OK, an opinion on ABFG.
Premise : I have some money and I have to invest it in an OTC:BB company.
Let's say a potential investment like ABFG came to my attention. I have $1000 to invest speculatively. It takes me a while to save that $1000 from my living expenses, so I would expect to put in at least 20 hours of research before I committed my hard earned money.
I went to the ABFG website and the virtual mall. Not very impressive. Two items in the jewelry store – a necklace for $1000+ and some earrings for around $100. I would never buy an expensive piece of jewelry without having a chance to see the actual merchandise and I don't believe too many other people would either. The earrings look semi OK but why are only the mounts made of gold? If those are quality gems, it would be worth the extra 10-15$ to make the whole earring out of gold. And a couple of links that don't seem to go anywhere and a link about Madagascar that returns a “not found”. Moving on to the next store.
And there are some vitamins for sale. Mostly the new herbal products I see advertised on TV. I check GNC online and prices seem pretty competitive. But the selection is disappointing. Only 4.
And there is a travel thing but it looks like an ad for another website. Is this an ABFG company too? Wow, they do a lot of stuff. Maybe it's another company that purchased ad space from ABFG. I'll see what the company says about this later.
And there is an art store. Seems more like a poster store but posters are cool. I can't find the price of anything until I click the “buy me” button which is irritating. Nothing I want there – especially the caricatures of athletes with the facsimile signatures. To each his own.
That site just crashed my computer – really, the blue screen of death. Maybe it was just the computer. It did it again, twice. Don't try to buy the Ken Griffey thing or the Johnny Bench thing. At least I saved this word doc after the first time.
OK, back to the ABFG company website. I see the mission statement focuses on shareholder value. That is commendable. Most mission statements focus on customer satisfaction, quality, product development, and such. Management does ultimately work for the share holders and these guys seem to realize it. Still, it is a little unsettling.
The company seems to be an internet shopping site and a mining company. I can't find out anything about the travel place but it sucked anyway. There are other travel places that will tell me where I am departing from without a lot of due diligence. I am not sure about the vitamin place.
There seems to be a lot of stuff happening in Madagascar. I remember reading that one should be careful about small companies that have large portions of there assets overseas as these are difficult to verify. This makes me nervous.
There is also a lot about a 3D virtual shopping mall. Now that's a cool idea. It better not be that Rhode Island thing though. That was pretty lame. And I am kinda wondering where the bandwidth is going to come from for a virtual reality shopping experience. The mechanical guys at work generate VRML models (Virtual Reality Modeling Language) so we can visually “fly through” the parts to check for clearance problems. Now that takes a hell of a lot of computer power and a very high speed hard drive interface even with only a 256 bit color palette and no texturing. My DVD player at home can fit a 2 hour movie onto a 4.6 GB DVD diskette. That is about 5 million bits a second which is beyond even cable modems unless there is a really quiet period. That's for a good 2 dimensional image which is not interactive. I don't know how they are going to accomplish this VR stuff without a lot more bandwidth. Not my area but I know enough to have doubts.
OK, so much for the pseudo Peter Lynch approach.
I looked at their news releases and, with the exception of some focusing a different company called KANA, all news releases are from a company called PR Newswire. I check out the news site and it is a site where companies pay for press releases to be distributed. (Hence the term PR, I guess) Nothing wrong with that but I regard it as an advertisement rather than an piece of research. There is no news on “news” sites. At least recently.
OK, so much for a ½ hour of DD. Now, I really don't have 20 hours to look into this; I have lunch. Let's talk about what is being said on SI and RB.
Now I have been reading these threads for a few weeks and I am not even going to attempt to condense them. There has been a lot of work done on both sides.
Here is a post from a very reasonable (excepting horrible taste in baseball teams) individual with some questions about ABFG's business plan:
Message 9125213 . Excellent points which have never been addressed (at least as far as I can find) on either thread.
Here are some questions about assets and management that appear well researched.
Message 9071088 Why haven't these been refuted by the longs (let alone management). It is clearly in their best interest to do so.
And then there is the stock's champion on SI. I have no doubt that he has put a lot of work into researching this stock. But the best I have seen him come up with is that there have been internet broadcasts, commercials on a Chicago TV station, a banner in a minor field ball park, etc. In short, advertisements. I have no doubt about the company's ability to advertise. The float has increased dramatically over the last three months: Message 8819145
I also read the posts at RB and they are full of things like “we have to stick together and support our stock” and “Go AFBG”. Well this is a stock – not a lover or a piece of art. It is not something that either deserves or requires loyalty.
I also see messages like this: ragingbull.com which, if true, trouble me. Can you imagine receiving an email like that from the IR director at IBM?
Contrast the research styles of the longs and the naysayers. The majority of the longs' DD seems to involve calling the company. Well, that's not how you do research. You might call the company to verify that a press release is legitimate but that's about it.
Well, my hour is about up. One could make money with this stock, perhaps even dramatically. I have seen microcap illiquid stocks rise 100% in less than a week. You are not going to get that performance buying shares of CSCO.
I wouldn't short this stock but I wouldn't buy it either. If I received it as a gift or inheritance, I'd sell it immediately. There are unanswered questions about assets and management.
Now Whisperer, do you have an opinion? I'd be interested in hearing it. If you spent 20 hours reading through RB and SI threads on ABFG, would you invest your money in it?
disclosure: I have no position in ABFG nor will I ever. Furthermore, I never invest in companies with unaudited financials either long or short.
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