a long weekend is weak, so today's strength may be even more significant. Hopefully it marks the beginning of a short term trend reversal, with a lot of new January cash to be put to use by money managers starting on Tuesday !

Bobwins, long range weather forecasts, such as 90 day forecasts, are very general by nature, and typically accurate only about 55% of the time according to what I've read. Part of that accuracy stems from the accuracy in predicting the first 10 days of the period. The science of long range weather forecasting has a long way to go, and maybe the long term weather really does have a significant random component that truely puts forecasting it out of reach. But keeping your eye on the 2 week forecast can potentially be beneficial in beating the 'street' to the sudden ups and downs of oil and gas prices, imho. The coming cold snap had been in the 2 week forecast before oil prices made their latest move up.

shmolton: MFLX

I was fortunate enough to buy MFLX in 7's when it mysteriously spiked down last August not long after their IPO. I sold my shares in the 14's just 3 months later. Subsequently it moved into the low 20's before falling back. I'd consider getting back in if it dips a bit further. A solid balance sheet and a PE of 12 based on analyst 2005 estimates. But heavily dependent on Motorola for 80% of their business. I don't think 2005 growth will be anything like 2004, but with the low PE it may not matter. EMS stocks like FLEX, JBL, SANM and SLR command higher PE's with less growth. SGMA is another interesting smallcap in the sector, with a rock solid balance sheet and production in their new China factory starting a steady rampup.

Rainman, interesting post. I never would have guessed that Gabon has 7x the per capita GDP as Yemen. Go EGY !

NICH: That's the problem with clothing. It's a fickle, competitive business. Lots of ups and downs for companies like NICH. It looks like the stock will be heading south on Monday.

wade: SWTX is definitely a good value even with limited growth. I took some profits this morning but will buy back shares if there is further weakness. However the stock has rebounded nicely from the morning low of 1.30 and is now bid 1.41 on heavy volume. But at the very least, one can say that their presentation material lacks clarity, which is quite unfortunate because it leaves a lot of important figures up for various interpretations. And it also reflects poorly on management that they are not responding promptly to the resulting shareholder inquiries.

Bobwins, congratulations on TGA ! Judging by the volume it may be that institutions are accumulating more shares. Institutional ownership jumped sequentially from near 0 to 1M shares in the September quarter, and will likely continue its rise. Plus, in your case, the added benefit of the long term capital gains rate, the equivilant of roughly a 35% further gain versus being taxed at the normal rate ... if you ever decide to sell any shares !

abh3vt, ANII

Thanks for that excellent post. I'll be accumulating more shares on dips. Also, it should be footnoted, that ANII still has about $8M in operating loss carryforwards, so no taxes for at least 2 more years.

wade, that's an interesting article about copper prices, and with all those month-long smelter shutdowns scheduled in the 1st half, prices could go even higher. But the article does close with the remark .... 'Copper prices may fall in the second half of the year as supply catches up with demand'. That agrees with what a giant Australian copper company is forecasting.

wade: copper prices

I read that copper prices should remain firm in the first half of 2005, but that a lot of new supply will be coming online in the 2nd half, resulting in falling copper prices. Evidently there are plenty of old mothballed mines around the world, just like TGB's, that are being brought back into production. Just like steel prices, I think copper prices will eventually come back down. But for the short term, prices should remain firm, imho.

ANTP back in the 20's after the low 50's just 8 days ago. I knew reality would catchup with this momo flyer, but unfortunately no shares were available for shorting at the top. I finally got 100 shares to short in the 30's. If this weak market continues, plenty of other high flyers will be coming back to earth.

STV is the #1 percentage gainer on the AMEX. +.80 to 6.00 Today's announcement of new contracts, record backlog and optimistic comments from management are getting noticed.

shmolton: SWTX

I didn't see the presentation, but it definitely sounds like they're trying to lower expectations for both the top and bottom line. I took some profits today, but am still holding most of my shares. The weakness in the stock is no surprise. I think a lot of investors were hoping for a much more optimistic presentation from the Company.

STV further increases record backlog

In 2005, if margins remain reasonable, they should easily beat the previous annual record for EPS of .84 from 2003. Not bad for a stock trading at $5.40 on the AMEX. Management sounds very confident about the coming year and beyond. I picked up a few more shares this morning ...

HOUSTON--(BUSINESS WIRE)--Jan. 14, 2005--Sterling Construction Company, Inc. (AMEX: STV - News), ("Sterling" or the "Company"), today announced that it was the low bidder on two contracts with a combined value of approximately $17.7 million.
Both the two new contracts entail storm and sanitary systems work along with paving, and they will be undertaken in San Antonio's Bexar County and Houston's Brazoria County. Both projects are expected to commence in June '05 with completion earmarked for 18 months later.

Pat Manning, Sterling's Chairman, noted, "Although the year-end numbers are not yet finalized, it is clear that we ended 2004 with the largest backlog in our history. This favorable business trend is continuing into 2005 with the award of these two additional contracts. Furthermore, the pace of contracts being put out to bid in our key markets is on the rise which along with the multi-year nature of the contract awards represented in our backlog, gives us reason for confidence in a strong financial performance in 2005 and very likely, beyond."

abh3vt: ANII

Thanks for the details on the Q3 margins. If they can grow revenues 15-20% next year as you suggest, that would be quite impressive and should grow the bottom line even more. It was also good to hear that management is interested in moving to the AMEX or Nasdaq.

ANII 10K just filed - looks solid at first glance. Operating income of about 2.9M versus 1.9M in prior year (excludes discontinued ops, and tax benefit). Revenue up 38% y/y. Q4 rougly inline with Q3. EPS of about .51 excluding disc op and tax benefit. Trading at $4. Looks like a good buy if they can keep the growth going ....

RRainman9999, can you be a bit more articulate regarding your concerns about 'huge' debt ? IPII has no long term debt whatsoever. Accounts payable is a routine current liability for a building supplier, offset by large inventory assets. Tangible book value is about $0.60. ERS likewise has no long term debt, just current accounts payable offset by inventory and accounts receivable. TBV is roughly $1.80. There's no debt related risk in either of these two stocks. If you want to see huge debt, I would refer you to AHOM.

Wade: I own IPII and ERS which are my favorites from your list. Both have single digit PE’s on fully taxed and diluted earnings. And both have shown solid growth last year and have good prospects for further growth going forward. IPII is the more speculative, but also has significantly more upside potential especially considering the likely move to the NasdaqSC.

IPII - 1.55 Imperial Industries is a building materials supplier doing business primarily in Florida and neighboring southeastern states. The Company recently received shareholder approval for a reverse split to allow an application for Nasdaq listing. Fully diluted and taxed EPS was .21 through 9 months, and .07 in Q3. Third quarter results include a one time gain, and loss of business due to the hurricanes, that roughly cancel each other out. Revenues were up 33% from a year ago for the 9 month period. Q4 should be strong due to the company’s roofing supplies segment and the rebuilding effort in Florida. Nasdaq listing is likely to occur in Q1, and the stock should then command a PE of 10.

ERS - 4.12 Empire Resources is a distributor of a wide range of aluminum products. Earnings and revenues have grown steadily over the last 4 years, with EPS of .12 in 2001, .24 in 2002, .37 in 2003 and on track for .48 in 2004. 2005 EPS should be approximately .60. Dividend yield is over 5%, including the special year end dividend. Nothing exciting here, but this AMEX listed microcap should provide solid returns in 2005.

ACRG just posted another solid quarter and it on my watchlist. I hope to pick up some shares on a pullback ahead of their seasonally weak February quarter. Trailing PE is now around 10, so higher than IPII and ERS. You may want to reread Bobwins’ excellent post on ACRG of a few days ago.

TGCI has a 3rd seismic crew at work resulting in a strong 3rd quarter. But results may flatten if they don’t keep adding more crews. Also EPS are untaxed, though they have plentiful op. loss carryforwards. A bit pricey for me at this level.

PIHC looks appealing and hweb has been recommending it. I may pick up some shares on further weakness. Looks like a good long term investment.

BSIC showing strong growth with low PE, but I don’t know much about this one … do they have significant o&g reserves ? I’ve put it on my watchlist.

Wade: PDGE

I think the mold removal business comes in smaller orders, hence no announcements of those. But it's still good to see their asbestos removal business gaining more business. And more business enhances their reputation and begets yet more business ...

PDGE: It's impressive that backlog remains near record levels even now, 5 months after the hurricanes. It bodes well for continued strong earnings. Still looks cheap at $1.50, considering EPS of $0.09 last quarter and the continued record backlog.

NWAU hits .65 this morning after 1.25 yesterday. Wow, if it goes any lower, I may start buying back some shares. It's certainly a sobering correction for a Company that has yet to report its finances.

NWAU: Today looked a bit like a short term top for the stock. Only time will tell, but the pullback from the high of 1.25 to a close of 1.00 on heavy volume seems significant. We'll see what tomorrow brings.

lentinman, I agree with you about selling TONS after the huge runnup. It now trades at a big premium to its peers. I still like the idea of going short TONS and long ZEUS. The gap will close between those 2 regardless of what the entire sector does, imho. But still no shares of TONS available for shorting today ... and no options on that stock either. But I finally did get to short 100 ANTP today, though at much lower prices than when I tried the past few days. But I think it's heading still lower.

roguedolphin, most memorable for me is when CALM tried to go private back in August '03 just as egg prices were starting to soar. Luckily shareholders protested strongly, and finally management cancelled its plans. The stock rose 700% in the following 6 months as egg prices went through the roof. Even today, with egg prices back in the dumps, and CALM reporting 2 sequential losing quarters, the stock is remains up about 300% from the time of their going private announcement. Stockholders, and probably even the insiders, would have been robbed if they had been successful. At the time their stock was very thinly traded, and grossly undervalued. The stock has since split 2 for 1 and trades about 30x the daily volume it did in August '03. Insiders have been able to sell all the shares they ever wanted on the open market due to the strong following the stock now has. Of course with the Company now losing money, the stock appears very overvalued, and is a favorite for the shorts. I think TREK management is making a big mistake, but so be it.

JACKSON, MISS (August 18, 2003) -- Cal-Maine Foods, Inc. (NASDAQ/NM:CALM) announced that the Company's Board of Directors approved a 1 for 2,500 reverse split of the Company's common shares in order to effect taking the Company private. If Cal-Maine's shareholders approve the proposed reverse split, each shareholder owning less than 2,500 shares of existing common stock will receive cash in the amount of $7.35 for each share of existing common stock. The transaction has been unanimously approved by Cal-Maine's Board of Directors at a special meeting held Saturday, August 16, 2003, following the unanimous recommendation of a Special Committee of independent directors. The transaction was recommended by the Special Committee following negotiations between management and the Special Committee regarding the terms and conditions of the transaction. Houlihan Lokey Howard & Zukin Financial Advisors, Inc. served as financial advisor to the Special Committee and provided its verbal opinion to the Special Committee that as of August 16, 2003, the consideration to be received by public shareholders of the Company, other than affiliated shareholders and the Company's Employee Stock Ownership Plan, is fair from a financial point of view.

The $7.35 per share cash consideration represents a 33% premium over the $5.52 closing price for the Company's common stock on July 11, 2003, the last day of trading prior to the Company's announcement that it had established a Special Committee of its Board of Directors to explore a "going private" transaction.

larrybaz: those are some very good points. WNMLA is another stock taken off the OTCBB and moved to the pink sheets in the last few months. And HICKA is planning a move to the pink sheets pending a reduction to 300 shareholders. But particulary in the case of TREK, which has been making new highs on record volume recently, it seems that shareholders are getting robbed. Management wants to 'milk' the Company themselves rather than sharing the 'cash cow'. Given the timing of their manuever, it appears shareholders might even have the basis for a lawsuit, though I doubt it will happen.

Excellent post Bobwins. I appreciate that perspective, though I think the stock is due for some kind of pullback regardless of the underlying fundamentals. Up several 100% in the last few weeks.

My limit order to sell 2k TREK at 2.05 just got filled. Volume is now over 250k, a record already. I'm surprised the stock is holding up as well as it is. My guess is that it's speculation of an eventual buyout bid by management. They can probably sell the company at a big profit, given the $6 present value of the reserves. Unfortunately shareholders really got robbed of the chance of getting fair value.

TASR getting whacked again today. Eventually these fliers do have to come back to earth. The stock has dropped over 50% in the last 6 trading sessions.

I just sold a few of my last shares of NWAU at 1.20. Incredible ! But at this rate I may regret it ... the stock may break 2 by later this week. I've gotta believe it's some kind of frenzied trading momentum, rather than anything fundamental. We have yet to see the SEC filings. I still hold 2500 shares in case it really does keep going higher !

NWAU may exceed TREK in price per share by later today. NWAU hit 1.23, and TREK was as low as 1.51 !!! Who could have believed it ????

TREK: I'm holding most of my shares but sold a few at 1.75. Anybody know of the history of other cases like this one ? Will management ultimately buyout the shareholders to go completely private ? Is management looking to buy shares on the open market at rock bottom prices ? What's their motive ?

Bobwins: RSGC

Thanks for your thoughts on RSGC. I'm going to hold my shares as well and still have a nice gain. EPS of .05 last quarter is impressive for a stock trading at .72. They seem to have a good 'niche' product lineup in the insurance business .... much more profitable than standard lines of insurance.

MikeS97797: HICKA

Has HICKA changed its plan to deregister from SEC filings ? Here is their PR from August. The odd lot buyback offer has since been extended ....

CLEVELAND, Aug 11, 2004 /PRNewswire-FirstCall via COMTEX/ -- Hickok Incorporated (OTC Bulletin Board: HICKA.OB), today announced that it is commencing a tender offer for the purchase of all Class A common shares held by shareholders of the Company owning 99 or less Class A common shares, as of the close of business on August 2, 2004, at a purchase price of $10.00 per share. This price per share represents a 47% premium over the $6.79 average bid price of our Class A common shares on the Over-the-Counter Bulletin Board for the 30 trading days prior to July 26, 2004. Beginning today, documents containing details of the offer are being mailed to all shareholders.

Hickok currently has approximately 420 shareholders of record. If after completion of the offer the Company has fewer than 300 holders of record, the Company intends to terminate the registration of its Class A common shares under the Securities Exchange Act of 1934 and become a private, non-reporting company. The offer will expire September 30, 2004 at 5:00 p.m., New York time, unless extended. Eligible shareholders who would like to accept the offer must tender all the shares that they own.

MikeS97707, HICKA.ob is a recent case of a company seeking to become a non-reporting and delist from the OTCBB by reducing the number of shareholders to under 300. However the stock is actually higher now than it was in August when they announced their plan to deregister with the SEC and go private. But it would seem that shareholder prospects for fair value are diminished in a move to the pink sheets. There are a few other such cases that I've come across, but I can't remember the stock symbols.

If TREK is delisted from the OTCBB, which seems inevitable, then it will definitely trade on the pink sheets, imo. Management indicated that the reverse split and delisting was part of a 'going private' transaction. Whether they intend that to mean just becoming a non-reporting company, or whether it implies that shareholders will eventually receive a management buyout offer remains to be seen. Given that they are making this move just as the shares are seeing all-time highs on record volume (albeit still light volume) is mysterious. I can only suspect selfish motives. Perhaps they will ultimately try to buyout shareholders at a small premium to the market price, and then sell the company at a big profit, given the $6 per share present value of their reserves plus the $1 per share tangible book value. I was hoping for a takeover, but not like this !

Bobwins: RSGC has been drifting lower since they announced the merger with Strategy International, valued at $1.75 per share, on 12/17, now trading at a mere .72 after having rallied up to 1.05 on volume of 6 million shares the day of the announcement. Are you suspicious of the merger plan, or will it indeed be consumated around 3/1 as stated in the press release ? And if it falls through, do you think the Company can keep reporting EPS of .05 as they did in the latest quarter ? Below is an excerpt from the PR.


It is anticipated that Strategy International will offer cash and stock, which would result in a value to RS Group common stock holders of $1.75 per common share, to acquire RS Group's outstanding common stock (approximately 65 million shares), representing a 237 percent premium over the closing price of $0.52 on December 15, 2004. Strategy International, with input from RS Group, is in the process of determining the most effective method of achieving this acquisition. The transaction will not be conditioned upon Strategy International obtaining any financing.

"This acquisition provides Strategy with marketing and management resources that further enhance the Company's expansion. RS Group's proven product expertise and administrative capabilities will be an exceptional addition to the Strategy underwriting group," said Stephen Stonhill, President and CEO of Strategy International Insurance Group, Inc.

Strategy International expects the transaction to close on or about March 1, 2005, subject to the necessary shareholder and regulatory approvals. Strategy International estimates that the proposed transaction will be neutral to its 2004 earnings.

Niles: It certainly seems management is acting in their own self interest, and not that of the shareholders as they state in the PR. It's very disappointing news, just as the stock is making new highs and as the value of their reserves has soared with the price of oil. But it's another risk inherent to investing in the microcaps.