I'm not real pleased with self-dealing w/o any explanation. This is what I figure.
Sunburst showed before-tax earnings of $514K in the recently completed year, or 6.5% of the total. They do not specify the impact on net income so I will assume that net income will be reduced by 6.5% as a result of the sale.
As a result EPS should rise from $1.26 to $1.34.
The announcement mentioned a 600K writedown from the sale and a sale price of $3M, so I conclude that the book value of Sunburst was 3.6M. They also spent 3.255M to purchase shares. All told this represents a decrease in shareholder value from 37.61M to 30.75M which was acompanied by a decrease in outstanding shares from 4.162M to 3.682M. Book value per share then decreased from $9.04 to $8.35, a decrease of $0.69. The net result was the company "spent" 69 cents of shareholder equity to purchase 8 cents of additional income--roughly a multiple of 8.5. This multiple is slightly lower than the stock's pre-transaction multiple, so I conclude that it is (very) slightly accretive.
We did not get overtly ripped off. On the other hand, the company sold the asset for less than was paid for it. I recall when the company was buying the components of Sunburst. Supposedly electronic manufacturing was a promising new area for the company. Now it has been sold to an insider for less than was paid for it. Not only that but this insider was able to sell a large chunk of shares at above-market prices. This stock is so thinly traded it simply would not be possible to sell 250K shares at anything approaching its present trading level.
I've owned this stock for nearly six unhappy years. This is the first time I've seen anything this management has done which wasn't completely above board.
I haven't stopped by here in ages and I saw an old name. What a coincidence!
I'm one of those that got crushed over 1998-2000. As a result of ANLT I no longer invest in individual stocks and no longer bother doing any company research. Its a waste of time, what does it mean when you can't trust the numbers? As you can see, I have no trust left in business executives.
I do index investing using ETFs or sometimes I buy a little portfolio of 3-4 stocks in a sector as one position. Positions are limited to less than 5%.
I've gradually increased by stock positions over the decline reaching 80% last July. I could have bought more on Oct 9, but was occuppied and wasn't watching the market so I didn't get any (I have a strict system I don't deviate). I figured the next day, man, that was probably the bottom, but had I bought anything then (and violate my system) then surely it would have gone down further.
Of course we could still dive this fall (that's what the last 20% is for). But I'll be perfectly happy if we don't and instead go straight back up from here :)
I am *so* sick of bear market.
I still check from time to time. I wasn't in the class so I got no money back :( After peaking in summer 1998 my taxable portfolio fell about 60% by Spring 2000 (ANLT wasn't the only stock with bad accounting I owned) and has been slowly rising since then due to savings. It is now at about 80% of its 1998 peak. Assuming no gain/loss in my current positions I should be back to the 1998 highs by the end of next year.
Of course my 401K has been fully funded all this time and suffered no ANLT loss (I got out of stock funds in '99 and have gradually come back in, reaching 80% invested on July 19).
Since we entered a secular bear market in 2000, capital gains from longer-term investments are going to be limited and it will probably take a decade to work off the ANLT losses, so I have tax-free capital gains going forward. I have held on to most of my ANLT shares and will sell them as I need losses. Of course dividends and interest (the bulk of my returns) will be taxed.
What a ride. I bought this stock in Dec 1999 at 15. I never, ever thought it would double. I had to sell it at 30 despite the fat dividend. Wow.
I bought stock in ANLT and a bunch of other small caps in 1997 and 1998. I did so because I forecast that the 1982-2000 secular bull market was likely going to end in 1999 and I wanted to learn how to "stock pick" since paaaively held indexes were no longer going to be profitable for the long-term investor after the bull market ended in ~1999 (see my 2000 book Stock Cycles--now avaiable in Barnes and Noble superstores nationwide).
My research (this is not in the book) showed me that small caps, unlike large caps, do not show the secular market effect and so I should concentrate on learning this sector. Hence some 40% of my stock assets were in this sector. Well half of my small cap assets performed well as companies, but have shown no significant gains since then so thay have been dead money. I've sold about half at small profits and the rest I still own. The other half were run by incompetents or crooks like ANLT (ANLT made up 3/4's of this portion) and I lost most of my money (almost all of it in the case of ANLT--which I still have shares in).
Anyways with the new investment ANLT will probably not go bankrupt and so I can sell my shares anytime in the future for losses whenever I need them. ANLT will provide an inexhaustible supply of losses, they would last 70 years under the current tax laws unless I obtain offsetting gains in the future.
The lesson I learned from ANLT was don't have an unrealistic view of what is possible. Back in 1997 I was looking to make a 15% for 7 years which would then allow me tor retire in 2004 at age 45. At that time I was perfectly aware that I could easily, passively, earn this sort of a return for two years by simply buying an S&P500 index fund, riding it up to 1999 and then exiting to a money market. Doing so would not allow me to achieve my goal of retiring at 45 since money markets give such poor returns compared to my 15% goal. So instead I invested in stocks, including, unfortunately, ANLT.
By June 1998 I was doing great, I had loaded up on tons of ANLT during the March-April swoon in ANLT at an average price of 29 and it was now back in the mid-30's and going up. All my other stocks showed gains and globally I was getting a 16% return. My net worth peaked that summer, and only in 2001 did I finally move above that level.
The whole idea of getting a 15% return now seems hopelessly naive. My goal is now to strive mightily to produce a 4% real return over the next 15-20 years (about 6-7% at present inflation rates). With this goal I can retire in 2009, at 50. Had I had this more reasonable goal in mind back in 1997 and 1998 I would never have bothered investing in stocks like ANLT and I would be considerably ahead of the game.
ANLT looked like it could produce a 20-30% return with ease. Since I was expecting 15% globally (and ANLT looked great in the 10 years of financial reports I studied) this sort of expectation did not seem to be unreasonable. Of course it IS unreasonable. In the real world stocks like ANLT that look like sure winners can all too often be catastrophic losers. Since even insiders like Miller and Thorpe couldn't see this train wreck coming how could an outsider like me see it, no matter how carefully I studied the financials? I couldn't. After the wreck it became clear that this company has NEVER earned a profit since its founding in 1982. How can a company be in business for 18 years, never earn a profit, yet THINK (and report) that they are doing so the whole time. I still don't understand exactly how this can happen, but happen it did.
Dollar cost averaging (DCA) works best with highly volatile stocks/funds *not* index funds. Also when one already has a large portfolio, investing an additional few percent per year on a DCA basis isn't going to help much. A better strategy is to sell off your stocks towards the end of a secular bull market (e.g. 1999 or early 2000) and then DCA back into the declining market.
For example I use this strategy in my 401K using the American Century Ultra fund (TWCUX) which is the most volatile fund of the six featured in my 401K. Believing the secular bull market was over, (see http://csf.colorado.edu/authors/Alexander.Mike/Stanpor3a.html) I moved to 100% cash on 3 Sept 1999 when the fund was at ~33. Since then it rose to 45, fell to 25 and is now at 30 (it *is* volatile). I started DCA on Oct 12 2000 buying in 10% aliquots at 34.6, 32.1, 30.6, 28.7 and 25.7 (Instead of a fixed time interval for DCA I use an approximately fixed price drop interval for DCA). It stopped going down so I stopped DCA. If it resumes going down and falls below is April 4 bottom of 24.95 I'll start up DCA again. If it decides to go up instead I'll start "dollar cost selling" at around 35. Right now its at ~30 so I'm doing dollar cost nothing.
Since the stock market goes nowhere during secular bear markets one always has another chance to DCA *into* the market during big drops (like the one we just had). During a secular bull market (e.g. 1982-2000) this is *not* true, very often a level will be reached during a bull move that if you don't buy *right then* you never will. A fully invested buy&hold posture is recommended during these times. But those days are over, and so now good 'ol DCA (at low prices) is the best strategy for the passive 401K investor who can't trade worth beans (i.e. somebody like me!).
Looks like this stock has started to move up. Anyone here recently buy it? The last time this stock moved up was in Nov 1998, if memory serves. There was a symbol mixup and people bought this stock thinking it was something else. This doesn't seem to be the case now.
If so, it is possible we may see a rally. I'd like to see some more volume though.
I bought HCN when it was paying a little more
than 15%. Having been burned before by
overconcentrating I don't what to do that again. HCN makes up about
6-7% of my portfolio, which is the most I ever want to
have in one stock, now matter how safe it might be. I
wouldn't mind a portfolio stuffed full of REITs paying
Can the folks here provide a list of REITs of
equivalent or better quality than HCN that paid 15% yields
at their 12 month lows? I know HR was one, which I
tried to buy, but just missed it. Are there any others
you know of?
I bought this stock because it was a steady 20%
grower. It was earning around $3 a share when I bought
it. After I bought the stock, the earnings kept right
on growing at 20% for 2 1/2 years now. Now it has
about $5 in earnings, about a 70% increase, yet I'm
Yahoo is down 80%, has no debt and is profitable.
Amazon is down 81%, is deep in debt and has never made a
cent. There was a time when AMZN and YHOO were both
buys based on their relative strengh, but that time is
over. Why should anyone buy AMZN 80% down when they can
buy YHOO 80% down?
It seems to me the
principal reason for holding is the possibility of a bounce
back. But if you sell AMZN and buy YHOO, you will have
the same potential for a technically-driven
bounceback (both are down almost the same) yet you will own
a company that at least is solvent.
as part of a large collection of similarly
depressed stocks. It is not 100% guaranteed that it will go
bankrupt. It probably will. But what will happen if it
doesn't? Then it will probably go up several fold in
To illustrate suppose there is a 70% chance of
losing 100% and a 30% chance of a 5-fold increase within
a five year period. Faced with such odds nobody
would buy this stock, the risk:reward ratio is too bad.
But suppose you bought equal value of stocks in 100
companies with the same prospects. 70 of them go bankrupt,
30 of which go up 5-fold within five years (2.5
years on average). Total annual return on such an
investment would be 17%, not too shabby.
this is really hard to do. I doubt few (if any) of the
buyers are doing this. Since there *are* buyers, and
only a fool would trust these guys, I interpret the
market as saying that the odds of bankruptcy are less
than 70%, or the potential gain if ANLT does not go
bankrupt more than 5-fold.
I say your note in May 1998 about the price getting interesting. Did you buy then? I bought way too early at 14 and have been underwater for years now.
Benger and Sage didn't sell a million dollars of
stock in a failing company while the price was high.
Thorpe and Miller did sell but they were not involved in
the active management of the company at the time and
would not be privy to the real facts.
Corder both sold and knew (or should have known) about
the new competition that was eating ANLT's lunch.
Only he may be guilty of illegal insider trading.
Time to go to sleep for a looong time for ANLT
investors. Looks like the stock is worth about 6 bucks.
Looks like the market agrees. Doesn't look like they
are going out of business. Does look like dead money
for several years.
To those of you who say
that one should get out of dead money. I say why? So I
can put the remnant of my cash into another ANLT and
lose that too?
Many of the hot stocks today
B2B, biotech, net infrastructure etc. are ANLTs. Back
in 1997 ANLT rated a P/E above CSCO, which was
justfied by an earnings growth track record over the prior
ten years that had beat CSCO, MSFT INTC and tied
DELL. Had the market conditions of today existed in
1997-8, ANLT would have seen a peak price of 200. Look
where it is now. The same thing can (and probably will)
happen to all of those other hot stocks.
question with ANLT is how much of the low stock price is
due to poor communication and how much to poor
prospects. The market-savviness of this companies management
has always been lacking. And as for communications,
the current CEO ran MSE as a private outfit. It is a
reasonable bet that a lot of the stocks low price is due to
this poor communication.
But this is good
news. If the company recovers and starts back on the
growth path, the market will figure it out regardless of
what the management communicates, just as the market
figured out about the accounting mishaps long before
Capital losses can only be used to offset $3000
of ordinary income. You can't use them to offset
Selling any stock at a loss has
no tax benefits for me whatsoever, I have losses
enough for the forseeable future. Since most here are
likely value-orientated and value has done terribly of
late, I am sure many of us have all the losses we need.