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Re: Featured Stocks on Today's Edition of WallSt.net's 3-Minute Press Show
While it's good to get some PR, I hate the fact that EGMI is included on a list with INIX. INIX is a complete scam, and not worth the paper the stock is printed on. After a 1000 to 1 reverse stock split, they issue a few PR's about a new financial trading platform that, even if implemented, would be outdated by a decade. Then they announce a first contract with a client that has committed securities fraud. It just stinks.
I hate that EGMI would be included in the same breath as INIX, even though the topics are obviously unrelated. Still, it's always good to hear more about the Company. I look forward to earnings on the 26th.
Serica - Well, it's up 15% today, and more like 25% from its lows on Friday. Serica did share its annual report to shareholders. A few key new points that I gleamed:
- Serica increased Kambuna 2P reserves (gross probable gas and condensate reserves of the Upper Belaumai reservoir in the Kambuna field) by 15% from the original RPS Energy estimates of 25.7 million boe to 29.7 million boe.
- Serica's interest in Kambuna, based on the initial tranche gas sales price of approximately US$5.40 per mcf, valued by RPS Energy as at 31 December 2007 at US$145 million post tax (based on constant oil prices and costs). This figure does not take into account the higher gas price expected to be achieved for the remaining uncontracted gas
- The successful raising of approximately US$52 million in new equity before expenses increased our net cash balances at the start of 2008 to over US$70 million. With access also to a US$100 million debt facility primarily for field development, the Company is well placed to continue with its exploration activities and add to the growth of our oil and gas reserves.
EGMI - Well, we seemed to be strengthening of late, but it just dropped 11% to .48 Darn.
farwest, we seem to like a of the same stocks. I had been watching Serica (SQZ), but hadn't bought any shares until yesterday when it dipped to 1.16. I was initially tipped onto Serica on the InvestorVillage $PEAK board and started digging from there. With cash in hand, some nice 2008 prospects, and substantial production coming online at the end of 2008 from Kambuna (and more in '09), it just seemed like a good medium-term hold. We'll see if the sp continues to weaken, but I would think it wouldn't dip much below NAV (of 1.16 based on the Tristone report). Serica is going to need a successful well in '08 to move the SP. Otherwise we'll have to wait until 2009 for the Kambuna production to hit the P&L.
Seems like a safe bet to me.
SQZ.v - Serica Energy - I picked up some shares of this one today. It is currently trading at its NAV of 1.16 (based on a Tristone Capital research report) and has a nice package of exploration and development plays.
If anyone wants the research report, let me know. I can e-mail it to you. The 12 month target is $2.50 which is very conservative in my opinion.
EGMI mentioned at the Roth conference that they would set up an earnings conference call for March 26th. Maybe they are going to beat estimates... The share price has definitely been firming up of late.
Copper Jrs - Between First Metals, Zaruma, and Nord, I'm up to my eyeballs in copper plays. I did unwind a good chunk of my Nord when I found FMA (at .80 or so). As compelling as I think Nord is, First Metals is simply jaw dropping. Even with the jump to $1/sh, FMA's market cap is still significantly under Nord's and First Metals is already producing and is now cash flow positive (per mgmt). So, they're getting to immediately participate in the high Cu prices.
I like Zaruma as a nice 1 year hold, and I'm looking forward to watching them move to production. There are a lot of warrants that should have been exercised recently, so lets hope the recent upswing creates a base for Zaruma at .20. It's got significant upside potential, but it will undoubtedly fluctuate quite a bit until production begins.
FMA - First Metals - Here's a nice Research Report on the Co:
http://www.jenningscapital.com/pdfs/FMA02262008RaisingCopperPrices.pdf
FMA.TO - First Metals Up 10% today to .89. For a copper play, I like this one even better than Nord and Zaruma. It's currently trading at about 1.25x 2008 cash flow and it's already in production and cash flow positive. Unheard of multiple for a producer. Plus, there's plenty of exploration upside, and the next deposit to mine also has significant zinc as well as some gold and silver.
FMA.TO - First Metals - Undervalued Copper producer?
This one looks pretty good to me. It's currently trading at .78.
Positives:
- current producer (as of Dec)
- Should produce 2m lbs per month (23 million total due to start up in Jan/Feb)
- 20m drilling campaign to add to reserves
- Exploration Upside with Duprat project
- Any outstanding warrants are >= $1.35 / sh
- Safe region - NW Quebec
- Cash flow positive (recently reported by mgmt)
Negatives:
- Small resource life of approx 5 years
- 20m long-term debt
- Somewhat of a high cost producer
- Fabie Bay will be depleted by Q2 of 2009. Plans are to have Magusi River U/G running by then to take up where Fabie Bay leaves off (and add some zinc/gold/silver revenues as well). This could lead to a disruption in production levels in 2009.
-Capex required for Magusi - Current cash flow should help with much of the costs
Using current prices and estimated costs, I get the following:
43m shares outstanding (AFTER the 10% distribution to Globex required at commercial production stage) / Does not include warrants out of the money
23MM lbs Cu in 2008
Est Cu price: $3.25 (it's $3.75 today)
Est "all in" cash costs $1.50-$1.75 - I'll use $1.75 to be safe
Total Cash Flow: $34.5m
Trading at 1.25 x cash flow
It seems fairly undervalued to me.
Per the Roth presentation, an earnings conference call is scheduled for March 26th.
I picked up some this afternoon at .52. Not usually my kind of play, but in listening to the presentation and guidance, it was hard not to like what I heard. I see significant upside if earnings are as good (or better) than estimates.
PRFT: Decent presentation at Roth Conference and earnings CC on Mar 4th. Nuts, you still holding this one? With a forward P/E of 10 or so, it seems like a pretty cheap stock right now. The concern I'm hearing has to do with future "organic growth" as well as any potential recession impacts. Still, the stock has dropped from $25 to under $10 in the last 4 months or so. I would assume that much of this has already been factored in.
There was also a buy recommendation out today, although the target was lowered to $13. Still, with '08 estimated EPS of $.90-$1.00, it seems a pretty compelling buy.
SUTR - It came back nicely today. I picked up some cheapies at $4.90. It closed at $5.29.
Bobwins, do you still like Petro Reef (PER)?
Petro-Reef Resources Ltd. (TSX VENTURE:PER),
Petro-Reef Resources Ltd. ("Petro-Reef") is pleased to announce that it has closed an acquisition of approximately 400 boe/d, including approximately 70 barrels per day of crude oil, a 10% working interest in the Petro-Reef operated Alexander Gas Plant and interests in several key sections of undeveloped land in Petro-Reef's core area of Alexander in Alberta from one of its joint venture partners. Petro-Reef has acquired the assets for $10,400,000, subject to final adjustments. The acquisition is effective January 1, 2008.
Joe Werner, President and CEO of Petro-Reef was quoted as saying:
"This acquisition is strategic for the future growth of Petro-Reef. Not only did we acquire 400 boe/d of long life, low cost natural gas and crude oil production, we have increased our average working interest to over 75% for existing producing wells and 94% on several key development and exploration drilling locations. This acquisition solidifies Alexander as the key to Petro-Reef's ongoing success."
Concurrent with the acquisition, Petro-Reef amended its credit facilities with National Bank of Canada whereby the Bank increased the existing Revolving Operating Demand Loan from $7,750,000 to $13,500,000, and Non-Revolving Acquisition/Demand Loan from $2,250,000 to $4,000,000. Part of the amount of the purchase price for the acquisition was drawn on the Revolving Operating Demand Loan. No amounts were drawn on the Non-Revolving Acquisition/Demand Loan and there are no immediate plans to access that facility.
Financial Impact
As a result of the acquisition, current production is now approximately 1,250 - 1,300 boe/d, including over 150 barrels per day of crude oil production. As a result of recent drilling success and the acquisition, Q1 - 2008 production volumes are expected to exceed Q3 - 2007's average production by over 100%.
Petro-Reef is pleased to announce it is increasing its average 2008 production forecast to 1,600 boe/d. Based on the increased production and utilizing a $6.00 / mcf natural gas price forecast, Petro-Reef's estimates cash flow from operations in 2008 of approximately $10,000,000. Petro-Reef maintains a strong balance sheet as forecast debt to forward cash flow is not expected to exceed 1:1 at closing.
The acquisition is accretive for existing shareholders on a cash flow and production per share basis. Petro-Reef estimates cash flow per share accretion of 25% and production per share accretion of 33% as a result of the acquisition.
ATRM - Q4 EPS of .18 per share if you don't include the tax benefit. With the tax benefit, .38 per share EPS.
Aetrium Reports Strong Fourth Quarter and Year-End 2007 Results
Wednesday February 6, 4:10 pm ET
ST. PAUL, Minn.--(BUSINESS WIRE)--Aetrium Incorporated (Nasdaq:ATRM - News) today announced results for its 2007 fiscal year and fourth quarter ended December 31, 2007.
Revenue for the fourth quarter of 2007 was $9,315,000, up 84% from $5,073,000 in the fourth quarter of 2006. Income from continuing operations for the fourth quarter of 2007 was $4,153,000, or $0.38 per diluted share, as compared with $751,000, or $0.07 per diluted share, in the fourth quarter of 2006.
The fourth quarter of 2007 results included a tax benefit of $2,317,000, offset in part by an obsolescence charge of $179,000 for a discontinued product. The net impact of the tax benefit and the obsolescence charge was to increase Aetrium’s income from continuing operations in the fourth quarter of 2007 from $2,015,000, or $0.18 per diluted share. The tax benefit resulted from reversing a portion of the company’s valuation allowance for its deferred tax assets.
Income from continuing operations for the 2007 fiscal year was $6,697,000 or $0.62 per diluted share, on revenue of $27,990,000. This compares with income from continuing operations of $4,939,000, or $0.47 per diluted share, on revenue of $28,184,000 in 2006. The net impact of the $2,317,000 tax benefit and the obsolescence charge of $179,000 in the fourth quarter was to increase the company’s income from continuing operations for 2007 from $4,559,000, or $0.43 per diluted share.
“We are pleased to have brought 2007 to a successful close with a very strong fourth quarter,” said Joseph C. Levesque, president and chief executive officer. “Revenue and pre-tax income in the fourth quarter matched our highest level since 2000. Excluding the discontinued product obsolescence charge, our gross margin was 51%, in keeping with our long-term goal. The quarter demonstrated that our business model generates significant incremental net income to the bottom line as our revenues increase.”
“While revenues were very strong in the fourth quarter, our bookings for the quarter were below parity,” Mr. Levesque continued. “This reflected in part the large number of orders we received at the end of our third quarter, some of which were expected to fall into the fourth quarter. However, we believe it also reflected a cautiousness among our customers as they assess the potential impact of risks to the U.S. economy, a cautiousness that has continued into the first quarter. However, we believe utilization rates among our customers remain high, and industry forecasters are projecting a solid growth year for our segment of the semiconductor equipment industry with most of the growth coming in the second half of the year. Accordingly, we expect first quarter revenue growth over last year, but anticipate a material decrease from fourth quarter. Going forward, we believe that the competitive advantages of our current products and the solid customer relations we have forged with our expanding customer base will offer us opportunities for segment leading growth in 2008 of 20% or more over 2007.”
Certain matters in this news release are forward-looking statements which are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Such risks and uncertainties include, but are not limited to, adverse domestic or global economic conditions, slowing growth in the demand for semiconductor devices, the volatility and cyclicality of the microelectronics industry, changes in the rates of capital expenditures by semiconductor manufacturers, progress of product development programs, unanticipated costs associated with the integration or restructuring of operations, and other risk factors set forth in the company’s SEC filings, including its Form 10-K for the year ended Dec. 31, 2006.
SRZ - the negative here is that this creates 12% dilution in SRZ's o/s. While bullish in the fact that FNX sees a sound investment in SRZ at $2.85 and expects to make some coin, it does serve to lower eps and cash flow per share estimates for SRZ with increased dilution.
I still see this as a positive event, but the share price is down 5% after the news, so I'm not sure that others feel the same way.
ATRM - I bought some shares this AM at 4.90. After reviewing the Q3 results again, I have to think that Q4 is going to be very strong. The Co. sure hints that it will be a strong Q anyway. Like you've mentioned before though, it's probably the 2008 guidance that will really help push this higher (coupled with strong Q4 eps, of course). Let's hope that there is positive guidance in the midst of such a negative recession spooked market.
TAM ~ I'm still holding my 30k shares that I purchased over a year ago (well, 5k were purchased in the $1.30s). It's nice to finally see some green on this one. There's no question that TAM has an amazing Zn/Pb resource on its hands. The trick (as usual) will be for this lackluster management team to bring the project to production with minimal dilution and with somewhat untested technology (freeze ring). Of course, strengthening Zn/Pb prices are going to be important as well. The mining permit should be coming soon, so that should spark another rally in a month or two. Overall, I still like the risk/reward, but have really felt the pain as I watched it drop from its high of $3 last summer. Today's action has certainly helped my mood!
FRPT - I did as well on Thursday. This stock is so heavily manipulated, that perceived "value" just isn't a good driver for price appreciation. It could skyrocket from here, but I just didn't like the risk at this point.
Thanks for the update. I should have done the same when I sold yesterday, but it looks like you might have made out a little better than I on the trade!
What about Stillwater Mining (SWC)? Not a great performer of late, but worth a look.
FRPT - I don't think the next quarterly is due for a while yet. Since it will be their year end, they may not file until as late as mid-march. In 2007, they filed on Mar 16th.
I also bought 5k shares of FRPT today. I've been in and out of this one twice in the past 6 months and have actually made money (nothing short of a miracle given the destruction of this stock lately).
It does seem to be firming up in another down market day. While the sentiment is extremely bad since Force hasn't been receiving the lions share of MRAP contracts lately, their existing order backlog is quite incredible. I have to think that a good quarterly report or two will have to turn some heads at today's share price. We'll see...
I agree, shorting a zinc producer would be quite risky now (IMO). I feel like the price of zinc has already corrected to include any supply growth in 2008. Even with increasing supply, I can't imagine the price of zinc pulling another nose dive like it did in the 2nd half of 2007. In fact, I can even envision an increasing zinc price to go along with an increase in supply as investors start to look to 2009/2010 when many current zinc mines exhaust their supply life.
I can't say I'm bullish on zinc for 2008, but I do believe that most of the zinc price correction is behind us.
"The registrant will report the net income after tax of approximately $1,300,000 for the fiscal year ended September 30, 2007 compared with a net loss of ($274,026) for the year ended September 30, 2006.
The increase in the net income has arisen due to increased sales activity during the year, with sales of approximately $8,720,000 for the year ended September 30, 2007 compared to sales of $3,386,083 for the year ended September 30, 2006.
The increased sales have arisen primarily from successful marketing efforts mainly in the Australian market which led to securing some major supply contracts for the year.
This result is consistent with the quarterly results released by the company in the 10-QSB filings throughout the year."
POE: I believe that arnie81 was right on target.
"Deviated well L44H-D1 is flowing at a sustained, stabilized rate of approximately 3,940 barrels per day of 35.5 degree API oil with a water cut of 0.05%."
SAM - I agree, it does seem strange that a seller would throw a block out there that size (although it looks like it's 4 separate orders, but not sure how that breaks out).
Either the seller is a novice and doesn't have the foresight enough to let the stock run, or there's another agenda here. How much cash does SAM have in the coffer these days? Could it be financing related? It could be a short, or maybe someone keeping the price down for financing purposes. I don't know...I'm probably grasping at straws, but it does seem very strange to throw up that kind of ceiling on the share price.
SAM - I'm not much of a TA reader, but there is a pretty big block of 255k shares sitting on the ask. I'm tempted to buy some (I haven't owned SAM for many months), but am going to see if anyone bites off the block before I buy. Just maybe I'll get some a bit lower than .50 this week...
OT - I've always liked the Huskies. I've probably mentioned it before, but I have a soft spot for them after sitting with their fans in a Regional Final game in Greensboro, NC about a decade ago. We were in the Washington section simply because that was the only way we could get seats to watch UNC play. In the end, we enjoyed the Husky fans and were really rooting for them when they played UConn. Alas, it wasn't enough.
The ACC is a bit diluted now that we've added some weaker teams (Miami, Va Tech). Still, the big 4 NC schools always seem to put together some top notch teams (UNC and Duke probably a bit more than Wake Forest and NC State, but they're all always competitive)
Good luck this year. I'll certainly pull for Washington to come out on top in the PAC 10 (although UCLA looks awfully tough).
Not sure I follow... Who is Justin Dentmon? I'm guessing it's BB related. Living in the heart of ACC country, I can't say I know much outside of the greatest conference in college basketball. :)
AEY - I work for a large cable company, and we are required to buy set top boxes that are OCAP compliant. Although we can re-deploy older set-tops, all new purchases must have the OCAP spec (with the cable card). In fact, we were mandated to "destroy" all "brand-new-in-box" set tops in our warehouse if they were not OCAP compliant on July 31st of this year.
I have no idea how this affects AEY (and haven't researched the Co. at all). The OCAP specification enables manufacturers and retail distributors of set-tops, television receivers or other devices to build and to sell devices to consumers that will support all services delivered by cable operators. Basically, it allows a retail shopper to go into Best Buy and purchase their own set top or DVR without having to lease the cable companies hardware. All the cable technician has to do is to come out and insert a cable card to receive cable services.
If AEY is in the business of selling older generation set tops, then I imagine that this will adversely affect them in the US markets since OCAP is a requirement.
LBE made the jump to the TSX yesterday. You'll need to update your Yahoo tracker to LBE.TO
Zinc inventory - Absolutely, I follow the inventory numbers closely. I'm still extremely perplexed with Zinc since inventory has been shrinking for months now (aside from a slight uptick a few weeks ago). Yet the price of Zinc has moved down consistently.
I'm sure the spot price is factoring in all the expected "surplus" slated for 2008, but I haven't seen any indication from an inventory perspective that zinc is going to build in the fashion that the doomsdayers are saying. Demand is obviously still exceeding supply to this point, so the weakness in zinc spot prices baffle me.
I hope we are close to a bottom in zinc prices here. I still own both TAM and SRZ, so really need a strengthening of the spot price to turn these two around. I think it will come, especially if we get into late Q1 2008 and still don't see a major turnaround in supply/demand for zinc inventories.
I think anyone buying SRZ now will do very well for themselves in the coming months. I'd say doubly so for TAM, but since production is such a long way out, I couldn't consider it a low risk near term investment (to say the least). TAM is still my favorite "swing for the fences" play, but SRZ is more of a low risk investment if Zinc prices were to start to strengthen in the near term.
Bought some LBE this morning. It was hard to resist at 1.87. I never thought I'd have an opportunity to buy at less than $2.00 again. Hopefully we've found the bottom here.
Major 7.7 Earthquake Hits Northern Chile - Copper
Presidential spokesman Ricardo Lagos Weber said it was centered in the Andean village of Quillahua, near Calama, site of the large Chuquicamata copper mine
Could this have potential to effect copper prices? Evidently the area affected has a bunch of copper mines including Radomiro Tomic, Chuquicamata and ElAbra.
It will be interesting to see if this causes any mine closures and effects copper supply...
Thanks Monty! I don't think you'll admire Tara quite as much. Mr Biscan has amassed some amazing properties and seems like a good CEO. But Tara's lack of current financials have been plaguing the Co. since its inception as American Stellar. It seems like they're getting close, but still not up-to-date. I also have some cash flow concerns that I honestly haven't substantiated yet.
I do like Tara and made some good coin on it riding from .30 up to over $1.20 last year, but I hesitate to jump back in until Biscan can produce financials and build my confidence in him.
CS.to - Any predictions on earnings tomorrow? Was thinking about jumping in this afternoon for an earnings play, but the price has jumped a bit today already. Thoughts?
Monty, still with you in TAM. I hold 30k shares, so maybe not as fully invested as you are, but I have also felt the pain in the last few months.
For a Co. with an unbelievable resource and a slam dunk at current zn/pb prices, TAM couldn't be in a worse position right now. Management credibility, the egg shell permitting process, clarification of scoping study, required drilling to confirm historical resources, lack of anticipated debt financing due to the required drilling, and an overall bearish market on base metals have combined to create the "perfect storm" of negative sentiment.
I would imagine that this is the darkest hour for TAM until one or two of the above downers change for the better. Still, I can't seem to see past the $200m of operational cash flow coming from R-190 alone at current prices. That, plus the other resources in the scoping study have me hooked. This is either going to be a 10 bagger from here, or DOA. I'm fine with the risk, and still think the reward will be well worth the bumps in the road (especially at sub $1 prices). I am holding and actually bought a few more shares.
Zinc - Would shipments from Red Dog have anything to do with the recent LME inventory gains? I read somewhere that the majority of Red Dog shipments occur in the July-Sept timeframe (since operations slow down considerably in Alaska in the winter). Since Red Dog provides 10% of the worldwide zinc inventory, I was thinking that the LME gains could be related? If so, it could be a temporary build...
I still hold TAM as well (since my cost is still fairly low), but no longer hold any other zinc plays.