To:Ralph Ulisse
From: Cool Hand Luke
Note of appreciation: your attempts to keep the facts straight on NWCM are appreciated.
Don't normally join the thread - but pet peeve is when certain parties use disinformation to manipulate the price of one of __my__ holdings. I work hard to keep up with the facts. Here are a few ....
1.Yes, Schonberg is still at Dreyfus - co-managing. Yes, his fund had some very poor quality in it. NWCM unfortunately has been tarred with that brush. However, Dreyfus current holdings in NWCM (800,000 shares plus or minus) have been static for several months. I would be more comfortable if they owned fewer, but naturally prefer they sell at higher levels than $10. Other institutional shareholders in NWCM are stable and longterm - and, in any event, don't own more than 200,000 apiece (most own 30 - 50, 000 shares) and several - Like Frank Russell, are new buyers. No, I don't have an inside track - this is all on the Bloomberg or the NASD filings.
2.Yesterday's 10-k revealed no serious problems. Inventories are high by some standards, but not in light of the fact that there was a spate of sales in late February - for which the merchandise was as yet undelivered at year-end - and therefore still in inventory. It is not unusual for a company with these sorts of product (low-price, high tech, with mass merchandisers doing most of the selling, subject to unexpected demand in quantity) to have 2Q's worth of inventory.
3.Receivables are blue chip. Period.
4.The Simple acquisition is synergistic. No overlap of product. No overlap of distribution channels. $100 million plus in revenues last year. Earnings - difficult to say, they were not public. If NWCM earnings are flat in 1999, and Simple's are too (both of which are doubtful) then revenues for the new company are $200 million plus. If NWCM uses the entire overallotment of shares - described in the 10-k as 1.3 million above the 2.2 million in the origninal deal - there will be 13.5 million shares outstanding - of which only 2 million plus or minus will still trade (Simple shares will be 144 for awhile). Bottom line earnings? Who knows. On revs of $200 plus, at least a $1 share.
5. This is not to say this company is without risk. The market for their products is tough these days. The due diligence on the Simple acquisition is not done - the deal could fall through. The Company is small and marginally capitalized. Etc, etc.
6. To describe the professionals who run this company - and the people who handle their official PR - as "goons" is the worst kind of slander. The Khans have done a marvelous job building this company from scratch three years ago. That is not to say they will not encounter problems along the way. Risk is everywhere. If they continue to build their product base, enhance their outlets and vendors, avoid trying to cut corners and speculative mistakes as they build their business, we will all make money from their efforts. Dianne Will, the publicist for NWCM, is a first class professional. She is helpful with information, disseminates only the facts, and is not shy about sharing the bad news as well as the good. Most of us are adults (note exceptions below) and we want the facts - good or bad - in order to make up our own minds about the prospects of an investment, and the degree of risk we wish to accept.
7. I only decided to join the thread because of comments by "paperheart" and "convicted felon". The latter was hyping the stock when it was high. The former is denigrating it while it is low. Frankly, if they are not one and the same person, they are twins of different mothers. The obscene language used by paperheart not only undermines his message (it is not a keen mind that expresses itself in such a fashion) but is in direct violation of his Silicone user's agreement. It is unfortunate the freedom offered in these threads must be so unconscionably abused. One cannot go about answering their obscenities.
I own NWCM, and it is because the facts and the prospects speak for themselves. Even the disappointing .82/share is nearly twice last year's earnings, and a mere 12 times trailing earnings at today's price levels. The new products in production are extremely interesting. I particularly like the photograph print maker they are developing - making color prints from my digital camera, or slides that I have scanned into my Adobe photoshop.
If I am going to lose money, I would prefer it to be because the Company's prospects did not pan out - not because of the wild hype of the likes of these people, or the self-serving Asensio's of the world.
As I said before, I am just another investor who does his homework, and tries to network with other people who own the stock. Most of us are decent people, and decent people make money too! |
