abh3vt, special situation, one time even etc is indeed important.
Sorry for the late reply. I was only allowed to make 3 post per day.
Here's what I post about teh income tax situation for example in the mdpa board and hopefully it will educate them. and if this will make some of the traders leave and drop the price tomorrow, so be it. (I know it's kind of counterintuitive as more people holding the stock no matter if it's trader or uninformed shareholder it's better for the stock price)
Stan
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I just want to share (and hopefully will be useful) about MDF income tax situation, though it will not impact the company for 1-2 more eyars (depending on h ow profitable MDS is in the next 2 years. the more profitable the faster the full income tax rate will hit)
I want us to prepare and think about the scenario and hopefully even after the tax consideration you will still find MDF undervalued.
A lot of stock tanks after the full income tax rate hits, some that I used to own is NTST and CADA.
here's another example article from fool.com. in this example fool.com is using a company that has high growth, and still the incomet ax scenario impacts them
Here's an eye popping to me (though this example they probably have other cost increase besides the incoem tax of 35%).
"J2 increased its 2004 revenues by 48% over 2003. Net earnings were down 12% -- but that was because this year, J2 actually had to pay taxes."
Stan
OUR TAKE
To all you penny-stock pushers out there (and you know who you are): Don't be sending me any more generous offers of free stock advice on the next new bottle-rocket stock from Phaser (ticker: RAYGUN). I've found a cheap fax stock, but it didn't take a fax to tell me about it -- just a subscription to Motley Fool Hidden Gems.
It's been more than a year since Hidden Gems profiled fax-by-computer company J2 Global Communications (Nasdaq: JCOM) as a "Watch List" stock. And over the 14 months since we became acquainted with the company, J2 has risen an eye-popping 35% -- beating the S&P 500 by better than 20 points. And you know what? The company's still undervalued.
According to its earnings release, published on Thursday, J2 increased its 2004 revenues by 48% over 2003. Net earnings were down 12% -- but that was because this year, J2 actually had to pay taxes. The company's free cash flow performance belied the seeming disconnect between last year's taxless numbers and this year's results, out of which taxes took a 33% bite. Year on year, J2 grew its FCF by more than 52%, generating $44.3 million worth of the green stuff in 2004.
The company's current market capitalization of just below $850 million gives it a price-to-free cash flow ratio of 19. Your average S&P 500 large cap, in contrast, sports a P/FCF ratio of 20. Does that means J2 is a worse-than-average company? Far from it. If you look at a couple of easy-to-find metrics, you'll see that the average S&P company achieves returns on equity and assets of 20% and 11%, respectively. J2 handily trounces both numbers, with an ROE of 28% and an ROA of 20%. The company also boasts an essentially debt-free balance sheet, along with $66 million in cash and equivalents in the bank.
