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Strategies & Market Trends : Value Investing

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To: E_K_S who wrote (42866)	6/1/2011 12:29:20 AM
From: Jurgis Bekepuris	Read Replies (1) of 78870

SYEV - I took a look at the new 10K. Great sales, earnings growth, great ROE. The company is really obnoxious in self promotion. I hate the microcaps that throw around nebulous promises of 100 years of expertise while quoting $400 billion world water market and 6000 people dying in Africa every day from water borne diseases. Bottles manufactured in China by subcontractor, filters in US by SYEV. "Seychelle’s filters include powdered water-activated coconut"... seriously? "As of February 28, 2011, we had a President and two (2) executive employees managing the Company with two (2) administrative employees supporting that effort. In assembly, operations and warehousing we had twelve (12) full-time employees and four (4) independent contractors working to fill orders. " - so they hired 12 new employees more than doubling their workforce in a year! They did not spend anything on R&D. Their CEO who draws no salary does R&D in his spare time. o.0 3 customers 20% sales each = 60% of sales to 3 customers. A bit risky. They recorded 700K of deferred tax assets. Therefore their OCF is only $1.2M compared to earnings of $1.7M. This is not particularly good. 6.5M warrants were forfeited (???) but 8.4M were granted... Their accounting for warrants is a bit fuzzy IMHO. They dismissed their previous accountants in June 2010 and hired new ones for half cheaper fee. They also had to change accountants in 2009 when their previous accountant Moore&Co were disciplined by regulators. Their president/CEO/chairman works for free. Their executive VP (??) and COO/CFO work for 50K salary a year (previously they worked for free too). Not sure if this is a plus or a minus... Do I really believe that great inventors and managers work for 8-man company for free for 6 years? Every time I start longing to buy SYEV, I reread this and I lose my appetite: Message 27227666 (no, seriously, airplane????) And yet, it's quite possible that SYEV investors will get a multibagger out of it. ;)

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