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LeapFrog Enterprises Inc. Message Board

  • thompkinsjkat thompkinsjkat Feb 8, 2013 5:52 PM Flag

    confidence in LF warranted

    I currently own 12 small cap stocks, and I own as much LF as I do all the others combined. Most of
    the others are doing quite well while LF struggles in the face of an impeccable earnings report and
    forward guidance. Still, I have more confidence in LF than any of the others. Many on this board
    have been speculating on how LF could fall in the face of such a stellar report. I for one really don't
    know, though it certainly wouldn't be inconsistent with short manipulation. I was disappointed in
    the price drop after earnings, but I've added to my position twice since (both at prices higher than
    today's close.) As you can see my short-term timing isn't so good. However, LF's growth prospects
    and fundamentals are second to none, and its valuation is absurdly low: forward PEG below one
    and a forward PE of 7. All this for a company which has smashed its earnings estimates for at least
    8 quarters in a row. Stocks like this don't come along that often. I'm as sure as one can be
    about anything in the investing world that at some point this year LF will exceed $15 a share
    (perhaps by a lot), assuming it doesn't get bought out. I hope all longs will stay the course.

    Sentiment: Strong Buy

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    • and I've never seen a UNEXPEXTED pattern like the move in LF stock after BLOWOUT earnings! This is the largest position I've ever taken in one stock and to say I'm disappointed would be an UNDERSTATEMENT!
      I've watched LNKD explode after their earnings (which wern't anywhere near LF's great report) and that has only added salt to my wounds.
      I guess in my 25 years in the "Market" I've (learned or earned) NOTHING

      Sentiment: Strong Buy

    • A nice thought but the irrational performance of this stock makes me wonder if we are all missing something??? Simply on the short interest, it should have traded to 12+ based on earnings..don't you think?

      • 2 Replies to stockcritic
      • @ s_critic:
        Agree completely movement is irrational with respect to all the information available to us. I don't think manipulation is just the cry of the frustrated. Hedge funds have only monthly reporting and not so much oversight. Top 10 hedge funds for LF (source insidermonkey) hold 8.4 million LF shares. If a few hedge funds - e.g. some douches who went to business school together - decide to work together, they can do some of this stuff on a scale that gives you LF - enough to mess with retail investors' heads and create enough momentum that they can buy back lower. Some positive press articles starting to come out. Lots of reasonable institutions with tons of shares not engaged in the shadier stuff. The LF insider Rissman bought 50,000 shares in the low $8 range in November. You gotta believe he's tuned into this price action that had us below his buy in price... as low as $8.16 on Wednesday after a complete blowout quarter. They are fighting the same frustrations we are here on the message board. The best case for shorting the stock is like Uncletizz on this board says... that their products are 1-hit-wonders.. but with so much evidence to the contrary that is a RISKY bit. With so many more compelling short cases on the market, it doesn't make sense to pursue LF. But anyone who was short has an incentive to escape, and anyone who wants to establish a long position has an incentive to accumulate at the lowest price possible... so there is plenty of reason to drive the price down. Imagine YOU could dial the price down yourself in order to buy, knowing the stock was good. Imagine you knew a couple guys running hedge funds. Imagine you were playing with other peoples' money. Well it would be tempting. And hedge fund managers don't have impressive returns as it is and live in the financial white collar world... not the best guys at resisting temptation.

        Sentiment: Strong Buy

      • One would have thought that it would have traded sharply higher, and its always a possibility that we're missing something, but based on all the available data it seems improbable. The
        shorts may have been able to have orchestrated a coordinated manipulation, though I think
        this is unlikely. Perhaps not enough shorts were disposed to cover based on just one
        earnings report, believing that the stock will eventually fall much further. Again, I think
        they're wrong and that LF will soon prove to be an outstanding investment.

        Sentiment: Strong Buy

    • Excellent post!

    • Spot on.

      Sentiment: Strong Buy

0.9481+0.0258(+2.80%)Aug 31 4:02 PMEDT