Archive for August, 2008

Madcatz (MCZ) Q1 09 Results

By: admin | Date posted: 08.28.2008 (6:00 pm)

MCZ – Madcatz Interactive (AMEX) – (Closing Price $0.76)

Madcatz reported its fiscal 2009 first quarter results on August 19 and reported decent numbers.

The company came in with revenue of 23.23 million and diluted earnings per share of -0.01. Revenue improved 6.2% sequentially and 59% year over year. However, without the revenue from the Saitek acquisition (7.5 million during the quarter) revenue would have been up only 7.9% over last year. EPS improved a penny from the prior quarter but was down a penny from last year. Gross profit, which has been a focus for Madcatz, improved both sequentially and year over year. It is interesting to note that Madcatz showed sequential improvement in revenue and EPS even though Q1 is its slowest quarter. (more…)

Top Stock Pick for 2008 – Beacon Power

By: admin | Date posted: 08.25.2008 (9:59 pm)

BCON – Beacon Power Corporation (NASDAQ) – (Closing Price – $1.30)

Beacon Power is my top stock pick for 2008. Beacon Power is one the verge of commercializing its “flywheel” technology and the company has a ton of positive catalysts going forward. I think this stock could very easily be a multibagger.

Beacon Power’s flywheel energy storage system helps support stable and reliable electricity grid operation. The flywheel system stores excess electrical energy from the grid in the form of kinetic energy via a mechanical battery spinning at very high speeds (>20,000 rpm). When the grid is short on electrical power the motor driving the flywheel acts as a generator and the kinetic energy is converted back to electrical power. (Look at these two short videos from the Beacon website for a better understanding of frequency regulation: video 1, video 2).

Beacon Power’s flywheel based energy systems have a couple of big advantages over lead-acid batteries which are also used for frequency regulation. First, flywheels are sustainable “green” solutions that do not use hazardous materials for production, nor create them during operation. Second, unlike batteries, flywheels operate reliably for many years with little or no maintenance. (more…)

Check out Redbox

By: admin | Date posted: 08.23.2008 (7:16 pm)

One of the investment strategies Peter Lynch touches on in his book One Up on Wall Street is to invest in companies that that you see every day. For instance, if you notice a new restaurant or retail store is performing really well you should check out the company’s stock (assuming it’s a publicly traded company) and see how the stock is performing. This can lead to potentially profitable investment opportunities.

One company that I have recently checked out is Redbox. If you don’t know the company by its name you have probably seen its DVD kiosks at a McDonalds, Walmart, or Walgreens. I first saw Redbox kiosks a couple of years ago but I never rented a movie from one until a few months ago. Now that I have tried it out I will only use Blockbuster (BBI) as a second option to Redbox. (more…)

Value and Arbitrage in Time Share Stocks

By: admin | Date posted: 08.20.2008 (10:50 pm)

One of the first stocks I recommended on my website was Silverleaf Resorts (SVLF). The stock was trading at low PE ratio and was also trading below book value. I recommended selling too early but my recommendation still resulted in a gain of 18% in five months. I have continued to follow Silverleaf Resorts and I think the current stock price provides a better opportunity than when I recommended the company previously.

Silverleaf Resorts is a perfect example of what value investors look for. According to Yahoo Finance Silverleaf has a book value of $4.98 however the current stock price is only $1.88 at today’s close. That means Silverleaf Resorts is trading at only 38% of its actual value.

In addition the company has good earnings. The company has given guidance for diluted EPS (earnings per share) between $0.56 and $0.58 for this year. If you take the low end of their guidance then you get a PE ratio of 3. That is a ridiculously low valuation. The company has also authorized the purchase of up to two million shares of its common stock (representing approximately 5.3% of the outstanding shares). (more…)

More Posts and Oil/Airline Trade

By: admin | Date posted: 08.18.2008 (7:58 pm)

For those of you who have been following my website/blog for a while I just want to comment on my lack of posting for the last couple of months. I have been very busy for the last couple of months but I now plan to post at least every other day (maybe more) for the foreseeable future. Therefore, I would recommend that you check in more often if you want to keep up to date on my stock ideas and commentary.

On another note I want to comment on the oil/airline trade that I have mentioned a few times (most recently in my post on my oil calls). I still think oil is due to decline but I think the easy money in airlines has been made. I actually think the huge spike in airline stocks has been overdone, especially considering that oil is still trading at $112 a barrel. I would be cautious taking a new long position in an airline stock. If you do own an airline stock and you are sitting on a decent profit I would recommend at the very least that you take some gains.

Disclaimer: I have no position in oil futures or airline stocks.

China Automotive Systems Q2 08 Results

By: admin | Date posted: 08.17.2008 (2:04 pm)

CAAS – China Automotive Systems (NASDAQ) – (Closing Price on Friday 8/15/08 – $6.03)

China Automotive Systems announced second quarter results on August 12 and reported sound results.

The company came in with revenue of 46.51 million and diluted EPS of 0.18. Revenue improved 28% year over year and 12% sequentially. Diluted EPS improved 80% year over year and was flat sequentially.

China Automotive Systems had given preliminary results in June for revenue over 52 million and EPS between 0.18 and 0.22. While the company met the low end of their EPS guidance they came in well below their revenue guidance. An analyst asked about this shortfall in the conference call. The company responded that when they gave guidance they were only two months into the quarter and there was a slowdown in the final month. They also stated that a related party transaction between the company’s subsidiaries had an impact on results. (more…)

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