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As is well known, the E-Man's ponies usually finish strong and have been known to keep running even after the race is over. And, there have been roumours of something special in the ponies' feedbags -- photos of ponies taken after the season indicate the horses appear much larger and more muscled that they were at the start of the season. Good luck to all. Tim
Erehwon Man
He's a real Erehwon Man,
Sitting in his Erehwon Land,
Making all his Erehwon plans
for nobody.
Doesn't have a point of view,
Knows not where he's going to,
Isn't he a bit like you and me?
Erehwon Man, please listen,
You don't know what you're missing,
Erehwon Man, the world is at your command.
He's as blind as he can be,
Just sees what he wants to see,
Erehwon Man can you see me at all?
Doesn't have a point of view,
Knows not where he's going to,
Isn't he a bit like you and me?
Erehwon Man, don't worry,
Take your time, don't hurry,
Leave it all 'till somebody else
lends you a hand.
He's a real Erehwon Man,
Sitting in his Erehwon Land,
Making all his Erehwon plans
for nobody.
Added some KSW based on fact that at 6.40 stock is selling at about 4.3 times trailing free cash. Can't believe there is much downside here. Tim
Thanks, nsom, it was all BUKS. Unfortunately, I sold BUKS in my real portfolio two days before the rise. I'm doing OK on stock selection but my trading timing SUCKS! Tim
OT: Wade, farm equipment should be strong here. corn prices are way up from last year so farmers should have considerable cash to spend this spring and summer. There are quite a few shiny new green tractors and harvest equipment around here. Tim
CSTL WHYME, still pumping CSTL, I see. I do hope new name is an indicator of what's ahead.
PRGF They have been posting CC transcripts on their web site - q2 call will probably be up in a few days. I think I overstated free cash because they capitalize software costs -- will recheck the figures. Tim
PRGF fish, I've had this one for a while, can't give a fundamental talk about their products but two things are keeping me in:
1. free cash for the last 4 q"s is about .21/share and
2. they have said that q2 revs will be way up
I think there is significant upside if earnings are good when they come out soon. IMO the main problem is that it just doesn't trade very much. Tim
BTYH Wish my order had filled at .47 -- stock is up 35%. The jump may indicate that the spinoff is going to go through. Tim
KSW I rebought today thinking that a director resigning is most likely a random event although the PR was not written very well. At 6.80 KSW is priced at about 5 times free cash flow of the last 4 quarters -- should be a good safety net. Tim
Also sold FZN when the CFO resigned -- that's scary. Also bought LNDC. They make smart polymers that change properties at different temperatures. You can coat corn seeds, plant them early, and set the coating to become permeable at the right germanation temperature. They just sold this division to Monsanto for $50 million cash plus lic agreement. They have another bus that could also be sold + some promising lic deals in progress. Tim
PRGF.OB BUKS.OB WPCS GACF.OB AVSO.OB CYIO.OB SYTE.OB USOO.OB SOTK.OB VCST.OB TWRT.OB KSW (1/5) LNDC (1/5)
OT Wade, maybe you could hang out with Cramer and share your misery Happy and profitable new year all. Tim
Watch List: GV Any opinions? On 12/14 Pres of electrical Const. unit bought 30K shares at 1.14-1.16. Nice day yesterday and the chart looks good. How's FL RE looking these days? Don't own now. Tim
Own:PRGF.OB BUKS.OB FZN WPCS GACF.OB AVSO.OB CYIO.OB SYTE.OB USOO.OB SOTK.OB VCST.OB TWRT.OB
GXYF HWEB Used to be on my watch list but dropped last April when they went to the Pinks. Took another look and here is my opinion. As I remember a couple of years ago they got caught in a classic cost squeeze: Raw materials were shooting up and margins were being trimmed at the retail level plus there is the ever-growing cost of advertising/marketing in a constantly more crowded field. Their products are mainly dairy-free and appeal to a niche market. My remembrance of CC's was things kept getting worse and investors more irritated. Finally they sold the mfg plant to Schrieber Foods (a real low-cost processed cheese producer who accounts for maybe 2/3 of all the slices in hamburgers at the big fast food stoers. I think a good move since there was really no way to compete. (See similar horrors at CHLE, PSTA, etc). Management was a pretty slippery bunch and was in trouble with the SEC, I think over treatment of stock options.
It looks like they are back with the same management team and some of the problems solved. I read through the latest transcript and the only strategy they can articulate is further cost cutting. They still have the major problem of sell-through. They have weak brands so they don't get treated well by retailers so they really have to spend on advertising. Without the burden of a mfg plant the can scale up and down a bit easier so cutting low margin brands is ok. Add to all this, IMO, as an organic veg grower, their products are crap. People would do much better just load up on fresh vegs, fruit and meat.
I think your scenario sounds pretty good although I think sales will probably continue to fall a bit as they cut some lower margin brands so comparisons on sales will be tough but margins should go up a bit more. In short, being a small food company is about the toughest job around (except maybe a small farmer,LOL). That said, I think you might make some money here. Probably more than you wanted to hear... Tim
TWRT New position today
These guys make the big towers for wind turbins and from what I've read all the manufacturers are scrambling to keep up with demand. TWRT is completing its first order for 30+ towers which they built for the labor cost alone, about $100k per tower. They are negotiating for the next two years' worth of production but now they will be sourcing all the materials and sell teh towers for about $300K each. They are on Lake MI so they can get their steel by water and they claim they can be the low-cost producer. They say they have been working to increase capacity from 2 to three towers per week and are ahead of schedule and should be at that rate by end of q1'07.
They have announced that revs for q4 are 3MM+ and I believe this is based of a labor-only deal. Now if they can sell next year's production and produce at their plan, I think they can do about $6MM in Q1 and $10 in q2. I don't have much of a sense of profits at these rates of production. I think they are in a great growing market and should be a winner next year. Tim
VCST A new position today.
VCST They make a box that converts signals from remote cameras like traffic cams to input for a web site -- I think we are going to see a lot more of this inthe future. You can look at CALTRANS in Calif. to see a bunch of examples. This is from the 11/14 PR: "During the third quarter, the first orders for Niagara GoStream came pouring in. Niagara GoStream is a distinctive product because the user has single-button control in the creation and presentation of video and audio on the Internet. No other product in the market is comparable. Due to the popularity of GoStream, product orders and shipments are increasing rapidly," said Dave Stoner, president of ViewCast Corporation. "If anyone has looked at some form of streaming video on the Internet, it is quite likely that ViewCast equipment was used to encode the image." So I think they have a big piece of the market.
Since then a big investor has converted about 9mm of debt to euity and they have announced another new product. Sales are less than last year because they sold off one of their divisions. I'm guessing they will turn profitable in the next quarter or two. Free cash was positive last q and one director made a buy at .52 on 12/13. I'm looking for a double or better in '07 but there might be a buying opportunity in early Jan with people taking profits. Wish I'd gotten in a couple of months ago. Tim
Portfolio:
PRGF.OB ANDR.OB BUKS.OB FZN WPCS GACF.OB AVSO.OB CPNE.OB CYIO.OB RMKR SYTE.OB USOO.OB SOTK.OB VCST.OB(12/26) TWRT.OB (12/26)
PRGF Gilead, sorry to keep pounding the table on this one but I think there's a strong case for buying this stock. Over the last 4 quarters they have earned about .01/sh but their free cash has been .21/sh. I don't know if they can continue that pace but their balance sheet is stronger, net tangible assets turned positive last q, and they have a pretty good cash position of .16/sh. I really think the downside is pretty limited and there is a lot of upside if they can put together a really big quarter. Tim
P:PRGF.OB ANDR.OB BUKS.OB FZN WPCS GACF.OB AVSO.OB CPNE.OB CYIO.OB RMKR SYTE.OB USOO.OB SOTK.OB
SOTK I'm hoping that the selling in the last few days is for tax purposes and not that insiders know the co. is falling apart. Bought some today and am hoping for a MFIC - like rally after the first of the year. Any opinions on this strategy? Tim
ZNCM / UPG Still scratching my head as to how they were able to pull this deal off and double the market value of the whole package. I suspect ZNCM will drop pretty rapidly because in my experience illiquid stock investments tend to be heavily discounted by the market. Also, I think that UPG is going to sag based on the unexpected little operational problems that tend to pop up from time to time.
Bad Toys ( BTYH )has been trying to pull off a similar deal for the last couple of years although I believe that the spin-off is not going to be an IPO but new shares distributed to shareholders. BTYH is down to .47 from about 2.50 about a year ago when the deal was expected to go through. In the last 4 q's EPS was .16 and free cash was .34 so it goes, I think it'll be a money maker. I have an order in to buy a little at .47. Tim
PIHC Nice little Christmas present for Camden partners who bought 2MM shares at 2.08 the day before the big new contract was announced (stock was 2.38 and 3.00 two days later). I'd probably wind up in the clink if I bought the day before a major announcement. Tim
Portfolio: PRGF.OB ANDR.OB BUKS.OB FZN WPCS GACF.OB AVSO.OB CPNE.OB CYIO.OB RMKR SYTE.OB USOO.OB SOTK.OB(12/22)
ZNCM thanks Mike. My understanding now is that ZNCM continues to trade and owns stock in UPG and continues to hold Alphanet. I think UPG would probably be a good short at this point. Tim
ZNCM Peeker, do you know what the terms of the deal are for current ZNCM shareholders. I just can't believe you can take a $2 stock and turn it into a $7 stock, just like that. Tim
I just read through the PR and frankly don't know what to make of it. The bottom line seems to be that, and this is pretty much a guess, 1. the declining stock price is making it impossible to close all these acquisitions becasue they were negotiated with a higher price. 2> business is a lot crappier than they expected. I have a hunch that the stock is going to take a dive tomorrow and that will put them in a worse position. Anyone have other thoughts? Tim
AVSO Cuca, I own this and agree the long term is pretty bright. I'd add a couple of comments to what you wrote: Diluted shares are 21MM so IMO PE > 10, the growth you mention is the result of an acquisition and in fact, they said sales have slowed a bit. The rise in book value is simply the goodwill for the recent acquiaiton. That said, they should benefit from a larger footprint and are in the process of moving from regional bus to national which should help them get bigger contracts. With their products and engineering they can really help companies. Hope you are right about the coming price rise. Tim
USOO SSK, Thanks for remind about this one. Has been on my watch list for a while with a note to buy but held off becasue of the weak cash flow -- most seems to be sucked up by AR to finance growth. I think it's near the low part of a two-yr rising channel so I think there's not much downside. Not much of a clue about what's going on or plans for the future in 10Q or PR's so any change to be more forthcoming about plans/guide would be a positive. OK, talked myself into buying a bit. Tim
(did my best to get it over 1.45 hurdle )
Portfolio
PRGF.OB ANDR.OB CHYS.OB BUKS.OB FZN WPCS GACF.OB AVSO.OB CPNE.OB CYIO.OB RMKR SYTE.OB USOO.OB(12/19)
sold KSW on 12/18 -- thought it might have a little trouble getting through 7.00 and may get some selling in early Jan.
JMIH q1 in with about breakeven. Say their bl is down to one mo and industry is soft. GM way down due to several factors, free cash (.02)/sh. No trades yet today. .172/.19 Don't own. Tim
PRGF Picked up a little more this morning after seeing some follow-on buying from the jump on Friday. Management warned on Friday that sales for the first six weeks of the quarter were already a record and said "Proginet's momentum continues to be strong, with unprecedented demand for CFI borne out by the size and nature of the deals closed in the quarter to date," . Free cash flow for the last four quarters was .21 so I expect we could go a lot higher here. Tim
Only be 2.8 - peat without e-tim. tim (sob...)
nsom, what a hoot! Thanks to you, Len, Skills and the rest for providing a lighter side to what is normally pretty serious business. Whatever team I end up on, I'll continue to enjoy the contests. Now, if I could only entice my real portfolio to perform as well as my PSL portfolios...Tim
Watchlist Review: SOTK
Price hit a 2yr low today, closed at 1.14. Has been profitable for the last 12 quarters or more. Last Q earnings PR seemed to indicate they are forgoing some near-term profits by spending on new product development which seems to me to be a good thing. They have recently opened an office in China. Don't own right now but think it's a good time to buy when nobody wants it. also, it's just below support which isn't a bad thing either. Tim
PRGF after the bell they issued a PR saying that sales to date in q2 (ends 1/31)have already beaten their previous record quarter. Had been thinking of selling as it looked like it was ging to drop through support. Hope to see it fly tomorrow. Tim
P:PRGF.OB ANDR.OB CHYS.OB BUKS.OB FZN WPCS GACF.OB AVSO.OB CPNE.OB CYIO.OB KSW RMKR SYTE.OB
BUKS in with .01 for the q. Had a nice rise in sales over the previous qtrs but expenses were up also. Sales own from last year because of a large construction contract included last year. No PR yet. Last CC was pretty bullish and talked about some potential big deals -- maybe they will announce one soon. Hanging on until the PR and CC. Tim
WMCO Gilead, maybe not so bad as you think. They had a 5-1 reverse split early in the year. Tim
The daily hyperbole: CPNE / SYTE
CPNE: I just love it when the executives of one of my companies say things like, "In recent weeks Commerce Planet has experienced staggering order growth..." (visualize if you can the execs carrying huge sacks of cash down the street to the bank!"
SYTE "Our team is putting on the full court press to grow Sitestar and increase shareholder value...a lot of people can and are making money with our stock." (These guys/gals are players and the investors are carrying the huge sacks!)
I think the quality of my portfolio is starting to sag... Tim
P:PRGF.OB ANDR.OB CHYS.OB BUKS.OB FZN WPCS GACF.OB AVSO.OB CPNE.OB CYIO.OB KSW RMKR SYTE.OB
Watch List: GSCP They had record sales in Q3 and with their new acquisition should have more sales growth in Q4 although EPS may lag a bit. In Nov. had some pretty bad financing (sold 1 share and 1 wt for $2.50 when the stock was around $3.00 and top guys unloaded a bundle) but the stock has come down below that price now. If it falls much lower, might find a good entry point around $2.25 if you believe in their business prospects. I don't own it but am considering. Tim
Portfolio: PRGF.OB ANDR.OB CHYS.OB BUKS.OB FZN WPCS GACF.OB HSOA AVSO.OB CPNE.OB CYIO.OB KSW RMKR (bot 12/7) SYTE.OB (12/7)
IEAM I owned and luckily sold after hearing some bizarre news about a 142MM share lawsuit. I listened to the last couple of conference calls after the recent drop and came away with mixed feelings. On the one hand I've never seen a managmenet team so uncomfortable talking about their company -- totally unfocussed IMO. On the other side I think the CEO may be one of these loner-type turnaround guys who have no qualms about slashing and burning to get the business turned around. Sounds like he pretty much fired everybody and shut the place down for a couple of weeks to reengineer it.
I bought origininally after looking at the strategy of buying the Pitt Penn co, cleaning it up, selling off some pieces and using the rest to expand geographically. I'm guessing that things will turn out ok but the CEO is pretty unconvential. I believe he said on the CC that he is taking no salary and is participating via equity. Don't own now but may buy. Tim
SYTE another tadpole couldn't resist popping in. By my calculations they earned about .03 in free cash in the last 4 quarters. I don't think there is much downside here. Tim
CPNE -- The stock everyone (except MSGI) loves to hate.(sold in early Oct and rebought on last pullback) I agree that the co. doesn't really have a whole lot of substance and there is all kinds of hype. But, their products are in demand and they keep posting incredible numbers. I'm hanging on for the time being. Tim
Portfolio:PRGF.OB ANDR.OB GLDS.OB CHYS.OB BUKS.OB FZN WPCS GACF.OB HSOA AVSO.OB CPNE.OB CYIO.OB KSW
KSW Rebought this morning on the pullback. Over the last four quarters by my calculations they have generated over $1.30/sh in free cash. B/L is increasing. I don't see a lot of downside risk here. Tim
HSOA Here is CEOCAST weekly pump on Home Solutions. According to their disclaimer they own a bunch "... Home Solutions, editors of CEOcast own approximately one million two hundred thousand shares of the company's stock,...". I'm holding into earnings -- hope I don't ruin it for everyone. Tim
Earnings Preview: Home Solutions of America, Inc. (NASDAQ: HSOA), a provider of recovery, restoration and rebuilding/remodeling services, will report third quarter results for the period ended September 30, 2006 on Tuesday morning. Since the company announced second quarter results in mid-August, shares are up 2.2%. This quarter’s results are pivotal for the company, as HSOA is expected to report revenue of $50 million and EPS of 20 cents, a significant sequential increase when compared to Q2 revenue/EPS of $24.2 million/$0.11 per share. Last year, the company posted third quarter revenue of $20.4 million and net income of $0.08. The 2006 third quarter report will give investors a better understanding of the impact that the acquisition of Fireline Restoration will have on the company’s results. HSOA acquired the company in early August. Fireline is expected to provide HSOA with the skilled labor to pursue larger rebuilding projects in New Orleans and surrounding areas. Skilled labor continues to be in short supply in the Gulf region, generating strong margins for companies that have large pools of skilled employees. HSOA could benefit from this trend through improved margins. The recently announced acquisition of Associated Contractors, which has extensive relationships in the region, could drive business to HSOA. Ultimately, though, the stock is likely to react to investors’ perceptions about how quickly the company is growing on an organic basis, and views of whether the rebuilding of New Orleans is likely to occur over the next 2-3 years. Shares ended the week at $5.84, up 13 cents.
DYNT I'm thinking that $1.40 might be an attractive exit price for DYNT before earnings. From last PR: "Delays in meeting the projected timelines for two of our new product introductions contributed to diminished sales results for the year. These factors, combined with decreased sales of high-margin Synergie aesthetic devices and legacy “50 Series” products, reduced net income levels for fiscal 2006.”
They also said in the September PR they planned to introduce the new DX2 system "later this month". So far, have not seen a PR on the DX2. I'm expecting an ok quarter but ongoing R&D expenses are likely to cap earnings. Tim
CPNE This is a pretty tough market. A little surprised that CPNE with a 7% q-q rev growth and net inc. more than doubling q-q and the stock is trading down in pre-market?? Tim