Stock Picks Bob's Advice
Sunday, 29 February 2004
"Seven Months Ago" A longer term view examining the week of August 4, 2003
Hello Friends! It is getting late Sunday evening and I guess I should be watching the Academy Awards with the rest of my family...but I am determined to get my 'housekeeping' chores for this website done before I call it a night. One of the things I have been doing each weekend is trying to see how the stocks I have picked have been doing. Sort of an appraisal of this entire process I guess. I mean I owe it to all of you who take the time to stop by to at least review what I have picked and tell you what has happened since! Eventually, I will try to start looking out one year instead of just seven months....this blog has been up almost a year now...and I once heard if you do something regularly for about six weeks you can make a habit of it. Past that point now!
As always, please always do your own due diligence and research all of the stocks posted here. Remember to cut your losses quickly and let your winnings run. In general!
I had a very busy week during that first week in August, 2003. I actually posted 11 stocks that week, so bear with me, and let's take a look at how they are doing now.
Atrion Corporation (ATRI) was posted on Bob's Advice
on 8/4/03 at a price of $34.70. ATRI closed 2/27/04 at $44.51 for a gain of $9.81 or 28.3%. They ARE planning to split 3:2 later this month.
On February 12, 2004, ATRI reported their fourth quarter 2003 results
. For the quarter, ATRI reported revenue of $14.8 million in 2002, vs $15.3 million in the same quarter in 2002. Earnings, however, were $.68 in 2003, vs $.57 in 2002. With the slight contraction in revenue, I would probably be cautious about committing new money to this stock..in my opinion.
Intier Automotive (IAIA) was posted
on 8/4/03 at a price of $16.50. IAIA closed on 2/27/04 at $15.86, for a loss of $(.64) or (3.9)%.
IAIA announced fourth quarter 2003 results
on 2/23/04. Sales were $1.4 billion for the quarter, up 35% compared to $1.06 billion in the same quarter in 2002. Diluted earnings per share were $.37 compared to a loss of $(0.09) in 2002. This company appears at least at first glance to be doing just fine.
Mylan Laboratories (MYL), a stock that I currently still own in my trading portfolio, was posted here
on 8/4/03 at a price of $34.50. On 10/9/03, MYL split 3:2 so our effective price on the website was $23.12. MYL closed 2/27/04 at $23.50 for a gain of $.38 or 1.6%.
On January 29, 2004, MYL third quarter fiscal 2004 earnings
. For the quarter ended 12/31/03, net revenues increased 9% to a third quarter record $349.8 million. Diluted earnings per share for the quarter were $.31/share vs $.24/share the prior year, an increase of 29%. It appears that this company is also doing just fine.
August 6, 2003, found me posting FTI Consulting
here at a price of $21.90. FCN closed 2/27/04 at $16.42, for a loss of $(5.48) or (25)%.
On 2/18/04, FCN announced their fourth quarter 2003 results
. For the quarter, revenues were $96.2 million, an increase of 6.2% compared with $90.6 million for the fourth quarter of 2002. However, earnings per share declined 26.8% to $.30/share, from $.41 the prior year. These results are not strong enough to continue to recommend this stock on this website. We will continue to follow this one, like I do with all of the others!
Hang in there....four down and seven to go!
Zimmer Holdings (ZMH) was posted here
on 8/6/03 at a price of $49.79. This orthopedic-related firm, which was spun off from Bristol Myers, has done well since out pick, and closed on 2/27/04 at $75.64, for a gain of $25.85 or 51.9%.
On February 9, 2004, ZMH announced fourth quarter 2003 results
. Due to acquisitions, ZMH had revenue growth of 90%, diluted earnings per share were up 38% over the prior year, and they increased 2004 eps guidance. They appear to be doing great, and the stock is following this underlying performance!
August 6, 2003 found me posting Pulte Homes (PHM)
on the blog at a price of $63.86. PHM split 2:1 on 1/5/04, so out effective recommended price was only $31.93. PHM closed on 2/27/04 at $52.76 for a very nice gain of $20.83 or 65.2%.
On 1/28/04, PHM reported fourth quarter 2003 results
. Revenues increased 24% to $2.9 billion, and diluted earnings per share increased 40% to $1.95 from the prior-year $1.39. The company also raised 2004 guidance. This was a GREAT report...and explains the amazing stock performance!
Next, on 8/6/03, I posted DRS Technologies
on the blog at a price of $27.98. DRS closed at $30.16 on 2/27/04 for a gain of $2.18 or 7.8%.
On 2/12/04, DRS third quarter earnings
. Revenue for the quarter jumped 68% to $280.6 million, attributed to the purchase of Integrated Defense Technologies Inc. Earnings for the quarter came in at $11.6 million or $.45/share compared with $7.4 million or $.41/share the prior year. This company and the stock still look attractive to me!
Hang in there, 7 down and four more to go!
Sunrise Senior Living (SRZ) was posted here
on 8/6/03 at a price of $23.95/share. SRZ closed 2/27/04 at $35.16 for a gain of $11.21 or 46.8%.
On 2/26/04, SRZ reported fourth quarter 2003 results
. Earnings per share actually DROPPED $.15 to $.67 from $.82 in the prior year. Revenues "under management" increased 160% to $1.7 billion. I don't really understand these numbers and would have to put a caution sign in front of this stock. I don't own any shares of this one, and would be a little careful in adding any positions even though it HAS been a great performer for us!
On August 7, 2003, I selected Jos A. Bank Clothiers
for the Blog at a price of $44.16. JOSB had a 3:2 split on 2/19/04, so our effective selection price was actually $29.59. JOSB closed 2/27/04 at $33.00 for a gain of $3.41 or 11.5%.
On 12/1/03, JOSB reported third quarter 2003 results
. Total net sales for the quarter ended 11/1/03 were up 24.4% to $72.0 million compared to $57.9 million in the same period of 2002. Comparable store sales were up 8.7%, while catalog and internet sales were up 25.6% during the quarter. Earnings per share increased 46% to $.38/share compared to $.26/share in 2002. These were GREAT results, and the stock still looks nice to me. As I have noted elsewhere, I do not own any shares of this stock.
O.K. just two more!!!
On 8/8/03, I posted eSpeed (ESPD)
on the blog at a price of $18.98. ESPD closed 2/27/04 at $20.19 for a gain of $1.21 or 6.4%.
On February 9, 2004, ESPD reported fourth quarter 2003 results
. Quarterly revenue was up at $27.7 million vs. $22.4 million the prior year. Net operating income, however, was down at $8.8 million vs $9.2 million the prior year. Diluted GAAP earnings/share were flat at $.15 both in 2003 and 2002 for the same quarter. Overall, this is a plus/minus report imho, and would put a 'caution light' on this stock avoiding any new committments, although not seeing news bad enough to outright sell this stock.
Finally, at long last, I picked Emulex (ELX) on the blog
at $22.46 on 8/8/03. ELX closed at $23.18 on 2/27/04, a gain of $.72 or 3.2%.
On 1/27/04, ELX reported 2nd quarter results
. Revenues were up 23% from the prior year. However, diluted eps actually came in at $.04/share, vs $.19/share the prior year. Like some of the others with similar results, sticking to our guidelines, I would have to put a caution on this particular issue.
Overall, for the 11 stocks, I had an average gain of 17.6% during this seven month period! Not too shabby indeed. Thanks so much for hanging in there for this rather tedious, but necessary review!
Remember, past performance is NO GUARANTEE of future performance for these or any stocks. I hope that you enjoyed this review and if you have any questions, comments, or words of encouragement, please feel free to email me at firstname.lastname@example.org
Posted by bobsadviceforstocks at 9:08 PM CST
Updated: Sunday, 29 February 2004 9:36 PM CST
"A reader inquires about PEG ratios, and Short-Interest"
Hello Friends! I really enjoy getting an email with a good question. First of all, I am an amateur investor myself, but I will try to answer any question the best I can.
Brian L. writes: "Here's my first question. On Feb 27th you give an overview of shuffle master (SHFL). You talked about outstanding shares and floating shares with a relationship to shares out short, What is this telling us about the stock and if this a short term indication how short? Also you talk about PEG being high or you will say, "It's only" what number is the middle of the road or neutral? Take care"
Indeed, on 2/27/04, (just two days ago), I posted SHFL
on this website. Most of my statistics come from the "Key Statistics" on Yahoo.com
First question, what about the "short interest." For me, this is a number which gives me two bits of information, 1) if this is high...more than a day or two of trading volume...then this may be an opportunity to benefit from a short 'squeeze'. That is, if the price rises on good news, the stock may head higher quickly as short-sellers look to cover their positions. In the case of SHFL, we can see that the short ratio is 26.925, with 5.71 million shares out short or 37.80% of the float. This actually, per Yahoo, expanded from December 2003, by about 500,000 shares. 2) However, a word of caution, short sellers are not completely ignorant either, and maybe there is information out there on a stock that is potentially damaging....so a short interest this high also must make one a bit cautious...sort of going against the trend.
I went on the web to see if I could get anything else. Best I could find was a definition on investorwords.com
, which stated that: "Short interest divided by average daily volume over some period, usually 30 days. Some investors believe that a high ratio is a bullish indicator, and a low ratio is a bearish indicator." As we look at stocks, it is just one more factor that we should consider...and maybe we can all get a better feel for what will happen with the stock price in the near future!
Next you asked about the PEG ratio. I usually pick this up also from Yahoo.com. The PEG is a measure of valuation that is more informative than the standard P/E ratio. The P/E is a static number indicating the current price over the trailing earnings. If a company is expected to grow quickly in the future, it may indeed be reasonable to pay a higher P/E if the growth is coming soon. This is how the P/E ratio is developed. This is somewhere along the lines of GARP...not the "World According to..." but "Growth At a Reasonable Price."
What PEG is reasonable? Tough call. Certainly PEG ratios near one or under are quite reasonably priced. This suggests that the p/e and the growth rate are fairly in synch. If you are paying over a 2.0 PEG then you are certainly paying a premium for the growth, in my opinion. That doesn't mean that a low PEG will guarantee that a stock will rise or that a high PEG means the opposite...but just another factor to get a feel for the valuation of an investment. I try to keep my analysis a little 'eclectic' if that is the right word (!), meaning I don't want to be truly JUST a growth investor, or a value investor, but more along the lines of growth at a reasonable price I guess!
Again, looking on the Web, I found a nice explanation
from the Motley Fool website.
I hope that this discussion is helpful for you! I really DO enjoy getting emails and questions from people who read what I write. It is my sincere wish to be informative. But remember, I am NOT an investment advisor and I am learning along with you about all of these investment ideas!
Posted by bobsadviceforstocks at 7:56 PM CST
Updated: Sunday, 29 February 2004 7:59 PM CST
How are we doing?" A look back on the week of December 22, 2003"
Hello Friends! Thanks for stopping by again. It is the weekend...and soon we will be starting another trading day. Weekly, I like to look back a short period of time, currently we are about nine weeks out, and see how my selections have performed. As always, please be sure to do your own due diligence on all of these stocks and consult liberally with your investment advisors!
During the week of December 22, 2003, I posted six stocks on this Blog: CompuDyne (CDCY), Computer Sciences Corp (CSC), Ventana Medical Systems (VMSI), Faro Technologies (FARO), Sanderson Farms (SAFM), and Sharper Image (SHRP). Of those stocks, I currently have shares of Sanderson Farms (SAFM).
I posted CDCY on this blog
on 12/22/03 at a price of $10.051. CompuDyne closed 2/27/04 at $8.85 This represents a loss of $(1.201) or (11.9)%.
Computer Sciences was posted on Bob's Advice
on 12/23/03 at $43.80. CSC closed on 2/27/04 at $41.79 for a loss of $(2.01) or (4.6)%.
Ventana Medical Systems was posted here
on 12/23/03 at a price of $39.80. VMSI closed 2/27/04 at $41.48 for a gain of $1.68 or 4.2%.
I posted Faro Technologies (FARO)
on Bob's Advice on 12/24/03 at a price of $23.90. FARO closed 2/27/04 at a price of $27.81 for a gain of $3.91 or 16.4%.
Sanderson Farms (SAFM) was posted here
on 12/24/03 at a price of $42.79. SAFM just had a 3:2 split, so our effective selection price was actually $28.53. SAFM closed 2/27/04 at $35.35 for a gain of $6.82 or 23.9%.
Finally, my favorite mall store, but a stock I have never owned, Sharper Image (SHRP), was posted on Bob's Advice
on 12/26/03 at $32.40. SHRP closed 2/27/04 at $35.63 for a gain of $3.23 or 10.0%.
The average performance for these stocks was a gain of 6.33%. Really not too bad for this group of stocks selected on the week of December 22, 2003.
Thanks again for stopping by. If you have any questions, comments, or words of encouragement, please feel free to email me at email@example.com
Friday, 27 February 2004
February 27, 2004 Shuffle Master (SHFL)
Hello Friends! Thanks so much for stopping by...and thanks especially for those of you who have taken the time to email me and let me know that you are out there and following this website. I suppose I would blog for just myself, but if I can know that I am sharing ideas with others, well it just makes it that much more meaningful for me. As always, I must recommend that you all do your own due diligence and research prior to making any investment decisions based on what you read here. Also, please consult with your investment advisors to make sure that these investments are appropriate and timely for you!
I came across Shuffle Master this afternoon, while looking through the lists of top % movers. SHFL is currently trading at $41.45, up $2.56 or 6.58% on the day. According to the money.cnn.com "snapshot"
, SHFL "...develops, manufactures and markets automatic card shuffling equipment, table games and video-slot machine game software for the gaming industry."
Looking for latest earnings reports, I quickly found the first quarter 2004 earnings report
on Yahoo. In fact, this came out yesterday just after the close of the market, and is probably the reason why this stock is behaving so well today. For the quarter ended January 31, 2004, "...the Company reported revenue of $15.6 million, compared to $11.9 million for the same quarter a year ago, an increase of 31%. Net income for the quarter was $5.9 million or $.34 per diluted share, compared to $3.3 million or $.19 per diluted share for the first quarter of fiscal 2003."
Lookin at Morningstar.com "5-Yr Restated" financials
, we can see the BEAUTIFUL revenue progression from $27.1 million in 1998, $28.9 million in 1999, $38.9 million in 2000, $48.0 million in 2001, $56.1 million in 2002, and $63.5 million in the trailing twelve months.
In an equally pretty fashion, earnings per share have improved each year from $.15/share in 1998, $.20 in 1999, $.53 in 2000, $.63 in 2001, $.77 in 2002 and $.95 in the trailing twelve months.
Free cash flow has also been improving: $9 million in 2000, $18 million in 2001, $18 million in 2002 and $22 million in the trailing twelve months.
Balance-sheet-wise, this is equally nice. They have $17.3 million in CASH, enough to pay off both the current liabilities of $12.0 million and the long-term liabilities of $400,000 combined. In addition, they also are reporting on the Morningstar website $23.4 million in other current assets. A very pretty picture indeed!
If we look at "Key Statistics" from Yahoo
, we can see that SHFL has a market cap of $687.57 million, a trailing p/e of 42.00, but a forward p/e (fye 31-Oct-05) of only 26.74. With the rapid growth of this company, the 5-yr estimated PEG is only 1.35, making this a reasonable value. The Price/Sales ratio is quite high though at 9.57.
Per Yahoo, SHFL has 16.59 million shares outstanding with 15.10 million of them that float. There is an INORDINATE number of shares out short as of 1/8/04, representing 5.28 million (!), which is 34.95% of the float, or 17.189 average trading days. With the good earnings news, there may be a scramble for the exits here as the stock rises in spite of the shares that have been pre-sold and need to be covered.
No dividend is paid, and the last stock split was in June, 2001, when a 3:2 split was paid.
Taking a brief look at the technicals, we can see from a stockcharts.com point and figure chart
that this stock was trading sideways until March, 2003, when it broke through a resistance level at about $20.00/share and has headed up fairly strongly to its current levels in the low $40 range. The technicals look nice imho, and I would not be going short against this one. By the way, I do NOT own any shares of this, but certainly would be interested if I wasn't sitting on my hands, waiting for a sale of a stock before buying....I also do NOT have any short or other option positions on this stock.
Just wanted to clear the air on all of that!
Thanks so much again for stopping by! If you have any comments, questions, or words of encouragement please feel free to email me at firstname.lastname@example.org
Wednesday, 25 February 2004
February 25, 2004 Lipman Electronic Engineering (LPMA)
Hello Friends! The market is trying to bounce back today after several down days. As I write, the Dow is trading at 10604.13 up 37.76, and the NASDAQ is at 2020.78, up 15.34 on the day. But you know how these indices can fade or soar in the last fifteen minutes of the day.
I came across this stock earlier today and it doesn't fit into our usual mold as this stock was a recent IPO...but the numbers look attractive to me. According to the money.cnn.com "snapshot"
, Lipman Electronic Engineering Ltd. (LPMA) "...is a developer and provider of electronic payment systems and solutions. The Company offers products such as land-line and wireless point-of-sale terminals, cash registers & retail automated teller machines." As I write, LPMA is trading at $44.98, up $4.11 on the day or 10.06%. I do not own any shares of this stock.
Looking for recent earnings, I found the fourth quarter 2003 earnings report
which was released yesterday after the close of the market. It was this earnings report that stimulated the market to push the price of this equity higher. For the fourth quarter 2003, revenues were $36.9 million, a 49.6% increase over revenues of $24.6 million for the fourth quarter of 2002. Net income for the quarter was $9.6 million, or $.88/diluted share compared to $6.9 million or $.66/diluted share for the 2002 quarter.
Looking at the "5-Yr Restated" financials from Morningstar.com
, we see that revenue has grown nicely from $16.5 million in 1998 to $85.5 million in the trailing twelve months. With over $36 million in revenue in the last quarter of 2003, the company, without even any additional growth, is performing at a $140 million/year revenue rate currently.
Earnings per share are not listed on Morningstar.com, but from the above earnings report, we can see that the company is experiencing strong earnings growth. Free cash flow has also been nice, improving from $1 million in 2000, to $17 million in 2002. The balance sheet, as listed on Morningstar.com, shows $36.7 million in cash, with an additional $31.6 million in other current assets. This is balanced against $8.8 million in current liabilities, and only $3.8 million in long-term debt. This company has a nice balance sheet!
If we look at "Key Statistics" from Yahoo.com
, we can see that the market cap is a moderate $570.64 million. The trailing p/e is beautiful at 17.72. No PEG is available as apparently no estimates are out there...this should change quickly! They do sell at a bit of a steep price/sales ratio of 4.95.
There are only 12.77 million shares outstanding and 7.10 million of those that float. No cash dividend is paid, and no stock dividend is reported on Yahoo.
I like this stock because of the dynamic record of revenue growth, the recent beautiful quarterly report, and nice valuation with perfect balance sheet. I am unsure about the company, as it is a recent IPO...and I would rather see more of a trading history. In any case, I am sitting on my proverbial hands avoiding any new purchases until I get to sell a portion of one of my holdings with a gain!
Thanks so much for stopping by! Please be sure to do your own due diligence and consult liberally with your own investment advisor. If you have any questions, comments, or words of encouragement, please feel free to post them right here (!), or email me at email@example.com
Tuesday, 24 February 2004
February 24, 2004 Mannatech, Inc. (MTEX)
Hello Friends! Thanks so much for stopping by. I hope that you find my investment discussions stimulating but that you DO your own due diligence on each investment discussed here prior to taking any action. Also, please discuss these things with your investment advisors to make sure they are appropriate for you.
Scanning the lists of best gainers I came across Mannatech Inc. (MTEX) that closed today at $9.98, up $1.08 or 12.13% on the day. I don't like low-priced stocks very much but this stock is ALMOST $10/share and its numbers, while not perfect, are certainly provocative! I do not own any shares or positions in this company.
According to the money.cnn.com "snapshot"
on MTEX, Mannatech "...develops and sells proprietary nutritional supplements and topical products through a network marketing system, offering its products worldwide through a network consisting of 192,000 active associates." This sounds a little like a multi-level marketing plan like Amway...hmmm.
I found the third quarter 2003 earnings report
on the Mannatech Website. Net sales for the quarter were $49.7 million, a 44.1% increase over the same quarter the prior year. Net income for the quarter was $2.9 million or $.11/diluted share compared to $.2 million or $.01/diluted share the prior year.
Looking at the "5-Yr Restated" Financials on Morningstar.com
we see that revenue growth has been a bit erratic between 1998 and 2000 when it changed from $165 million to $150 million. Revenue bottomed at $129 million in 2001 and has been heading higher since. I would prefer to see five years of steady revenue growth instead of this "V" pattern, but they appear to be growing steadily for the last several years.
Earnings have improved since 2000 when they came in at $(.30)/share, turned profitable at $.07/share in 2002, and are reporting $.24/share in the last twelve months per Morningstar.
Free cash flow which was $(9) million in 2000, improved to $6 million in 2001, $9 million in 2002, and is at $16 million in the trailing twelve months.
The company appears to be quite solvent with $17.1 million in cash per the website, and $13.0 million in other current assets. Their current liabilities stand at $19.2 million with only $800,000 in long-term debt per Morningstar.com.
This is certainly a small cap stock with a market cap of $258.02 million. The trailing p/e is 41.07 but no forward p/e reported on Yahoo (perhaps due to lack of analysts?). Thus, no PEG is possible. They are selling at 1.32 times sales...so not unusually expensive on this basis.
Yahoo reports they have 25.85 million shares outstanding with 14.40 million of them that float. There are 1.05 million shares out short, representing 7.32% of the float or 4.835 trading days. This was as of 1/8/04; the prior month, the short interest stood at 477,000, so this has more than doubled over the 30 day period.
A small cash dividend of $.10/share is paid yielding 1.12% and no stock dividends have been noted on the Yahoo site.
If we look at the point and figure chart from Stockcharts.com
, we can see that this stock was generally trading down between 1999 and 2000, traded flat between 2001-2002 where it appears to have had a "double bottom", and then broke through resistance in June, 2003 at about $4.25/share, and has headed higher since. It doesn't really look too bad a chart to me...but then that is certainly not my strength.
This is an interesting stock to consider. I certainly am not in the market for stocks having sold several at 8% losses...and am waiting for a sale on a gain...and then will consider adding a position. The stock is a little small for me and the price about $10, leaves little room for any correction if you are sticking with the 8% loss rule. Not exactly a high-quality stock...but then again, if you would like a small cap stock with nice growth characteristics, nice balance sheet, growing free cash flow...and you think this multi-level marketing plan selling vitamins is the way to go...well then this just might be your cup of tea...or should I say your multivitamin of the day?
Thanks again for stopping by! Please email me at firstname.lastname@example.org if you have any questions, comments, or words of encouragement!
Monday, 23 February 2004
"Trading Transparency" CREE
Hello Friends! I didn't think I would be posting another sale so fast...but was watching CREE closely. Earlier today, it passed the 8% loss price and my 200 shares were sold at $22.85. I purchased the 200 shares on 1/16/04, about a month ago, at a price of $25.13. I will sit on my hands and wait as patiently as possible before replacing this position. The plan is to wait until one of the other issues has a portion sold at a GAIN to indicate that the market may be turning to a positive direction....otherwise, I will keep watching the stocks...the next stock threatening to be sold is MYL...my Mylan Labs, the generic drug company.
Thanks again for stopping by! Please do your own due diligence on all of the stocks discussed on this website. If you have any questions or comments please feel free to email me at email@example.com
Posted by bobsadviceforstocks at 1:54 PM CST
Updated: Monday, 23 February 2004 1:56 PM CST
February 23, 2004 Escalon Medical Corp. (ESMC)
Hello Friends! It is another Monday, and another down day in the market. Looks like this market needs to correct. Futures start out positive, the market opens up and then slides as the day progresses. Not very encouraging. Now, if I can keep with my strategy, maybe we will do a bit better...that is...after I have sold on an 8% loss, to try to AVOID replacing that issue in the portfolio until I have SOLD on a GAIN...sort of letting our sales and purchases guide us minimally in timing the market...or at lease assessing the market! Currently am at 22 positions...and still in plenty of margin. CREE is close to a sale...but will give it the full 8%. I think I have sold a couple of these prematurely as well on perceived weakness rather than fundamentals...and will try to avoid that in the future...those sales include Davita and Eon Laboratories....which have actually held up well and also Fair Isaac. But I am still learning and I hope that you are learning with each trade as well!
Continuing to look at the stocks with nice gains, I came across Escalon Medical Corp. (ESMC) today. As I write, ESMC is trading at $10.60, up $.54 or 5.37% on the day. I do not own any shares. According to the money.cnn.com "snapshot"
, ESMC "...develops, markets and distributes ophthalmic medical devices and pharmaceuticals. The Co. is also in the process of developing ophthalmic lasers and drug delivery systems."
About a week ago, ESMC reported their second quarter 2004 earnings
. Net revenue for the quarter was up 15% to $3.8 million from $3.3 million the prior year. Net income jumped 136.1% to $820,961 or $.196/diluted share vs. $347,672 or $.103/diluted share in the second quarter of 2003.
Looking at the "5-Yr Restated" financials
on Morningstar.com, we find that revenue which dropped slightly between 1999 and 2000 from $7.6 million to $6.7 million has been steadily increasing since then to $13.4 million in the trailing twelve months.
Earnings per share also dipped to a loss in 2000 at $(.27)/share but have improved steadily since then to $.48/share in the trailing twelve months.
Free cash flow, while not large, has been positive lately improving from $1 million to $2 million in the trailing twelve months.
The balance sheet appears adequate if not impressive with $300,000 in cash reported with $4.5 million in other current assets, enough to cover the $3.9 million of current liabilities, but not enough to also cover all of the long-term liabilities of $4.1 million.
If we look at the "Key Statistics" from Yahoo
, we find that this is certainly a MICRO-cap stock (see the prior posting), with a market cap of $36.59 million. The trailing p/e is only 16.43, and price/sales is at 2.41.
There are only 3.41 million shares outstanding with 3.40 million of them that float. Only 12,000 shares out short as of 1/8/04, representing 0.414 trading days and only .35% of the float. No cash dividend is paid, and the last stock split was a REVERSE 1:4 SPLIT paid on 11/97.
Taking a brief look at technical issues and charts (not my strength but something we all need to do!), we can see from the Point and Figure chart from Stockcharts.com
, that this stock has been trading sideways until early 2002 when it broke through a resistance level at about $3.25/share and has traded strongly upwards for the past two years! Take a look and see what you think.
Overall, the stock is very interesting if not a bit speculative due to the small # of shares outstanding. The valuation is right, the recent earnings results and revenue growth are nice, and the balance sheet is adequate.
Thanks so much for stopping by! Please remember to do your own due diligence and check out every investment discuss carefully yourself before deciding to make a purchase or sale, and also consult with your investment advisor(s) frequently!
Regards to all of my friends! Please email me at firstname.lastname@example.org if you have any questions, comments, or words of encouragement!
Posted by bobsadviceforstocks at 11:38 AM CST
Updated: Monday, 23 February 2004 11:19 AM CST
Sunday, 22 February 2004
February 22, 2004 "Definition of Market Cap"
Hello Friends! Just wanted to thank all of you for stopping by and visiting. Please feel free to browse through the many posts and if you have any questions, comment, or words of encouragement, please feel free to post them right on the BLOG or email me at email@example.com I will try to get some kind of response to you in a expeditious (nice word huh?) fashion.
Anyway, was browsing through the internet to see if I could get a good definition of market cap. On Ameritrade, they define "Small-cap" as less that $500 million market capitalization. "Mid-cap" is defined as being between $500 million and $3 billion, and "Large-cap" as being over $3 billion.
I think we will use under $100 million market cap as being "micro-cap".
Just a short comment tonight before we get underway in the market in the a.m. I am up early again...out walking at the local University...so will sign off and wish you all a great week in the market!
Regards to all!
Posted by bobsadviceforstocks at 10:50 PM CST
Updated: Sunday, 22 February 2004 10:55 PM CST
Saturday, 21 February 2004
"Seven Months Ago" A longer term view examining the selections of the week of July 28, 2003
Hello Friends! Thanks again for taking the time to stop by! I sure do appreciate when some of you take the time to comment on the BLOG by emailing me at firstname.lastname@example.org Helps me know you guys are really out there!
As always, please do your own due diligence on every stock and investment discussed here and discuss them with your investment advisor to find out what they think and whether the investment would be suitable for you prior to taking any actions.
I just finished posting the short-term, 7 week follow-up on this blog...and those numbers quite frankly were fairly mediocre. Let's see if I am doing a bit better longer-term...from 7 months ago, the week of July 28, 2003.
During that week I made nine selections. I will try to review them and see if there is anything new that suggests avoiding the issue or whether things are still on track.
On July 28, 2003, I posted Quality Systems
(and also purchased some of these shares both in my stock club and in my trading account) at $30.67. QSII closed on 2/20/03 at $49.30, for a nice gain of $19.36 or 63.1%
Looking for their latest earnings news, QSII announced fiscal 2004 third quarter results
on February 2, 2004. Net revenues were $18.2 million, a 26% increase from the $14.4 million last year. Net income was $2.6 million, a 35% increase over the $1.9 million the prior year. Fully diluted earnings per share in the quarter were $.40, a 33% increase over last year's $.30/share. This company appears to be doing just fine!
Coventry Health (CVH) was posted on Bob's Advice
on 7/29/03 at a price of $55.77. However, they split 3:2 on 2/2/04, so the split adjusted recommendation was at $37.18. CVH closed 2/20/04 at $41.45, for an effective gain of $4.27 or 11.5%.
CVH reported fourth quarter 2003 earnings
on 2/3/04. Revenue increased 29% to $1.22 billion from $946 million the prior year. They also reported net income of $69.7 million or $.76/share for the period vs $40.4 million, or $.45/share the prior year. These are very nice results! The stock was under some pressure after the announcement as forecasts, which were in line with expectations, still weren't quite as optimistic as some of its competitors. See Yahoo article
for more details on this.
Also on July 29, 2004, I posted CYH on the BLOG
at a price of $19.79. CYH closed on 2/20/04 at $26.99 for a gain of $7.20 or 36.4%.
Looking for the latest earnings report, I found the results of the third quarter that were announced on 10/23/03. The story
was posted on the CHS website: Net operating revenues were $723 million, a 30.8% increase over the $552.8 million reported last year. Net income increased 57.2% to $31.7 million or $.31/diluted share compared to $20.2 million or $.21/diluted share. The company appears to have its story intact.
On July 30, 2003, I posted CRL on Bob's Advice
at $35.60. Charles River Laboratories closed on 2/20/04 at $43.15 for a gain of $7.55 or 21.2%.
On 2/10/04, CRL posted fourth quarter 2003 results
. Net sales increased 9.2% to $156.0 million from $142.9 million the prior year. Net income for the fourth quarter of 2003 increased 17.9% to $20.6 million or $.42/diluted share up from $17.5 million or $.36/diluted share the prior year. This company is still doing just fine imho.
Guitar Center (GTRC) was posted on Bob's Advice
on 7/30/03 at $33.26. GTRC closed on 2/20/04 at $34.99, for a gain of $1.73 or 5.2%.
Looking for the latest quarterly report, Yahoo posted GTRC's 4th quarter results
on 1/29/04. Sales grew to $395.8 million vs $334.8 million the prior year. Net income grew 47% to $19.7 million or $.78/diluted share from $13.4 million, or $.57/diluted share the prior year. This company appears to be on track!
On July 31, 2003, I posted Chico's FAS on the blog
at a price of $27.22. CHS has done quite well since that post (too bad I don't own any shares)...and closed on 2/20/04 at $42.27 for a gain of $15.05 or 55.3%.
CHS reported a great third quarter 2003 results
on 12/2/03. They earned $26.8 million or $.30/share on $210.57 million in sales compared to year earlier sales of $137.26 million with earnings of $15.5 million or $.18/share the prior year. This company is doing GREAT!
On July 31, 2003, I posted ManTech on Bob's Advice
at a price of $24.86. MANT closed on 2/20/04 at $21.06, for a loss of $(3.80) or (15.3)%. (You KNOW I don't bat even close to 1.000!)
MANT reported 3rd quarter earnings results
on 10/29/03. Revenue for the 3rd quarter 2003 grew 39% to $181.6 million, operating income increased 48% to $16.2 million, and fully diluted EPS grew 21% to $.29. At least for the latest quarter results, MANT appears to be on track.
United Online (UNTD) was posted on this blog
on 8/1/03 at $33.64. This pick has performed MISERABLY and closed 2/20/04 at $16.75 for a loss of $(16.89) or (50.2)%.
On February 4, 2004, UNTD reported their 4th quarter 2003 results
. Total revenues were $96.9 million, an increase of 47% vs. $65.8 million the prior year. Adjusted net income for the quarter, excluding a one-time tax benefit, was $14.5 million, or $.21/share, a 65% increase from last year's $8.8 million or $.13/share. The company certainly appears to be doing just fine...but the stock price, alas, that is a DIFFERENT story!
Hang in there, just ONE more stock to report!
Finally, Alliance Data Systems (ADS) was posted on this BLOG
on August 1, 2003 at a price of $28.45. ADS closed on 2/20/04 at $29.25, for a gain of $.80 or 2.8%.
Looking for the latest earnings on ADS, they posted 4th quarter 2003 results
on 1/28/04. Revenue increased 27% to $298.3 million vs. $235.7 million for the fourth quarter of 2002. Net income increased 96% to $19.8 million for the quarter in 2003, or $.24/diluted share, vs $10.1 million or $.13/diluted share in 2002. These are great results in my humble opinion.
In summary, (FINALLY!), the nine stocks had seven that gained and two that lost money after being selected for an average gain of 14.4%. Overall, not too shabby and much better than our most recent seven week selection review. (see prior post.)
Thanks again for stopping by and bearing with me as I reviewed some of my past picks. If you have any questions, comments, or words of encouragement...please email me at email@example.com
Happy Saturday everyone!
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