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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: TimbaBear who wrote (88138)	2/3/2008 4:25:15 PM
From: bruwin	Respond to of 110194

Happened to read a post of yours, from 25 Sept. 2006, regarding 4 stocks which you suggested could be candidates "for perusal" ... I refer to GMR, EXAR, OVTI and BVF. Apparently BVF was a PCYHuang "pick". For what it's worth, I also had a look at their Fundamentals, but found it only necessary to look between TURNOVER and EBITDA to come to conclusions about these 4 companies. Your brief reasons for each were ... GMR :- "Low debt to equity, low price to book, very nice profit margin, pays a nice dividend and has great cash flow." I found .... Last 3 Annual T/O's fell from $701m. to $567m. to $326m. The sum of the last 3 Quarterly T/O's is $187m. To equal GMR's last Annual T/O of $326m. the company would need a 4th. Quarterly T/O of $326m-$187m.= $139m. A likely result, do you think, seeing as the average T/O for the last 3 Quarters was $62m. ?! GMR's price on 25/9/06 was $34.78. It's now down 31% to $24.01. EXAR :- "No debt, low price to book, high percentage of current price as cash on hand, nice revenue growth, decent profit margin, strong cash flow and diluted number of shares is flat to down from the number three years ago. No dividend." I found .... EXAR's Annual T/O may have increased from $57.4m to $67m. to $68.5m. However, its EBITDA has fallen from $1.8m. to $5.4m. to the latest $1m. But worse still, its EBITDA in the last 2 Quarters has shown losses, and has fallen from -$2.4m. to -$13.4m. EXAR's price on 25/9/06 was $14.07. It's now down 45% to $7.68. OVTI :- "No debt, low price to book, high profit margin, increasing sales, very nice ROA, good cash flow." I found .... OVTI's Annual T/O's have been going up, BUT compulsory expenses of CoS and (SG&A+R&D) have increased quite dramatically in the last 2 years. CoS/TO has gone up from 60.9% to 68%, while (SG&A+R&D)/TO has gone up from 15.3% to 23.9%. Needless to say, this has reduced OVTI's percentage EBITDA Margin from 23.6% to only 8%, a fall of over 63%. OVTI's price on 25/9/06 was $14.25. It's now much the same at $14.59. BVF :- "Reasonable debt level, high quick ratio, low price to book, low price to capital spending ratio, very nice ROA, increasing sales, pays a dividend, very nice cash flow." I found .... The sum of BVF's last 3 Quarterly T/O's was $(242.8+203+188.9)m. = $634.7m. BUT its last Annual T/O was $1070m. In order to equal that amount in its 4th. Quarter, BVF would need to Turnover $1070m.-$634.7m. = $435.8m. A likely possibility, do you think, seeing as its average Quarterly T/O was only about $212m.?! BVF's price on 25/9/06 was $15.00. It's now down to $13.24. The way one could view this is to possibly consider the fact that, for Industrial type companies, it generally starts with their Turnover performance. After that, it's a case of those compulsory expenses CoS and SG&A+R&D. If all is going well in that regard, then one could look further and consider other Fundamental criteria. If not .... then "high quick ratios", "low price to book", "nice ROA", etc... don't appear to have a positive effect on a discerning Market, as can be seen in their price performance. Or am I wrong ?