SSK, on ETLT, CXTI and topic of growth.
On ETLT. Fair enough. Something smells definielte hence the PE = 3 and P/B < 1 and P/"restricted" Cash < 1
also on CXTI, that is definitely a hge red flag that CFO resigned. now thinking back, I think the fact that the CFO said he moved to china north acquisition corp was a smoke screen. if he has just resign without saying he is leaving to be a cfo in another public company I would probably have sold my shares at a very nice gain at that point. but live and learn. I didn't sell and hold till the end (but now have sold everything.. all of them under $1.. most of them under $.50 actually)
SGZI show growth but then again how can we be so sure whether it is real or fabricated. which also makes me think that maybe ETLT is not fraud because if they want fraud why don't they fabricate growth and profit and then they can get the stock high and then sell the shares... so a lot of it is psychology as well.. and no one really know what is going on except the management themselves who is playing the cards... we are playing blind if we have to discount on what most of them said.. (cash position, profit, contract etc)
AOB is surely overvalued at $12 and that is why the CEO dumps 1M shares at that price but in a couple years (I would say 3 years) I think $12-$15 is a reasonable price for it and not overvalued anymore (at that time they will earn $1+ epr share per year IMO).. now they are at .60 per share.. they will grow 30% on earning but they keep diluting shares so for EPS probably they will grow 20% or so.. JMHO..
On paying premium for growth, I think that is one of the hardest thing to judge because you are paying those premium with risk.. which is the risk of them not able to meet their growth.. and also for many companies that has track of high growth for the last couple years once they get big enough the growth will definitely slow down (just a law of large number. surely some company will take longer before growth slow down like GOOG for example) and when they hit that first bump, the stock will always drop a lot (like cut in half etc.. happens to every fast growing companies even the top companies like SBUX, NTRI, HANS etc). and it's funny to see that the market/street is always surprised to see the first time those ocmpanies missed their earning... many sets unrealistic expectation..
I've seen companies try to manage stock price by managing growth so they continue to grow 10% for many years (let's say 5-6 years) then they slam the result and they are down 40-50% on the revenue.. then afterwards they try to increase 10% per year again for several more years...
stock market surely is not easy... but it's fun though...
sorry that I ramble too much..
all the best for 2008 and hope I can do decent in PSL 8..
Go Packers.. Go Favre..!
Stan
