Paul, thanks for your comments, I like a thread where picks are challenged rather than rah-rah cheerleading.
Re. ELAMF - I've been in it for a few months. I believe the issue with them is growth not earnings. Margins have been slim compared to other contract manufacturers. If some of the forecasts about upcoming Qs are correct then investors will flock to it - but given its history, investors will react rather than pro-act to this stock imo.
Re. MMBLF - the new head guy is the same guy who turned Manville around. The stock is up 7% since he was announced but I believe it is still in its early stage of appreciation. I've heard, but cannot confirm, that the Bass family has significant holdings. The announcements to date allude to the fact that he was brought in to boost shareholder value - they have several forest product divisions and obviously a lot of real estate. And you are correct - the time to buy cyclicals is while they are still losing $.
Re. radaf - theres a need to look at history. It went public at 11, dropped to 9, to 6, to 3, to 0.75 and is now back to 11. Their core competencies are innovative games and electronic contract manufacturing - basically they manufacture electronic hand held games - very high margins for their own games and decent margins for Hasbro.
During its "swoon" period - they built up too much inventory, had little contract manufacturing to balance load, were geographically diverse in manufacuturing and were focused on hand held gambling games. They restructured, cutting costs to the bone, consolidated manuf. to China, and expanding R&D. The payoff has been big as sales have now expanded and most of the margin is flowing to the bottom line. The stock has developed a history during the last few earnings releases of running up a few weeks before release. The CFO posts on the RADAF thread on SI. There has been insider selling but I believe that based on earnings there is still room for a run into the mid teens prior to earnings release in Dec. Why? because with them, earnings in the short run are proportional to factory workers (they book what they ship) and indications are that they have record levels of workers for this Q - and that we will see over 0.40/share for the Q and about $1 for the year.
Re GNSM - earnings tanked while they boosted G&A expenses while sales decreased. Product sales down while service sales continue to increase. However, product upgrades were announced in July (now shipping) and they are cutting overhead expenses and have a number of trade shows in October and November. When this will show up in the bottom line is difficult to say, but they have a nice cash cushion. My experience in a similar situation (SSNC which I watched but did not enter) indicated that very early signs of turnaround were preceded by strength in stock and followed by very rapid runup.
Gary
P.S. - which stocks do you currently view as value plays? |
