Tradeforyou....don't beat yourself up for UUU becoming the worst performing stock in your portfolio because we all got blindsided by a mangement team that chose not to keep their investors informed coupled with insider guidance that was not accurate.
It is one thing to have the facts and not make a good decision it is totally different when the facts are withheld and then you are given flawed projections. We trusted the UUU management team and learned a hard lesson. These guys have zero credibility in my book going forward.
>>I'm weary from following this stock. It's set me WAY back financially, and has caused me a lot of personal suffering.
I am with you on that. It astounds me that this has become the worst performing investment in the history of my portfolio, and I didn't even buy in during the top...
I, too, and going to hold and agree with your analysis that recent selling has been tax-loss selling + funds cleaning up their holdings.
What really disappoints me is that UUU can't exploit the Chinese market because they don't have regional licenses. It was very misleading to say that had exclusive rights in Chian - especially since another publicly traded US company had a stake in a Chinese smoke alarm manufacturer.
It's time for management to be more realistic. I don't feel comfortable with their analysis that housing starts won't drop below 1 million per annum. It's also unpardonable that they bought a Canadian Company that risked possible recurring losses if the CAD dollar strengthened (which it did). This risk was never mentioned in the 10Q's or Annual Report.
I'm weary from following this stock. It's set me WAY back financially, and has caused me a lot of personal suffering.
This matter concerns me as well. I personally heard that presentation and the statements about China were made: exclusive rights but no present ability to exploit them. I find it hard to believe that that was a lie. It is far more likely that the inability to exploit led to other licenses being granted and perhaps UUU's certification lapsed. When demand for the JVs products went down last quarter, the obvious question is why didn't that capacity go to China, if they had the rights to sell there? Maybe they no longer did.
There are a few posters who speak to Grossblatt. It would be very helpful both in terms of establishing credibility and understanding what the short and medium prospects are in China and Japan, if this matter was discussed with Grossblatt and his answer posted. I have previously written to the IR contact suggesting that UUU have conference calls (this was when things were going very well) and I never got a response, nor, of course, have there been any conference calls. Before the presentation, I thought that maybe Harvey wasn't a good speaker, but that is not the case. I have gotten very frustrated, but strongly believe that it is too late to sell, that much of the recent weakness is due to tax selling and a large fund holder who may have given up, but that ultimately the company's many years of success will again be duplicated once there is any turn in the housing market.
>>At the Lambert Edwards conference last year they said they were the only licensed company to sell smoke alarms in China. Turns out they did not have the regional licenses that are necessary AND!! They AREN'T!! the only licensed company to sell smoke alarms in CHINA! UTX's United Fire and Security Company has a 33% stake in a Fire and Security company in China. Shame on management for providing investors with false information.
I find it very concerning if management did this. If what you say is true that means they are lying to shareholders. It is better to have inept (fixable) management than dishonest (RUN!) management.
Stocktries, you know me from some of the other common message boards we share. I took all of my initial investment off the table between $25 and $30 and left the profits invested (I follow this practice with the majority of my investments. I like to play with the house's money). With hindsight, I foolishly overruled what my gut feeling was telling me and I trusted management's August guidance for the September 2007 quarter which seemed to support EPS in the range of $0.35 to $0.40 per share (assuming the management forecasted turnaround to breakeven for Canada). Placing my faith in UUU management has cost me approx. $100K in opportunity lost.
The fact that they are not putting their own money in additional UUU shares and they are not furnishing any information to the shareholders or investment community tells me (again, per my gut feeling) another shoe will fall when they disclose the Q/E December 2007 earnings.
My advice to you before was wait until after the next earnings release. I see no reason to change that approach.
Bean and Carrol, if you guys keep posting like this you are going to make me reconsider buying in on the next upcomming significant drop. The more I read, the more I agree with your concerns about being asleep at the wheel and it makes me think, heck why not wait until next earnings to see how things shape up.
Thanks for the posts.
My point all along has been that once they learned that the Canadian operation was going to have a significant loss in the September 2007 quarter they should have filed an 8-K dislosing that their previously furnished guidance of breakeven was going to be materially missed.
I would be amazed if they don't perform some form of monthly closings in Canada. Even if they don't cross each T and dot each I they should have seen after October or even at the latest, after November that they had a significant miss.
Looking at the quarter-end closing cycle, certainly within a week after quarter-end they should have known about the significant Canadian loss versus the predicted breakeven. Why didn't they issue an 8-K then? Instead over six weeks after quarter-end the investors' and investment community learn about Canada's disastrous performance via an earnings release and the submitted September quarter 10-Q. I simply can't explain or support the way UUU senior management handled this fiasco. You just have to question whether or not they are asleep at the wheel.
Shareholders must initially approve an overall specific stock option plan but once approved the issuance of the number of options to the respective individuals, the timing of the issuance of those options and the basis used to justify the issued options needs only Board of Director approval. Usually the stock option plan approved by shareholders establishes the total stock options for future issuance and the general time frame for issuance, for example over a 2 to 5 year period.
My concern is that smoke alarms and carbon monoxide alarms are not necessarily a high-tech item they are a commodity item competing on price and generally the low cost producer has a distinct advantage over time. I'm am not sure UUU can make claims to being the low cost producer.
To me these guys have a truly flawed business strategy in an environment of poor housing, a strong Canadian dollar and potentially declining U. S. dollar on a going forward basis.
But then again, maybe they should take the time to inform us why their strategy will eventually succeed.