Several times I have decided to get out of ANLT,
only to change my mind. ANLT looks extremely good,
especially in comparison to many of high flying stocks. But
it hasn't moved as of late. Its chart is all over
the place, and if the past is a good guide, it should
move up into the upper 30s or low 40s when it finally
decides to move. ANLT's main problem is liquidity. The
large institutions need liquidity and ANLT has such a
small float, it doesn't provide such. If the company
could some how get more shares out to the public,
without hurting the price, it would be good for the
stock pick on the internet. Definately worth checking
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Nomadic, I'm glad that we ultimately came to the
same decision as to the excellent prospects for ANLT.
But I'm curious as to how you assigned the basis pts.
you used in your valuation. Are they subjective on
your part, or is there a more objective way you arived
TIA - K.
>>As to the Wall St. issues that you have
referred to - what specifically are you unhappy with? I
guess I don't see mgmt. falling short in this area. To
make that a prime focus beyond which is prudent
becomes stock promoting and hyping. I would rather see
mgmt. act in the best long-term interest of the co. and
their shareholders, not for the
They shouldn't preoccupy themselves with it but whence
you avail yourselves to being a public company you
have to manage the IR image. I think what I would like
to see is ANLT to be more consistant with deflating
investor expectations as and when appropriate so that the
shorts aren't given the opportunity to play as extreme a
game as they have been able to in the past. If
disclosure was done with an eye to take some of the
volatility out of the stock I think the longs would be
Mind you this isn't MSFT. It is a little itty
bitty company which could have alot more stablizing
effect on its stock than we are seeing.
As far as
the money makers in the stock you aren't going to
change them....the only way to avoid that is to get big
enough to become a NYSE issue.
I believe cash flow is King. I've believed that
since last summer. I believe the cash flow war is over
and the walking dead are about to be
Your cash flow work is the only emperical info
available and everyone interested in ANLT should memorize
I have to agree. I was upset by the secondary.
When it started to affect the stock price I posted
vehemently that they should cancel the secondary. A week or
two later they postponed it and later cancelled it.
By this action I knew they did care about
shareholder value, which is critically important to their
industry consolidation strategy
They really did muff the secondary. Had they announced
in Feb 1998 they would have gotten it off at a price
around 30 I would imagine, which would be just great.
One of the stocks I own, UTI, pulled off a splendid
secondary right in the middle of a huge runup in 1997. As a
result they were cash rich in the subsequent collapse in
oil prices and could pick up assets cheap.
ANLT has negative cash flow because is has large
DSO (i.e. large unbilled revenues) and because it has
large A/R. When I refer to the "cash flow problem" I am
referring to all of these.
Now this sort of
fluctuation in cash flow is a normal part of business--see my
But, ANLT management called attention to it when they
announced they were going to issue a secondary, and
mentioned one of the things they wanted to do was *pay down
debt* The question arises, why a secondary now, and
not, say, in 1997, when cash flow was strong? Could it
be they are in trouble and are going to need the
money (i.e. cash flow will be negative for a long time
and they worry about getting additional
Thanks to Nomadic and TLWatson for completing this last
piece of the short puzzle in my mind.
I have spoken before to many of you about what a
good IR is vs. what a bad IR is. I have given you
examples of the IR departments that are ahead of the game.
But as it is not often that I get in front of this
large a group of opinionmakers, I want to stress a few
points. The IR's job is to know who is doing the buying
and who is doing the selling, especially impact
buying and selling. It is important for the IR to know
who we are, the buyers and sellers, know us by name,
woo us even, as a politician woos a constituency.
Don't hesitate to ask us, ask large accounts, what your
company should be doing more of, to get the story out.
And make sure you have our home numbers and our
emails so you can get a hold of us in an emergency or on
weekends so we are not blindsided by sudden conference
calls that we must scramble to get on.
envy you now. You have the electronic constituency and
the institutional constituency and the corporate
constituency and they all need your attention. But never
forget the real constituency, which is to get the truth
out, even in a painful way, so your company is viewed
as being on the level no matter what. That's the
true price-earnings multiple expansion that an IR can
create. I think this is such an important task, and I
think it can be performed so terribly and to the
detriment of your own enterprise that I spent a good deal
of time last year working with Kurt Andersen, writer
of the current bestseller, Turn of the Century, to
depict the role of the irresponsible IR, the one who can
really kill the enterprise. I felt so strongly about
this, about letting you see a book where the IR is the
chief villain, Henry Saddler, the IR of the fictional
Mose Broadcasting, that I had Random House ship a
hundred Turn of the Century novels down here. They are
outside in the hall, and it is strictly first come, first
served. Read it and ask yourselves, have you ever pulled
a Hank Saddler? If you have, it is not too late to
change your ways before you go to IR hell!
are bizarre times. Only you can help us understand
why a stock is doing what it is doing, in a world
where stocks have replaced baseball, football and
basketball as the pastime of choice. You are both in the
booth and on the field. You are calling the game. Don't
let us down and help yourselves and your company.
This middleman cut out, still one more middleman
pole-axed by the Net, is vital for you to understand. You
can tell your story without the analysts now, as not
many investors trust them anyway. You can tell the
story by taking ads out on the Web and by soliciting
the opinionmakers on the Web. Those who read stories
on the Web are now the marginal buyers of your
stock, not the institutions themselves. These are the
people who decide where your stock opens and closes,
especially the newer companies. The whole lesson of this new
era, this one that started when online trading got to
be so cheap that people started dumping their
full-service brokers and doing it themselves, is that there is
no middleman between you and the buyers and sellers.
It is just you and them. How you manage the stock is
how you interact with these new buyers and sellers.
If you ignore them, they will go elsewhere. If you
cater to them, they will buy your stock. You must
appeal directly to them.
That means a whole new
world of dissemination. For starters, how many of you
put your conference calls on the Net? I want to see
some hands. Those of you who don't, you will be
targeted by the SEC before this year is over -- I am
convinced of it. If you do not open those conference calls
up to all, at least on a listen-only mode, you will
run smack into Arthur Levitt's campaign against
selective disclosure. Levitt doesn't want any institution,
buy or sell, to have a leg up on the individual. If
your lawyers aren't telling you this, they haven't
been doing their jobs. Conference calls should be open
to all. Now! As of the second quarter, in four
Second, do you put your releases out
first on the Net? Or do you still send those faxes out
to a select few? That's also wrong. You have to use
the Net if you want to disseminate the news in a full
and fair way. Third, you think the story isn't being
told well? Advertise on the Net. Don't advertise in
some monthly magazine with a deadline for copy that's
months before the audience reads it. That's why I
stopped writing for the monthlies: They are totally
irrelevant when it comes to investing and will not even
exist three years from now if I have something to do
with it, and believe me I do. Don't waste your
precious IR ad dollars on those losers, especially when
they don't link you to a trading room. You can click
on the bottom of a page of SmartMoney magazine,
which I helped found, and wonder of wonders, it doesn't
take you anywhere! But you can press a button on the
Web, and you have one-click shopping just like Amazon
(AMZN:Nasdaq). Or you can place a banner that allows your whole
story to be told in a Web page. Accept that Web is the
way of the future as the investors and traders will
no longer be happy reading articles three months
from now about your stock that were written yesterday
-- as I had to do for every monthly I have written
Fourth, demand that the sell-side
institutions that host periodic seasonal conferences for your
CEOs open those meetings to the Net and to Net
reporters. The dead-tree guys don't bother covering these
events, because, as I said earlier, they don't care about
stocks. But people on the Net live and breathe stocks.
Let these events be covered by the Net and you won't
run afoul of the selective disclosure rulings that
will soon be the law of the land.
matter what you do, don't go on the Internet message
boards. You can look; you can find out what the rumors
are. I think that is vital, as the message boards move
stocks, sometimes more powerfully than any other medium
right now. But right now the message boards are a place
of hype and hate, and if you go there, you will be
drawn in and you will regret it. Just be sure that no
one is pretending to be you or to work for your
company. Police the boards, but do not respond to them.
And don't let your CEO look at them. It is a brutal
waste of her time.