CONTRAST
PTI
PTI announced its Q2/06 results and it was a mixed bag. Revenues, EBITDA, and net income showed some modest growth, but EPS declined. EBITDA margin fell by approximately 1.0% sequentially. The market is not pleased and the stock was rather severely punished (down 8%). Being a shareholder, I can’t say I am happy, but nonetheless, I think the market appears to over-react a bit.
This illustrates the hazard of investing in turn-around situation. In most of cases, it would not work simply due to weak management. And this management team has not shown that they have the vision and management skills to turn around this company. The first full quarter since acquisition of Mova has been disappointing and on the call, the management appears to whine a lot and I don’t sense a lot of confidence in their tone! The share is not really cheap either. Even after today’s decline, it is trade at 20XEPS05, and the EPS number will be brought down by Monday morning, and we don’t see any sign that earnings will grow in near term. I do not see any catalyst until next quarter. Cut loss ($10.04). I was wrong on this one, and better to cut and run instead of procrastination.
CWH
Contrary to PIT, CWH has been a very consistent performer and it has been growing rapidly. The stock has come off quite a bit on a very low volume. I nibbled some this morning at $9.0. I believe it could made 0.45-0.55 this year and 0.60-0.65 next year. It is trading at 15X of next years EPS. Initial target at $12, stop loss at $8.5.
PTA
I attended two conference calls this morning and what a difference. PTA’s management said what they would do, and on this call, checked. And they outlined what they would do next quarter and I have no doubt that they will be checked as well. The company is extremely under-valued (6XEPS05, half of its book value). There are a number of catalysts in the work, new reinsurance agreement, potentially upgrade, conversion of its convertibles (reduce its debt to zero), additional states to open for business, reverse split and additional coverage, not to mention better earnings. Management is confident and appears to know that they are talking about. I believe this will be a $5.0 stock by this time next year.
I had a decent month of May where I am up by 4.6%, most resulting from techs I added in late April. June has an ominous start as one of my holdings missed its earnings and fell of the cliff. It is also rather difficult to pick as stocks are not cheap here. Good thing is I have quite a bit of cash, and I would not mind if the market pause and consolidate here.
PTI announced its Q2/06 results and it was a mixed bag. Revenues, EBITDA, and net income showed some modest growth, but EPS declined. EBITDA margin fell by approximately 1.0% sequentially. The market is not pleased and the stock was rather severely punished (down 8%). Being a shareholder, I can’t say I am happy, but nonetheless, I think the market appears to over-react a bit.
This illustrates the hazard of investing in turn-around situation. In most of cases, it would not work simply due to weak management. And this management team has not shown that they have the vision and management skills to turn around this company. The first full quarter since acquisition of Mova has been disappointing and on the call, the management appears to whine a lot and I don’t sense a lot of confidence in their tone! The share is not really cheap either. Even after today’s decline, it is trade at 20XEPS05, and the EPS number will be brought down by Monday morning, and we don’t see any sign that earnings will grow in near term. I do not see any catalyst until next quarter. Cut loss ($10.04). I was wrong on this one, and better to cut and run instead of procrastination.
CWH
Contrary to PIT, CWH has been a very consistent performer and it has been growing rapidly. The stock has come off quite a bit on a very low volume. I nibbled some this morning at $9.0. I believe it could made 0.45-0.55 this year and 0.60-0.65 next year. It is trading at 15X of next years EPS. Initial target at $12, stop loss at $8.5.
PTA
I attended two conference calls this morning and what a difference. PTA’s management said what they would do, and on this call, checked. And they outlined what they would do next quarter and I have no doubt that they will be checked as well. The company is extremely under-valued (6XEPS05, half of its book value). There are a number of catalysts in the work, new reinsurance agreement, potentially upgrade, conversion of its convertibles (reduce its debt to zero), additional states to open for business, reverse split and additional coverage, not to mention better earnings. Management is confident and appears to know that they are talking about. I believe this will be a $5.0 stock by this time next year.
I had a decent month of May where I am up by 4.6%, most resulting from techs I added in late April. June has an ominous start as one of my holdings missed its earnings and fell of the cliff. It is also rather difficult to pick as stocks are not cheap here. Good thing is I have quite a bit of cash, and I would not mind if the market pause and consolidate here.
posted by ZIGZAG at 6/03/2005 09:19:00 AM
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