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Omeros Corporation Message Board

neil_willoughby 30 posts  |  Last Activity: May 1, 2014 4:58 PM Member since: Mar 1, 2009
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  • neil_willoughby neil_willoughby May 1, 2014 4:58 PM Flag

    Sorry to hear you couldn't exit LIWA in time. I must say I'm not a day trader at all, more of a value, buy-and-hold type of investor. But, the stop and stop limit features I used through my online brokerage account to automatically trigger the sale of my shares saved me on this one. I highly recommend these in the future if you find yourself with high-risk holdings. In my case, I was reading all LIWA posts and with the big decline the day before, examining the posts in detail. Once I found the posting about the chinese article, I was scared...so I decided to put stop limits in for the next day. But I was still uncomfortable so I changed them to outright stops because I thought there could be a massive dump at opening. I was right: the stops triggered 1 minute after the opening bell and saved my you-know-what.

  • neil_willoughby neil_willoughby Apr 30, 2014 12:47 PM Flag

    Shocking. Really disappointed - I thought this was arguably the best value/growth pick on the NASDAQ. Was tracking the board closely since my post reading many of Elapsojet's messages.

    I didn't think it was fraudulent and it may not be, but the one ingredient I overlooked (and knew it too when I purchased) was quality of management. Husband and wife at the top, chinese RTO, you coudl sell just on the basis of how this company doesn't communicate. It won't go far even if it did hit some numbers for a few months....I got hynotized by the value stats on the company and rationalized away the human element of management. Anyway, lingering thought since my post was as soon as Lihua hits turbulence, you may see some weird events that a normal management team wouldn't run into. I didn't think it would happen so fast!

    I sold my positions. From the messages yesterday,especially Elapsojet, I put in stop orders that triggered first thing this AM and exited my entire position across all accounts so I avoided a major loss. But still...wow. Can't believe it.

    Sold all my chinese RTO's as well. No point holding on to great "value" plays if management depth isn't there.

    if you're still holding, good luck to all!

  • neil_willoughby neil_willoughby Apr 20, 2014 2:44 PM Flag

    On his explanation of smelters and dust collector delays, I'm not surprised. It's the Chinese government. Zhu needs to make sure he's compliant. China is communist, so not the same property rights that the USA has. No recourse if the government mandates that you fix something. Air pollution and environment is a hot topic in Beijing right now, I've seen news stories here on pollution and it's unbelievable (i.e. disgusting). Likely the Chinese regulators delaying things, making sure LIWA facilities are compliant with local and provincial laws.

    On Zhu's cash mountain on the balance sheet, Zhu can do one of 6 things:

    1) Upgrade the equipment to lower cost of production and increase margins.
    2) Add to capacity by building another smelter or another special production line.
    3) Make an acquisition and buy a competitor.
    4) Pay shareholders a dividend.
    5) Buyback LIWA shares on open market, retire the shares to treasury and reduce the LIWA share count outstanding.
    6) Invest the money and earn a return.

    Oh, there is 7:. He could also be an idiot and let it sit there doing nothing. But I think he's more talented than that!

    From above:
    1) Equipment is new, so Zhu is likely only doing what the government demands here.
    2) Bingo. This is most likely...Zhu says CCA wire is the future.
    3) Doubtful. He's been busy building, not shopping. Zhu won't tell anyway because it's illegal to disclose mergers until they are done.
    4) Zhu did dividends in the past, but he's not doing it lately, probably because of cash needs for #2. (also proves he's not a total idiot!)
    5) Not sure he's doing this - it boosts the share price and gives him more proportional control however.
    6) the CFO would likely be doing this on short term instruments.

    I'm not selling - too interesting to see how LIWA does in the days to come...

  • neil_willoughby neil_willoughby Apr 20, 2014 2:32 PM Flag

    Hi Elpasojet...Interesting post. For me, I don't worry about take-overs. My feeling is that when a business is priced so cheaply, it's always a takeover target from a larger player with more capital. I've purchased shares at deep discounts in the past and often times a takeover announcement comes shortly after. It's an instant gift...provided you bought the shares at a deep discount! Remember a friendly takeover would be something that Zhu discussed and recommends to shareholders whereas a "hostile" takeover is one where the offer goes to shareholders despite Zhu's resistance. However, both are voted on and in my view, both would be much higher than today's price. Doesn't Zhu own a large enough number of shares that he can block any takeover? I think he does, but I'm not sure.

  • neil_willoughby neil_willoughby Apr 19, 2014 5:37 PM Flag

    I think LIWA has several challenges. Elpasojet is correct - CEO and COO are married. That makes this a family type of business. A mom-and-pop shop. The CEO will never fire the COO for bad results now, will he? It also changes the dynamic for the employees working there, especially if the business, or the marriage, goes wrong. Having said that, maybe they can operate the business effectively, but I would never go "all in" with a husband and wife team at the top.

    LIWA listed on the NASDAQ as a reverse take over several years ago. The problem however was that some RTO's were complete frauds and went belly up leaving investors with absolutely nothing. The US securities and exchange commission issued a warning to the public about Chinese RTO's. As a result, many investors will not invest in any RTO and avoid the class altogether. LIWA has addressed this however - they have secured good auditors to review their numbers and they abide by all reporting rules. If LIWA were fraudulent, we would know by now. Another factor that lays this to rest, is their market cap size - about 150M and growing. It's easier to hide money when you are a small company. Not so easy at 150M, with NASDAQ requirements, accounting auditors signing off on your results, all while the SEC issued a warning that everyone knows about. Bottom line for me: LIWA is a real company.

    LIWA's numbers are almost...too good. The old saying "when something is too good to be true....it probably is!" applies to LIWA in the minds of some investors. But I say.....they're in the copper business in China, China is and will be a huge economy and as it grows, so do LIWA's numbers.

    Lastly, Chinese economic news, copper prices in general and US investor attitudes toward those make LIWA volatile. Lately, the news is that China's growth is decelerating. Also, copper prices have sold off. Short term traders sold LIWA on this news. China growing at 7%?! I'll buy that! If your focus is long term like mine, LIWA could payoff

  • Pros:
    =====
    1) Earnings yield: 26%, based on todays price per share
    2) No debt - cannot go bankrupt
    3) Respectable EPS for the last 6 years - profits every year and rising mostly

    2008: $0.7
    2009: $0.72
    2010: $1.34
    2011: $1.77
    2012: $1.93
    2013: $1.87
    6 year average: $1.29 EPS

    4) Nice rising equity every year
    5) Macro economic strong for China in general. Copper should be in demand.
    6) Stable predictable business, good tangible assets, awesome discount to book value (!)

    Cons:
    =====
    1) Gross margins declining for 5 straight years. This is likely why the price per share is suffering (why are margins deteriorating - anyone?)
    2008: 33.6%
    2009: 22.4%
    2010: 16.8%
    2011: 11.9%
    2012: 10.5%
    2013: 9.5%

    2) Zhu is terrible at communicating with shareholders.
    3) Chinese RTO - perceived as risky along with other Chinese RTO
    4) Capacity of business limits upside for future
    5) No strong patents yet, competitive advantages a little unclear

    Possible catalysts to upside:
    ====
    1) Institutional investors buy the stock and bid it up to fair P/E levels
    2) Zhu takes it private or moves it to another exchange, with a good buyout offer to present shareholders
    3) Chinese economy surprises to upside and copper price spikes, creating demand for LIWA's lower priced alternative products.
    4) LIWA gets acquired at premium
    5) US investors once again favor Chinese stocks, leading to a return of the frenzied buying of 2004 and 2005.

    Possible threats:
    =====
    1) Chinese government restricts operation somehow, possible through land rights or environmental permitting.
    2) Zhu, while already a terrible communicator with shareholders, mis-executes with the business creating more problems.
    3) If Zhu is married to COO, then business is a mom and pop shop. Amateur results moving forward. (any info on this?)
    4) China drops into recession

    Buy and hold, it's worth the risk. Let LIWA continue to produce for you year after year. it's China! Zhu is a Chinese operator not a slick USA style CEO. Stay on the bid!

  • Reply to

    Earnings should be great!

    by safegain99 Aug 5, 2013 3:32 PM
    neil_willoughby neil_willoughby Aug 6, 2013 3:37 PM Flag

    Even without a great earnings report in the short term, SORL has great prospects. It operates in a very predictable business (automotive parts), in a Chinese macro environment that will grow around 6-7% (conservatively) for years to come. Decent R&D budget for new products and you're picking up a slice of this for less than half of its book value. Very little debt, so no bankruptcy threat. Pitroski score is 8 out of 9 (very strong), Altman z score = 2.02 (also very good). Hard to find that combination of performance statistics.

    On the risk side, it's a Chinese RTO and things could go wrong, but the idea that ALL Chinese RTO's are scams doesn't make sense. Some are, but most are not in my opinion. SORL's a decent size at 65M. They have tangible inventory, it's car/truck parts - a very real business. If there were issues, they likely would've surfaced by now.

    SORL is a compelling business at these prices. Over time as the RTOs washout and the Chinese economy chugs along at 7% - SORL will report good earnings and investors will buy - sending the stock surging ahead to kind of shake off it's illogical valuation. Then it will just continue to grow along with Chinese economic engine which is decent in its own regard.

    I'm buying and holding for a few years. Be interesting to see what happens..

    Good luck to all!

  • neil_willoughby neil_willoughby May 10, 2013 2:55 PM Flag

    bye bye

  • The company has impressive properties and the management seems to be talented. However, I can't find anything specific on when these mines will start producing. So, it's great that they keep communicating their potential, but as a shareholder I need to know when these will startup...Seems like SSRI has mines that are just talked about. Does anyone have any info on when these 2 will be brought online? Perhaps there are problems with surrounding communities or the permitting process? Thanks!

    Sentiment: Buy

  • neil_willoughby by neil_willoughby Apr 13, 2013 11:40 PM Flag

    Nice marketing and PR guys. Great job.

  • So let me get this straight: A Chinese company importing luxury cars, growing revenues at over 100%, book value at less than 25%. No long term debt. Stock tripled from November. If I take ALL of their liabilities and subtract them from only their current assets, I'm left with $56 million. Because they have no long term debt, the common stock is free and clear.

    It's rare to get business opportunities like this. To me, the worst case is that management decides to take it private or relist on an Asian exchange. If they do this, they will borrow a few hundred million, and buy the shareholders out. You'll at least double your money from here because book value is so low. So you can't lose. (Unless of course, you let these shorts scare you into selling at these levels).

    To all the shorts, On November 6th, 2012 one week before earnings announcement, the stock shot up before retreating slightly over the next few days. Then, when they announced, it went nuclear and was NASDAQs biggest gainer for the day. four months later....the same thing seems to be happening. The stock shot up last week and was Nasdaq's biggest gainer - we're waiting for the announcement. Will it go nuclear again? We'll see soon enough.

    And remember: when you roll up in a Benz, doesn't matter which country you're in. Everyone understands and wants a hot car. Even in China...

  • Reply to

    Well done, Fred Purches.

    by drudow Jul 28, 2010 6:11 PM
    neil_willoughby neil_willoughby Jul 30, 2010 3:38 PM Flag

    I recently asked several companies I was interested in for their printed annual report. I asked them all at the same time and I wondered which company would be the first to send one. To my surprise, Parlux called me the next day to confirm that the 2009 annual report would be sent (not 2010 which wasn't out yet) and it arrived a couple of days letter.....along with Fred E. Purches business card paper clipped to it.

    I was impressed.

  • neil_willoughby by neil_willoughby Jul 24, 2010 10:13 AM Flag

    Been looking at Manulife recently and buying, but it does have risks. The main one that is causing downward pressure is Manulife's exposure to segrated funds in the equity markets. MFC in some instances has guaranteed returns to unit holders of certain equity products. If the market goes down, MFC and all its equity holdings take a hit as they honor their guarantees.

    Another risk is the market's reaction to their recent raising of capital. MFC cut their dividend and diluted their shares with a surprise equity offering which frustrated a lot of shareholders. Mutual fund managers have avoided MFC because they are unsure if this was because they simply wanted to position themselves conservatively with capital ratios that exceed competitors moving forward (as MFC management would have us believe) - or - they may actually need this capital as they reveal losses and write offs in the near future. Many Canadian portfolio managers avoid this stock because of the trend and the risks associated with potential more bad news to come.

    Manulife has some pluses however, which is why I bought some shares. As I see it, if the market does not double dip, then MFC is not in any trouble and their raising of capital, if not used to cover losses, positions them very well moving forward. They have a great brand and product in "Manulife One" in Canada (my employer uses Manulife group plan for insurance) and the John Hancock brand seems to do well in the States but I know less about it (Although I particularly like the sign in centrefield at Fenway Park). They have exciting growth prospects in Asia which cannot be discounted or overlooked. Finally, their valuation is spectacular if you are buying value at the moment. P/E ratio is under 7, Dividend yield is back up to around 3.5% with a payout ratio of a very reasonable 30%. Canadian banks are no longer a slam dunk, so MFCs price contrasts well when stacked up against the well known Canadian financial sector bank plays (Royal, TD, Scotia, BMO and CIBC). This past week, a well known value Canadian portfolio manager recommended MFC stock as a top pick.

    As the double dip threat subsides, so does the risk that MFC reveals large write offs associated with their guarantees on segrated funds. More value portfolio managers will start with buy recomendations (which is happening now), followed by mainstream and trend style managers. On a multi year strategy, buying over the next few months should pay off in my opinion. This next earnings call on August 5th will be the worst of the storm with blue skies to follow.

  • neil_willoughby by neil_willoughby Jul 21, 2010 2:43 PM Flag

    Held Nokia for 2 years on the long term strategy that they would be able to dominate the lower end phone market, particularly in emerging markets and they would have a decent shot at the smartphone market. In my opinion, they have already lost the smartphone battle. Also, because they have no smartphone brand, they will lose a lot of marketshare in their entry level phones as well.

    I question their medium and long terms sales in China as well. The Chinese consumer will gravitate to the HTC brand of phones just as Canadians gravitate to the Blackberry. That leaves Europe to make gains, but that economic zone is a disaster at the moment.

    Nokia's strategy of phone marketing has been to blanket the marketplace with dozens and dozens of phones for every need but again, this shows a lack of a cohesive marketing strategy. It's easy for competitors to pick off each phone with a better product. I actually updated my phone 3 weeks ago and decided to buy a Nokia, but honestly, I was left wondering what the heck they are doing...

    Their business network business provides some short term relief, but would not be surprised to see this flounder as well. Extremely competitive space with Nortel Networks announcing bankruptcy and the likes of Cysco Systems to contend with.

    The announcement of a new search for CEO was the clincher for me. This precedes tomorrows earnings announcements and signals that the results will be bad. Perhaps so bad that they have to show the market they are doing everything they can to rectify the situation once they reveal the lack of results. Yikes...

    Good luck to everyone, but I'm locking in a loss and reshuffling my portfolio!

  • Reply to

    10 Year Average EPS for PARL

    by neil_willoughby May 19, 2010 9:13 AM
    neil_willoughby neil_willoughby May 26, 2010 12:52 PM Flag

    Drudow - you're such a killjoy! I have a small position so I'm not worried, but if I invest any further, I better do some more homework. (you've got me all concerned now...)

    I see inventories and receivables make up $82M, based on Dec. '09 balance sheet. That's where the lion's share of the margin of safety lies...What are your thoughts on both these line items? Are they reliable?

    Do you have any marketshare information for the industry as a whole (Parl vs. coty, avon, etc...)?

    Also, do you know why property/plant/equiptment went from 3.3M to 6.4M? Did they expand operations?

    Catch you later!

  • neil_willoughby by neil_willoughby May 19, 2010 9:13 AM Flag

    2000: $0.31
    2001: $0.38
    2002: $(0.57)
    2003: $0.54
    2004: $0.63
    2005: $0.61
    2006: $1.07
    2007: $0.16
    2008: $0.24
    2009: $(0.21)

    Average: $0.32 per share

    Parlux price is completely ridiculous right now. It is trading at 40% of its net asset value. It's rare to find an easy-to-figure-out business, a decent brand with such a low price on its shares. With a margin of safety like that and no debt, the company can easily return to earnings and restore a more rational price. I love the fact the old founder is returning as CEO. Founders love their businesses. Sure he's older but look at his experience. Before long, he'll stabailize and add quality celebs to the stable. Plus, it's an easy business to figure out. Perfume is not complicated and it will be around for another 4000 years or so. Accumulate some shares now and you'll be amazed that you got them at the price you did!

  • neil_willoughby by neil_willoughby May 1, 2010 10:25 AM Flag

    check out this review of their Speedline product:

    http://www.testfreaks.com/golf-clubs/adams-speedline-draw/

  • Reply to

    Thoughts?

    by ausboss08 Mar 15, 2010 11:37 AM
    neil_willoughby neil_willoughby Mar 16, 2010 2:04 PM Flag

    I think if you look at volume since they held their conference call it's steadily increasing. And the price is generally moving upward. So increased volume, increased price. Its valuation was (and still is) so low, it can't hang around at these prices for long.

  • Reply to

    Average EPS for Adams Golf Inc.

    by neil_willoughby Jan 12, 2010 3:49 PM
    neil_willoughby neil_willoughby Jan 23, 2010 11:26 AM Flag

    Drudow, we meet again on yet another deep value stock message board! Always a pleasure. As with my ACAT purchase, which has worked out well, I'm drawn to a good brand at below net asset value. So again, I'm going to buy a little.

    A former roomate of mine is a golf pro in Montreal and I asked him for some scuttlebut on the company and its products. He said they're good. His only concern was that their products are regarded as middle-of-the-road so marketshare may be difficult to steal from the premiere brands. But.....Tiger Woods I think may have an effect. Nike, TaylorMade sales will slide and overall Golf viewership is way down. But this is perfect for a small, middle-of-the-road, moderately priced brand to make a move up. Also, I've heard that Adams is going after the female golf market with success.

    All very interesting....

    Drudow, what other deep value stocks are you looking at now?

    I'm looking at MIR, TDW, PCC, BHS.

  • neil_willoughby by neil_willoughby Jan 12, 2010 3:49 PM Flag

    2009: big loss, with one-time lawsuit charge
    2008: (0.23)
    2007: 1.32
    2006: 1.24
    2005: 0.12
    2004: 0.12
    2003: 0.08

    Average, without 2009: $0.44 per share.

    I'm going to buy a little. I think they'll turn it around and return to '06 form...

OMER
12.38+0.13(+1.06%)4:00 PMEDT