Friday, May 12, 2006
"There's No Such Thing as a Free Lunch."--Milton Friedman
The 10Q Detective is pleased to announce that come June 2006, readers will be afforded the opportunity to join our soon-to-be launched bi-weekly online newsletter as charter members (yes! That means being able to subscribe at a discounted rate.)
The 10Q Detective will still be offering investment ideas and exposing managerial malfeasance on our blogspot, but detailed analysis, including interim reports and follow-up(s) until price-closeout will only be accessible to subscribers of the newsletter.
Quid pro Quo. To those loyal readers who have helped to make our web log one of the more popular online stock destinations, we thus—one last time—offer (for free) follow-up opinions on some of our more popular stock ideas:
12-22-05. Taser Int’l (TASR-$7.20) $10.16 41.11%
SELL. Recent court cases continue to validate the use of the TASER device. On May 10, 2006, the sixteenth product-liability lawsuit against the Company was dismissed. Nonetheless, profitability still remains elusive. CLOSEOUT.
01-17-06. Convergys (CVG-$15.82) $19.54 23.5%
SELL. Investors have ‘converged’ on our initial investment thesis: “IF Convergys can demonstrate sustainable quarterly-Earnings-Growth….investors would be willing to expand the Company's forward earnings multiple….” Recently, this provider of outsourced business services, said its earnings grew 18 percent in the first quarter (from growth in its customer and employee care groups). The company also boosted its full-year outlook. The stock still has room to run, but the 10Q Detective is pleased to trade-out with a 23.5% gain in only four months.
02-09-06. Genesis Microchip (GNSS-$19.25) $12.33 35.94%
BUY. Jim Cramer screamed BUY on his ‘Mad Money’ show—good enough reason for us to consider the contraire position. Kidding aside—we did warn readers that business was cyclical and that GNSS was too dependent on too few companies for business. On May 3rd, Genesis said in a conference call that it lost business from two major customers, LG and Toshiba. Ergo, this designer of integrated circuits used in flat-panel displays tripped up investors and Wall Street analysts alike when reported earnings fell short of expectations. CLOSEOUT OPEN SHORT.
03-27-06. Gigabeam (GGBM-$10.80) $13.15 21.75%
SELL. Competition for WIFI is fierce—lock in predicted profits.
03-14-06. Martek Bio (MATK-34.24) $27.11 20.82%
BUY. Like shark cartilage tablets, over-priced and a questionable cure-all for what ails the patient. One can get their required daily dietary requirement of essential fatty acids by eating right. CLOSEOUT OPEN SHORT
03-29-06. Spectrum Brands (SPC-21.25) $16.92 20.38%
BUY. Shares of this consumer product supplier fell a fortnight ago after the company reported fiscal second quarter profit below its own estimates due to weak battery sales in North America and Europe. Housecleaning—CLOSEOUT OPEN SHORT
01-10-06. BioCryst Pharma (BCRX-.$20.08) $13.54 32.57%
BUY. A highly touted bird-flu vaccine play that is rolling in red ink. Could probably fall to single-digits, but why turn down bragging rights? CLOSEOUT OPEN SHORT.
12-21-05. Brookdale (BKD-$31.00) $37.32 (21.77)%
SHORT. Brookdale Senior Living Common Stock shares continue to trade on helium, as investors anticipate a fundamental turnaround in earnings. Back in March, the Company reported a 3Q loss of $(24.5) million, yet boosted its quarterly dividend 40% to $0.35 per share. The balance sheet cannot support this dividend payment, with a total debt-equity ratio of 119.7%, and a quarterly debt service expense of $12.8 million. Fortress Investment Holdings, which owns 66.5% of Common Stock outstanding (and controls the Board of Directors), basically rewarded itself with this dividend ploy. OPEN POSITION
Want to continue to follow Brookdale in future months? You will soon find out how easy it will be to do so!
If readers have any questions or concerns on the announced changes, do not hesitate to send an e-mail.