Daniel,
Great job calculating the number of orders for December!
Re: How seasonal is December? It is my understanding that retailers do 2/3's of their business around Christmas-time. I don't know if that is true with Walmart, perhaps more true of smaller retailer outfits.
Re: 80% margins. That number came to me from Steve Felix at Paine Webber and I confirmed it with Charles Goyette at Alanco who didn't say it was wrong. I figure you have to allow for salesman costs, general and administration overhead, so in fact this number could be optimistic near term, but pessimistic longer term as they build up revenues and spread their fixed costs over more revenues.
I am encouraged by the fact that we all seem to understand this segment of the company and their ability to make money, but what I feel is the great unknown is the whole CDSI side. I am in no way an expert at either side of this business and all I know about the CDSI is what someone else has told me. I realize that selling to Governments, particularly foreign, is a game that is best left to the professionals. Gov's are particularly slow in deciding and then once they decide, they are particularly slow to pay and then if the product doesn't work exactly as specified, then you have a long time to reserve in case they are unsatisfied.
Re: Chinese coal. I have heard too that their coal is lower in quality and that the CDSI works fine.
Lastly, ALAN was offered at 1 1/2 on Friday. Time to buy? Too bad the sellers don't know what we know or they wouldn't sell. The market makers are obviously stuffed with this stock here, so they will likely push it to its 'worst case scenario' to find out at what price the real demand (support) for ALAN shares is. Once a floor price is set by the marketplace, then we can buy more shares with very low risk. The key is to watch price and volume until something unusual stands out.
ALAN isn't due to report quarterlies until April sometime, so that kind of leaves us adrift until then.
I'll try and post when I "see" the action that indicates the bottom.
Regards,
Tim West
Sunday, Feb 16th, 6:32 am est |
