Hello Papi,
Appreciate your words of caution... I've always felt that SI threads are better off without one-sided cheer leading... and that opposing or cautionary views will lead to better investors for all of us participating on the thread.
>>Don't mean to throw cold water on all the PTEK enthusiasm (I can't find anything wrong with it either), but the analyst "gift" comment calls to mind a comment made a few years ago by an analyst regarding Discovery Zone, then trading at about $10 (down from around $20). He said "back the truck up to this one and buy all you can". I visited the DZ with my kids and frankly could not see what all the hype was about, so I passed on the buy. Thank god- a year or so later the company<<
PTEK, is in a strong cash position, after having gone through a financing last year using subordinate convertible debentures. It had $153 million cash on its balance sheet Mar 31/98. The Dec 31/97 10k reports that its receivables turn around in 27 days since most of the subscribers pay through credit cards (it is like AOL, AT&T etc.). Therefore, cash flow from operations wouldn't be a problem Over past 2 years, cash outflows were spent mainly on acquiring new complementry businesses to make it into a fully integrated communications company.
>>When a company pulls back like PTEK has for no apparent good reason, there often is a very good reason for the pullback; not always, but often. Doesn't mean I wouldn't buy it around here-I may do so soon-but not before I have a better sense of what is going on here.<<
Actually, I've come across many investments in the past where the stock pulls back because some large institutional investor wanted to get out of the position for reasons specific to the investor. Had nothing to do with the merit of the stock itself. This creates a buying opportunity.
>> In the meantime, be wary of "gifts", especially those so ordained by analysts whose motives are not disclosed.<<
Fair point.. one always have to take analysts recommendations in the media with a grain of salt. We can safely assume that when an analyst make recommendations, they obviously hold the stock in her/his fund. In this particular case, I read the analyst as being sincere in his view, simply expressing the fact that the stock is a real buy after having taken such a deep dive over the last two days for no apparent fundamental reason.
The great opportunity that I see for this stock is its Orchestrate launch this year as being a complete service provider for internet email, long distance, fax, conferencing, etc. It is like AOL, AT&T, Worldcom all roll into one. Also, communication stocks are now in play for M&A. The company is very growth oriented, and it'll be an exciting time to see what lies ahead. |
