***Official*** 2011 Stock Market Thread

[IHateMyJob2004]

Wrong Thread.

 

[FelixDeCat]

SEC suspends trading of 17 penny stocks

WASHINGTON (AP) -- The Securities and Exchange Commission on Tuesday suspended trading for two weeks in 17 small stocks in a move it said was part of its efforts to prevent fraud in thinly traded stocks.

The 17 companies are "microcap," or penny stocks that trade over the counter rather than on a major exchange. The SEC said there were questions about the adequacy and accuracy of information the companies have publicly reported.

The trading suspensions run from 9:30 a.m. EDT Tuesday to 11:59 p.m. EDT on June 20.

Stock promoters can sometimes conduct fraud schemes by taking large positions in thinly traded stocks and artificially inflating their price by touting them.

The SEC said the suspensions arose from a joint effort conducted by several regional offices, the agency's office of market intelligence and its new microcap fraud working group. The microcap fraud working group is targeting stock promoters as well as brokers, attorneys, auditors and others who work with them, SEC Enforcement Director Robert Khuzami said in a statement.

The companies are American Pacific Rim Commerce Group (APRM)
Anywhere MD Inc. (ANWM), Altascadero, Calif.;
Calypso Wireless Inc. (CLYW), Houston;
Cascadia Investments Inc. (CDIV), Tacoma, Wash.;
CytoGenix Inc. (CYGX), Houston;
Emerging Healthcare Solutions Inc. (EHSI), Houston;
Evolution Solar Corp. (EVSO), The Woodlands, Texas;
Global Resource Corp. (GBRC), Morrisville, N.C.;
Go Solar USA Inc. (GSLO), New Orleans;
Kore Nutrition Inc. (KORE), Henderson, Nev.;
Laidlaw Energy Group Inc. (LLEG), New York;
Mind Technologies Inc. (METK), Cardiff, Calif.;
Montvale Technologies Inc. (IVVI), Montvale, N.J.;
MSGI Security Solutions Inc. (MSGI), New York;
Prime Star Group Inc. (PSGI), Las Vegas, Nev.;
Solar Park Initiatives Inc. (SOPV), Ponte Verde Beach, Fla.;
and United States Oil & Gas Corp. (USOG), Austin, Texas.

Last week the SEC imposed a similar suspension against Uniontown Energy Inc. (UTOG), based in Henderson, Nev., and Vancouver, Canada.

 

[Azurik]

SEC suspends trading of 17 penny stocks

17 out of 100's isn't really doing much, but good for them. There's only one stock in there I use to follow.

 

[Azurik]

I think his insiders get the first whack because they pay for it. But we get tipped off soon enough.

I sold out, half last week and the rest today - probably could have waited as it looks like this will be pushed even higher, but profits are profits. Stock was RYUN, bounced from .24ish to .50 so far.

 

[FelixDeCat]

Am I too late for this pump 'n dump? Its a crumbly little co. with miniscule revenue thats still in the development stage. As usual its all hype, but if other people want to buy it, why not jump in? I dont own any of this stock.

 

[Imp]

No QE-3? So long, good luck? Enjoy the low interest rates?

Tomorrow is going to be fun...

 

[Azurik]

Am I too late for this pump 'n dump? Its a crumbly little co. with miniscule revenue thats still in the development stage. As usual its all hype, but if other people want to buy it, why not jump in? I dont own any of this stock.

Way late buddy. The pump on JAMN and the other big coffee play was early to mid-May, now you have stragglers who got the last piece of the mailers supporting it before the next leg down.

 

[TheNinja]

17 out of 100's isn't really doing much, but good for them. There's only one stock in there I use to follow.

For some reason CDIV rings a bell with me. I looked at that one at some point.

 

[IHateMyJob2004]

Grabbed some CRWS today. Way undervalued. Easy to understand.

 

[lothar]

Grabbed some CRWS today. Way undervalued. Easy to understand.

Responding to your PM from 4 days ago since you asked me about this earlier.

On CRWS, I get a DCF value of $8.64 after making a few adjustments.
I adjusted FCF down to $9.1 million, used a 12% discount rate, and anemic 3.1% FCF growth.

Reverse DCF shows Mr. Market is expecting -8% FCF growth based on current value? Wow.

I used another valuation method and got $10.1 intrinsic value.
I would lean closer to the $8 figure I got earlier since I trust that method more than the second one, but it's still close enough to say that the company is worth about $8-10/share and seems to be clearly undervalued.

 

[JS80]

Responding to your PM from 4 days ago since you asked me about this earlier.

On CRWS, I get a DCF value of $8.64 after making a few adjustments.
I adjusted FCF down to $9.1 million, used a 12% discount rate, and anemic 3.1% FCF growth.

Reverse DCF shows Mr. Market is expecting -8% FCF growth based on current value? Wow.

I used another valuation method and got $10.1 intrinsic value.
I would lean closer to the $8 figure I got earlier since I trust that method more than the second one, but it's still close enough to say that the company is worth about $8-10/share and seems to be clearly undervalued.

How are you getting $9m FCF and what is going to drive 3% growth?

 

[lothar]

How are you getting $9m FCF and what is going to drive 3% growth?

I "normalized" operating cash flow by tampering with everything I highlighted except "accretion of income/expense"(in total, $1.19 million worth of stuff). 154+273+760+16-13 = $1.19 million.

I also normalized CapEx from $0.2 back to $0.4 million. The company had CapEx of 0.3, 0.4, 0.4, 0.2, 0.5, 0.4, 0.2, 0.4, and 0.2 the years 2002-2010. I applied what I feel was a more "normalized" figure which a number between 0.3 and 0.4(I only picked 0.4 for my simplicity sake) would represent. Some companies posts large increases in revenues and cash due to massive cost reductions. I usually try to look at the history if I can so I won't be fooled by 'temporary' expense reductions.

In total, $1.19 million + $0.2 CapEx(I think I forgot to include this part in my earlier calculation). FCF adjusted downward again from $9.1 million to $8.9 million since I forgot to include the $0.2 million number. New target is $8.45/share. I consider my estimate to be a bit conservative.

3.1% is the median 5yr FCF growth.
6.7% is the median 10yr FCF growth.
I usually take the average of both the 5yr and 10 yr median FCF growth and use that (which would be 4.9%), but it seems FCF has slowed down recently, so I just picked the lower and more recent 3.1% number rather than using the 4.9% average.
If I use 4.9% FCF growth instead of 3.1%, that increases value to $9.30

Going back to the CapEx, if I use 0.3 instead of 0.4, that increases intrinsic value by ~$0.10, so you can also reach $8.54 or $9.40 depending again on which FCF growth % you choose to use.

But in the end, all these calculations doesn't matter.
I don't care about the "exact" valuation figures that much, I feel the company is worth somewhere between $8-10 and that's all that matters.

If this company were to lose Disney or Wal-Mart as their customer(which probably won't happen, but you never know), all these calculations and assumptions get thrown out the window.

 

[IHateMyJob2004]

I am more bullish than Lothar on CRWS. they have an acquisition model in place. The thing is, when they buy another company they are very good at cutting costs in the new company due to duplicated costs. They can usually let a handful of people go among other things. I think CRWS said somewhere that they can cut 1/3 of costs on a typical acquisition. Point being, even if they pay a fair market price, once they integrate it into the company, they are actually paying maybe 1/3 or 1/4 less do to efficiency gains that acquisition will have.

RISK: 1/3 of currrent business is Disney. All those Disney themed bed spreads and towels. That's CRWS. It's also leverage for when CRWS wants to get other products into stores like Wal-Mart. Wal-Mart wants Disney in their stores. So, they can not pressue CRWS as much. If anything, CRWS can pressure Wal-Mart.

Moat .... Disney contract. RISK: Loosing Disney.

EDIT: Lothario did something I forgot to do. Normalize Cap Ex. So my estimate is high. I think his $9 figure makes alot of sense. The adjustment of cap ex is not a huge one though. I might want to be in the $9.50-$11.50 range isntead of what I seaid.

 

[IHateMyJob2004]

Another value idea. Not thinly traded on average so I'll share. Still kinda low volume though.:
CSS

I have about 5 minutes into researching this one and it is quickly turning into one of those obviosuly good buys. The best investments usually take less than 15 minutes to decide on. I ahve 10 minutes left.

 

[JS80]

Just glossing over quickly my questions, as an accountant, would be is it more appropriate to use more recent quarterly numbers (looks like you're using FY March 2010), how would you adjust for seasonality when you annualize, I do think capex is understated even at $400k/year, why are they keeping cash so low at the end of the last couple quarters? Why is inventory ballooning?

 

[lothar]

Just glossing over quickly my questions, as an accountant, would be is it more appropriate to use more recent quarterly numbers (looks like you're using FY March 2010), how would you adjust for seasonality when you annualize, I do think capex is understated even at $400k/year, why are they keeping cash so low at the end of the last couple quarters? Why is inventory ballooning?

I generally stick with annual, but also usually use TTM figures(totaling up the past 4 quarters should help with seasonality)
In conclusion, I try to do both if I can. I haven't done my own "normalized" TTM figures in this case, but unadjusted TTM figures should be available on sites like M* and such.
Annual FY March 2011 should be out sometime the end of this month so maybe I'll just wait for that and then read back the quarterly statements if I'm lazy or feel like I don't have much time. I will start reading the previous quarterly reports on Friday morning and see how far I get.

About inventory, good question. That's a lot of inventory buildup.
I'm guessing the answer is in the quarterly reports which I haven't studied yet. I've only looked at the annual one. If it's not in the quarterly reports, I'm guessing(or hoping) management would answer that question in the upcoming annual report.
I hope this company won't be the next Sketchers(a company some value diehards fell in love with until they reported massive inventory issues).

I haven't studied this particular company as far as IHateMyJob has, so he may be able to answer more questions than I can.

 

[Dubb]

they announce Monday.

http://www.prnewswire.com/news-rele...rter-and-full-fiscal-year-2011-123214798.html

interesting stock...I might roll the dice on this one.

 

[lothar]

they announce Monday.

http://www.prnewswire.com/news-rele...rter-and-full-fiscal-year-2011-123214798.html

interesting stock...I might roll the dice on this one.

Looks like I will wait till Monday then rather than trying to rush read the quarterly reports.

 

[IHateMyJob2004]

I haven't studied this particular company as far as IHateMyJob has, so he may be able to answer more questions than I can.

I can only speculate right now. Search for confirming data later.

Summertime is the season for movies. Cars 2 is coming out in on June 24. It's probably a contributing factor. The latest pirates movie came out last month. Winnie the Poo in July. It's safe to say that Cars and Winnie the Poo will drive sales of bedspreads among other things. I'd imagine that they had to start buying earlier to have the product ready to go.

Gurufocus has 10 years of quarerly data. Many years, inventories spike in the July quarter then drops slightly. Not true for every year but for most this is true. In 2007, inventories tanked to a low in July. Looking over movies, Disney only had Meet The Robinsons and I think that was a March release. Not sure about Pixar.

It would be itneresting to correlate invntories with this:
http://en.wikipedia.org/wiki/List_of_Disney_theatrical_animated_features

I do see the reent run up you are talking about. Might have something to do with any recent aquisitions. Saly, I don't know when the last aquisition occured.

 

[lothar]

I can only speculate right now. Search for confirming data later.

Summertime is the season for movies. Cars 2 is coming out in on June 24. It's probably a contributing factor. The latest pirates movie came out last month. Winnie the Poo in July. It's safe to say that Cars and Winnie the Poo will drive sales of bedspreads among other things. I'd imagine that they had to start buying earlier to have the product ready to go.

Gurufocus has 10 years of quarerly data. Many years, inventories spike in the July quarter then drops slightly. Not true for every year but for most this is true. In 2007, inventories tanked to a low in July. Looking over movies, Disney only had Meet The Robinsons and I think that was a March release. Not sure about Pixar.

It would be itneresting to correlate invntories with this:
http://en.wikipedia.org/wiki/List_of_Disney_theatrical_animated_features

I do see the reent run up you are talking about. Might have something to do with any recent aquisitions. Saly, I don't know when the last aquisition occured.

They are missing the Mar'10 quarterly statement.
I commented about that on the page there about 3 hours ago and hope it gets fixed.

Good point about the Disney movies.

 

[IHateMyJob2004]

They are missing the Mar'10 quarterly statement.
I commented about that on the page there about 3 hours ago and hope it gets fixed.

Good point about the Disney movies.

I can mention it to the guy that runs the site. I do side work for him.

He gets his financial data from a service so the provider must be missing it. I'm sure he can bubble it up though.

 

[FelixDeCat]

dp

 

[FelixDeCat]

Am I too late for this pump 'n dump? Its a crumbly little co. with miniscule revenue thats still in the development stage. As usual its all hype, but if other people want to buy it, why not jump in? I dont own any of this stock.

Todays action:

JAMN.OB 2.44 +0.34 +16.19%

:whiste:

 

[Azurik]

Todays action:

JAMN.OB 2.44 +0.34 +16.19%

:whiste:

You're still playing with a has-been pump. Your chart is too selective in its timeframe - expand it to the 3 month level and you can clearly see where the pump happens. There's follow-through mailer, but this thing is done. You're basically gambling at this point.

 

[FelixDeCat]

You're still playing with a has-been pump. Your chart is too selective in its timeframe - expand it to the 3 month level and you can clearly see where the pump happens. There's follow-through mailer, but this thing is done. You're basically gambling at this point.

I dont own it at all. My appetite for risk is rather low right now. But I would hate to see this thing go to three just based on momentum even though it really has no reason to. But then Mr Market pretty much does whatever it wants to regardless of what we expect or desire.

I would be lying if I didnt say I wasnt tempted. I only looked back because some people were trading it on profit.ly. If it does break $3 Im going to be pissed.