awesome thanks. DANG i'm in because of low risk / high reward setup. sell below recent consolidation lows. the one i like most fundamentally is OSTK. trades at 1/3 to 1/5 the price/sales of GRPN, AMZN, TJX, ROST at a time when they're really starting to ramp up their business (margins are expanding from 17.9 18.5 18.9 19.7%, revenues up 2 9 17 22% last 4 qtrs) and they're just going into international. most retailers get 30 to 50% internat'l sales...they have 1%.
anyway, i see you have a lot of the hot stocks in your list. where do you find your list? you must be having an awesome month. i got decimated by a few stocks i held through earnings (duh!). still up a good amount this year and last 4 years but having a rough patch.
let me know what you think of MY as well. wind energy play out of china. huge cup and handle fomring on weekly chart and has some really good growth ahead of it.
i also think there's been some commentary on international expansion on the conf calls. most of these retailers offer shipping to international but the shipping quotes are usually way too high so only a small amount of people overseas order. hence the 2%. i think this new program will involve them drop shipping from manufacturers and wholesalers in europe etc. could be a nice boost to their biz. byrne mentioned potentially doubling revenues overtime from this on one of the last couple of conf calls. can't remember which one.
This stock has a ton of room to go up if it is going to get anywhere near the valuation of its peers. TJX and ROST, two overstock bricks and mortar retailers, are valued at 3X the valuation of OSTK on a forward price to sales basis, assuming 25% growth coming from expansion to international which will be launched next month. Excluding that, they're still priced at 2X the valuation of OSTK. Keep in mind the economics of an offline retailer vs an online retailer too. The cost of capital for online retailers is far less than offline ones which is why companies like GRPN and LQDT trade at much higher multiples.
that's really not that many shares. That's a total of about $10 Million. The lid is about to be lifted on this one.
This is what I've read as well. 3.7 million shares. Perhaps the company will go back to trading at the cash on hand which is $3.75. If they can break even within a year this looks tremendously undervalued. We shall see...
i understand the urge to take profits but this is trading at a huge discount to book and they have massive projects coming down the pike very soon. i might trade some of my position but i'm holding the majority of this until the Reliant Power projects get underway. They will have a leadership market share in India after those projects get going. I've read 30%ish
tough day. about the only good thing are that it was not on heavy volume and the market was down big as well. i still think this is carving out a longer term bottom and am encouraged by signs of improving enrollments. they're inching toward breakeven and paring down non performing assets. if they can get to breakeven and get a little momentum behind themselves then this is one dirt cheap stock.
They're still trading at a massive discount to book value and below cash and are now debt free so if they can get to breakeven then it makes the bearish argument go away completely. If that happens then this could trade up to book which is around $8/share. EDMC by comparison, trades at 4X book, and has a massive debt load (about the same as entire market cap). EDMC is currently profitable and trades at 30 to 40X earnings. All it takes is a defined target date for CECO to get to breakeven and this thing is off to the races.
"During the quarter ended June 30, 2013, the Company drew $1 million on the Credit Facility. As of June 30, 2013, the Company had an outstanding balance under the Credit Facility of $5 million. As of June 30, 2013, we were not in compliance with the current ratio covenant as defined by the Credit Facility. In July 2013, a semiannual redetermination of the borrowing base was completed by the lender, subject to the satisfaction of increased collateral requirements being provided to the lender. The Company is in the process of providing the required documentation. The redetermination will result in an increase in the borrowing base from $6 million to $12 million. The increase in the borrowing base will result in the covenant violation being mitigated. The lender has not presented a notice of default related to this covenant violation to the Company. As of June 30, 2013 we were in compliance with all other covenants contained in the Credit Facility.
What is your take on this?
This upcoming quarter they're expecting to do 5.88% sequential growth which equates to roughly 25% annual growth. They have actually managed to keep their overhead costs in check as they have grown slower than revenues.
So if I assume 25% top line with 20% expense growth, I get $82.9 MM Revenues.
Using same margins as last year I get $53.9 Gross Profit.
Expenses were $34.5 MM so a 20% bump up makes them $41.4 MM next year.
That equates to $12.5 MM operating income.
They have a huge cash balance that they earn interest income on. Last year they had $79.9 MM cash at 12/31/12. They paid about a $7.8 MM dividend in June and as of 6/30/13 they had a $83.3 MM cash balance. That's a cash boost of about $11 MM in the first 2 quarters excluding the dividend. That's a little high but they should do about $14 MM in 2013. Anyway, Int Inc last year was $2.6 MM. I'm assuming another $2.8 MM. Tax rate was around 14%.
$12.5 MM Op Inc
+$2.8 MM Int Inc
=$15.3 MM Net Income
After tax (14%)
Shares = 29.9 MM
EPS = $0.44
They pay 60% of income out as a dividend. That's $0.26. Based on a price of $6.44 that equates to a 4.1% dividend.
So you get a 4% yield, 25%+ growth, and the company has $2.90 a share in cash. Kind of like low hanging fruit, no? Anyone else see something I'm missing?
you can actually do it when you get a chance. it's pretty cool. just click on that chart to your right and then click on the 1Y chart. it's pretty cool huh?