Here's an interesting piece. Looks like the type of stock we like! Pancho, this one looks like it can se your analysis, Seems like some shady accounting going on.
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Meanwhile, yacking about Yurie: A recent item here questioned less-than-arms-length relationships involving the company and companies controlled by Yurie's (YURI:Nasdaq) vice chairman, Kwok Li. Yesterday Yurie, which makes telecommunications networking hardware, reported blowout first-quarter numbers. However, a closer look at quarter-to-quarter sequential numbers, the proper measurement of a fast-growing company, shows receivables ballooned by 58% from December through March. Revenues, meanwhile, were up a more modest 11%. And days outstanding of receivables leaped to an uncomfortably high 95 days from a questionably high 68 days. It's always an eyebrow raiser anytime receivables days outstanding rise. It's a double eyebrow raiser when, at the same time, receivables rise much faster than revenues, because it suggests the company is stuffing distributors with more product than they can possibly sell. That was the first sign of trouble at Cabletron (CS:NYSE). In turn, high receivables today can cause quarters tomorrow to be soft if the stuffed products can't be quickly sold. (Alas, poor Compaq (CPQ:NYSE), we knew it well.)
Furthermore, prepaid expenses zoomed higher, suggesting the company deferred taking expenses, which if it had could've resulted in lower earnings (by a couple a pennies per share, according to one skeptic).
And whaddaya know -- coincidence of coincidences: The balance sheet happens to be outta whack the same quarter the company has had little in the way of product sales to Splitrock, its biggest customer, which is controlled by Li.
Finally, Yurie's stock has been climbing ever since this column first raised questions about Li's cozy internal relationships. Another in a coincidence of coincidences: Shorts are being asked to return their borrowed shares to their rightful owners. Short squeeze, anybody? (Ah, the games people play.) |
