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…)

Great Calls on Oil

By: admin | Date posted: 08.16.2008 (4:02 pm)

I have written quite a few articles about the speculation in oil over the last few months and I want to revisit some of those articles because I have been proven correct.

First, there can no longer be a debate about whether the excessive rise in oil futures was due to speculation or supply and demand fundamentals. It was obviously due to speculation. In fact, the last thing oil was trading on during its run was supply and demand.

Oil was trading based on the falling dollar, potential supply disruptions in Nigeria and Iran, and self-serving bullish calls (actually flat our pumping) from Morgan Stanley and Goldman Sachs (their hedge funds were long oil). When oil was making its run towards $150 traders were completely ignoring supply and demand fundamentals because demand destruction had been evident for a few months. (more…)

AgFeed Releases Q2 Results

By: admin | Date posted: 08.11.2008 (2:27 pm)

FEED – AgFeed Industries (NASDAQ) – (Closing Price – $12.77)

AgFeed Industries reported second quarter results today and reported excellent numbers. The company also raised its already impressive full year guidance.

AgFeed reported revenue of 35.6 million and diluted EPS (earnings per share) of 0.12. Revenue improved by over 400% YOY (year over year) and 193% sequentially. Diluted EPS doubled YOY and quadrupled from the previous quarter. AgFeed raised its full year revenue guidance from 135 million to a range of 145 – 155 million and raised its adjusted net EPS guidance from $0.96 – $1.10 to $1.08 – $1.20. The company mentioned the second half of the year traditionally represents its two strongest quarters.

AgFeed opened the day up over 19% from the previous close but finished the day with a gain of only 2%. I attribute this decline to day traders who were looking to sell after earnings regardless of results. I think the stock price will start to trend up after the short term traders exit their positions.

AgFeed just reported very impressive results and the company is coming into its strongest two quarters so I see no reason to sell. I would continue to hold your shares.

Disclaimer: I have no position in FEED.

8×8 Q1 09 Results

By: admin | Date posted: 08.10.2008 (3:45 pm)

EGHT – 8×8 Inc. (NASDAQ) – (Closing Price on Friday 8/8/08 – $1.09)  

8×8 reported first quarter results for 2009 on July 31 and reported moderate results.

8×8 came in with revenue of 16.28 million and diluted EPS (earnings per share) of 0.02. Revenue was up 10% year over year but was essentially flat from the prior quarter. In the conference call it was mentioned that licensing revenue was impacted by licensing deals that were pushed into Q2. Diluted EPS increased by a penny both year over year and sequentially.

8×8 announced it added 1053 new business customers and that business service revenue grew to 56% of total revenue compared to just 44% last year. Business revenue continues to grow which is offsetting the decline in residential and video revenue. (more…)

SILC Q2 08 Results

By: admin | Date posted: 08.06.2008 (9:53 pm)

SILC – Silicom Limited (NASDAQ) – (Closing Price – $5.82)

Silicom Limited reported Q2 results on July 28 and reported very disappointing results.

The company reported revenue of 5.17 million and diluted EPS of 0.05. Revenue was down 22% year over year and down 33% from the prior quarter. EPS was also down substantially from 0.25 last year and 0.26 in the prior quarter.

The weak quarter was blamed on the decline in the shekel/dollar exchange rate, the difficult market environment, and a significant reduction in orders from Silicom’s largest customer.

The CEO did voice some optimism by stating that one customer intends to make Silicom’s BYPASS cards a standard rather than an optional feature and that discussions have nearly concluded with several new accounts.

The stock price took a big dive after earnings were announced but has currently found support. Silicom’s stock price is trading below book value so I don’t see much, if any, downside left.

I think a lot of the weakness with tech stocks in general is cautious spending by companies due to the uncertain economic climate. I think economic conditions will start to improve in the coming quarters so I think it would be unwise to sell Silicom at the current price. I am going to recommend to continue to hold.

Disclaimer: I currently own shares in SILC.

More on this topic (What's this?)
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SILC (Samurai Trader, 8/16/10)
Read more on Silicom at Wikinvest