$INDU - Although it could go either way and the market is going to do what it's going to do, this chart doesn't look so bad to me, like it's ready for a rally:
"Copper and Oil both look like they have more room to run"
The inverse correlation with gold needs to reverse in favor of copper and oil, I'd like to see gold find support around $1675 minimum, don't want that Aug 8th gap to close.
Based on what I see in the charts, tomorrow seems to be a make or break day.
We still haven't tested the 10,500 level I'd anticipated, could be one heck of a fakeout day if we tested that tomorrow for an intraday reversal and possible green close?
TOF- I'm confused about your comment re- MITK about the JPM $'s. They were deferred in Dec. 2010 and according to the 2Q 10K they have completed the contract and realized the revenue. Where do you see the duplicity?
I'm also trying to figure out how much money is directly from the channel partners, any re-loads, and how much from direct deals. I'm guessing they might have given JPM a sweetheart deal to get them on board.
*(US) FED CHAIRMAN BERNANKE: Submitted by Vadym Graifer (2283 comments) on Fri, 08/26/2011 - 10:05 #93320
*(US) FED CHAIRMAN BERNANKE: FED WILL DO WHAT IS NEEDED TO ASSIST RECOVERY; FED POLICY CANNOT DO MUCH TO ALTER ECONOMY'S LONG-TERM TREND - JACKSON HOLE SPEECH
- Reiterates that the Fed possesses the tools necessary to aid the economy. - Notes that Fed will meet for two days instead of one in September, to consider moves to provide additional monetary stimulus and other issues at that time. - The US needs to develop better fiscal decision making processes. - Pace of economic recovery has been slower than hoped, still sees better growth over the second half of 2011. The global economy is generating significant growth. - Still expects inflation to be at or below target rate of 2%.
Mark - From what I read in the 10k for last year, MITK stated that they were going to defer revenues from Chase until after all services were executed. They already implied that Mobile Bill Pay was one of the services they signed up for...since that hasn't been signed on to by Chase then it makes me wonder if the companies recognized the deferred revenues in part to help good revenues for the quarter.
Also, I don't like that they are recognizing revenues up front when a client signs on...the implies that there won't be a big bump in revs when BAC/COF launch. So it makes me question just how much money they're making on each deposit/user.
I went through the pain of tracking all of the orders placed through TZOO's local deals segment and it looks pretty impressive. Here is what I found:
*Over 8 hour period $75,015 in gross sales were made in 49 cities. That's about $225k per day. They have 75 total cities launched right now. So that would be $344,450 per day for all 75 cities, which extrapolates to $32,030,000 for a quarter.
Assuming a commission rate of 32%, which is below estimates of 35%, their take would be $10,250,000 for the quarter.
You need to add this to their core business. The core business generated $28MM in revs last year this quarter. I assumed a 10% growth rate year over year, which is pretty conservative given their 5 year growth rate has been about 20%.
So that would come to $10.3MM + (28 x 1.1) = $41MM.
If you back out Cost of Goods Sold of $2.5 MM (last qtr was $2.4 MM) and then overhead costs of $27.8 MM (last quarter was around $27.4MM), you arrive at a net income figure of $10.75MM for q3. After backing out taxes and dividing by shares outstanding you get $0.43 EPS.
So $41MM and $0.43 EPS. The estimates are $39 MM and $0.38 EPS.
This company seems downright cheap to me. The EPS run rate is around $1.70 right now if my numbers are correct and the revenue growth rate is about 40%+. They haven't fully launched all of their cities and expect to launch another 25 cities by year end. There is a significant amount of room to grow this business and I can project EPS of at least $3/share after it's Local Deals service is fullly launched. Having 24 Million subscribers and growing is perfect for offering this local deals service.
I think this company could very easily be back up to $100 in the next 12 months.
TOF- Yeah, I thought the same thing and it was asked about in the con. call. In the latest 10Q they say all services to Chase are complete. They have also said a major bank is going to use mobile bill pay by EOY. Maybe it's not Chase?
Your right though. It's difficult to determine their revenue stream.
Good analysis TOF. Are you taking into consideration a big downturn in sales rate during the overnight hours? Perhaps on the weekends if TZOO does not send out local deals on the weekend (I'm not sure if they do or not). These could have a dramatic effect if trying to just extrapolate from an 8 hour period during peak sales hours.
Jesse - I did the analysis from 4PM to 12AM...I noticed that some of the deals I was tracking had been pulled from the site most likely because the vendor sold a pre-determined amount so I most likely actually missed out on more sales.
Anyway, my results come to roughly the same conclusion that I've read from other people. In fact, the company came out and said they are on track exceed $100 Million in Annualized Gross Revenues on Local Deals, which would equate to greater than $25 MM per quarter.
I'll keep tracking and let you know what I found.
By the way, I'm glad I waited for an hourly break of 1,140 ES. I had a feeling this move down was a fakeout.
CP - I guess it all comes down to Europe, but it sure seems like the momentum is waning. I noticed CDS spreads dropped a decent amount yesterday despite a selloff in the equities markets, which is a sign that the crisis may be easing...thus, the fundamental reason for a bit more short term pullback in Gold
Euro zone, if we get some god news here, we could rip on Monday.
The most important speech my well be delivered on Saturday by Jean Claude Trichet. The ECB president has made two mistakes by raising overnight rates during the European credit crisis. As the equity values of Europe’s banks have been crushed and the fear of a Lehmanesque type of banking debacle rising, it will be important to hear if Trichet has any plans to aid the troubled banks by moving to push for a higher level of money for the EFSF.The buying of troubled sovereigns by the ECB also needs to be enhanced so as to remove funding pressures arising from greater haircuts on the troubled sovereigns. I am sure that Trichet is getting an earful from the gathering of the world’s top monetary policy makers. Will Trichet attempt to raise his stature as he nears the end of his ECB Presidency. November 1 is quickly approaching.
S-SE HAW:2-3 FACE:3-5 Tides H 02:31PM 2.3 ft. L 09:21PM 0.2 ft. 18SEC FORERUN SSW+SSE HAW:2-3+ FACE:3-5+ Tides H 03:07PM 2.3 ft. L 09:48PM 0.1 ft. SSW+SSE HAW:2-3 FACE:3-5 Tides H 03:44PM 2.2 ft. L 10:17PM 0 ft. 3'SSW SSW+SSE HAW:3-4+ FACE:5-7+ Tides H 04:20PM 2.1 ft. L 10:47PM 0 ft. 22SEC FORERUNS S-SW HAW:4-6+ FACE:6-10+ Tides H 04:57PM 1.9 ft. L 11:19PM -0.1 ft. ADVSRYS S-SW HAW:4-6+ FACE:6-10+ Tides H 05:35PM 1.6 ft. L 11:53PM -0.1 ft. ADVSRYS S-SW HAW:3-5+ FACE:5-8+ Tides H
Wow the trend line in ES from the bottom 3 weeks ago was hit exactly to the T this morning and it bounced hard. Given this it's highly likely we retest the 1,200ish highs from last week.
T3 - Longer term if the Oil run from 2000 to 2008 is any guide then Gold has a bit further to go...My suspicion is the gold market is higher today because of fears going into the weekend....people fear the same scenario as 2008 when the weekends would result is big bailouts and what not. However, I think we're in a different environment now and one of these weekends the fear will come out of the market. It seems to me that the fear is coming out of the CDS markets as well and that's a good gauge for the price of gold.
I'm only doing a short term trade on GLD btw. I have no way of valuing it but I'm seeing a H&S formation setting up and I believe a lot of fear is in the market surrounding the weekend, which I think will go away.
"Gold is going much higher LT if you can't stand the heat, get out."
Wouldn't think of it, just looking for the right place to add. ;)
Currently considering the neckline depending on what happens there, assuming it actually is tested.
Otherwise, I'm quite happy with my position as it stands. Not that I put much faith in Greenspan, I'm following the chart, but just yesterday he acknowledged that gold isn't in a bubble, and last week he told me the US has the option to print if necessary. HA!
Mark - I have no idea man...seems crazy that that would be the case. I think people are worried that the local deals sector is over saturated. My take is that the coupons/travel discount sector has been flooded for years though and TZOO has managed to pretty darn well.
My GLD short ain't working so well...However, I'm going to add a little more here at $176.68 for a total of 23% of my port...now short at avg of $175.95. I could get reemed on Monday/Tuesday but I think fear continues to subside.
Whoa...the local deals at TZOO are taking off man. I just updated my tracking list...I've now tracked it for 21 hours and in that time here is what I found:
In 21 hours for 49 cities (out of total of 75 cities) they have generated $232k total gross sales. In that amount is a listing for 14 different deals that could be purchased directly from the vendor so I couldn't account for these because it doesn't tell you how many people have ordered. For those I just used the average for all other listings in the 49 cities. If you extrapolate this over 24 hours and over 75 cities you get $406k in total gross sales for 1 day. Over 30 days it's $12.2 Million and over 3 months it's $36.6 Million. Assuming their commission is 30%, which is lower than the projected commission of 35% by analysts, you can arrive at $11MM in Net Sales.
If you assume the core business (non Local Deals) grows at 10% year over year, which is lower than the 5 year avg of about 15 to 20%, then you can arrive at an estimated $41.8 Million in sales Assuming moderate increases in Cost of Goods Sold and SG&A Expenses from last month, I get total expenses of $30.3 Million. Earnings b4 taxes would be $11.5 Million. After backing out taxes and dividing by shares outstanding you get $0.46 EPS.
Estimates are $39 Million and $0.38 EPS. Two possible upsides to my estimates are as follows: (1) Commission Rate is higher than 30%. If it is 35% then the sales and EPS would grow to $44 Million and $0.54 EPS.
(2) There were 10 deals that were removed from the site because they hit their maximum and I couldn't track these so I just removed them to my calculations. They could have generated more upside to my estimates.
I'm going to track these over the next week just to see how things are progressing and to make sure to account for sales jumps/drops over the weekend. But so far it looks very promising and it makes sense that the company is buying back stock.
"Why the hell aren't miners following this move in gold?"
Well, it seems miners are leading gold from a technical perspective. There are H&S formations everywhere, some more perfect than others. Even in gold(now forming right shoulder).
Look at H&S in HUI index(head April 8th, left shoulder Dec 6th, neckline 490), as well.
This won't end until the shoulder formation on gold fails to materialize, or if it does complete, the final battle will occur at the respective neckline(s).
Right now, I think everyone is anticipating a pullback in gold, to confirm the formation of the right shoulder. They'll be SOL if that doesn't happen, and longs will probably be looking to pile into miners too.
Gold - Left shoulder is Aug 10th, head is Aug 2nd. The neckline is positively sloped, which isn't the best case for bears, and the right shoulder is now higher than the left, something I wouldn't want to see if I were bearish.
Also, there's some consternation over the Aug 8th gap up that hasn't filled, on whether this is a measuring gap, which so far, it appears it is.
So in the case of gold, look for 1) failure to form right shoulder(bullish), 2) double top right shoulder(bearish), failure of neckline(bearish). The bearish factors would indicate a gap close and place gold back near the bottom of it's trading range. Some believe if that happened, gold would trade sideways at best, for years.
-It has been severely lagging and in no way acting like a high beta stock. This leads me to believe that it is either dead money or going lower. But wait, as a contrarian investor, I have to think that maybe this is a set up to lull us all to sleep.
-Weekly volume was up around 33% vs. the last 4 weeks which were all down weeks. TZOO made a new weekly low, tested it, and closed up 2.6% for the week on higher volume. Hmmm....
-Since June of 2009, TZOO has traded down to its 100 week sma on 3 separate occasions. Each one marked the low going forward. Today, it closed right on the 100 wma. Hmmm....
Gold H&S - The other problem I see with the current formation is that it's not symmetrical at all, after today's rally. Probably invalidates the H&S formation entirely and kinda gives the gold bulls an "coast is clear" signal...
A lot of people (including Cramer) have given up on the miners and are just buying GLD or physical.
Gold mining is a difficult business and often these companies miss estimates and costs are going through the roof cutting into margins. People are fed up with the stocks and trying to value them based on resource in the ground less costs to mine when the costs keep changing.
I think it is a sign of a narrowing market and would be cautious. Reminds me of 2007 when the overall market was going down, but I didn't think it was a big deal as my stocks were doing well as I was overweight commodities - that turned out to be a big mistake.
Jesse - I wouldn't read too much into the price action of TZOO...after looking into the trading of many high fliers over the years I've come to the conclusion that the stock could be completely disconnected from the reality of the company at many times, both up and down. For example, did you know that NFLX in 2004 traded down 76% from its high? At that point in time people figured it was done. It went up 30 fold from that point in just 6 years.
AMZN, BIDU, CMG, PCLN, you name the high flier...they have all had drops over over 70% and were written off for dead. But the fact is the underlying business just kept getting stronger and stronger and ultimately people were rewarded if they held on. All of them had huge short interest and operated in very competitive industries as well.
Is TZOO the next one? I honestly have no idea. But the company has had nothing but better and better earnings and revenues year after year.
Another silver miner joins the share buyback party:
NASDAQ: PAAS - News) ("Pan American" or the "Company") today announced that the Toronto Stock Exchange (the "TSX") has accepted the Company's notice of its intention to make a normal course issuer bid (the "Bid") to purchase up to 5,395,540 of its common shares,
BB - I'm negative on the furniture industry in general...but I guess it depends on the price. The wave of the future for furniture is: internet retailing trend toward modern design and away from conservative
So look for those that embrace those two trends...two mfgs we compete with are MLHR and KNL...they both have patent protection on some of their products and have been successful enforcing them...they're the big dogs in my industry. Just in looking at their charts and not knowing anything about their balance sheets, they have dropped quite a bit so perhaps now is a decent starting point.
Part of the reason I don't like furniture retailers and manufacturers is because everyone copies everyone's products and from my experience, a lot of patents / trademarks on design don't hold up in court...slight variations to products can alter the product enough to escape litigation. So internet retailers can pop up overnight and just sell a copy and the mfg / retailer can't do anything about it. It makes sense to me because the designs aren't exactly the same...but thats just me.
However, Knoll and Herman Miller have both been successful recently with lawsuits so maybe the trend is changing. I know this personally because my company was carrying a product line that we weren't aware was so similar to their products that they forced us to stop carrying. And one of my suppliers is in reorg after trying to fight with them in the courts, saying the original design has been in the public domain for 80 years and couldn't be trademarked (MLHR licensed it after the fact and tried enforcing it). It's a silly industry.
I figured I would go ahead and update my TZOO analysis for a full 24 hour period just to see how it updates and the revenues are actually slightly better than the amount I estimated just a few hours ago.
They generated $247k in sales in 49 cities. There were an additional 17 deals that involved direct purchases from vendors that I couldn't track so I just used the average for all other deals and arrived at an estimated $51k in sales for those. I again ignored the deals that were pulled off the site because they hit the vendor's maximum, even though this is pretty conservative. If I were to include them then it would be at least an extra $25k in revenues.
Anyway, I got $298k for 49 cities. They have an additional 26 cities that I am not accounting for. If I assume the average of all 49 cities and apply them to the remaining 26 then I get to $457k in gross sales for 1 day.
$457 x 30 days x 3 mnths = $41.1MM in gross sales.
Estimated commission rate is 35% but I am using 32% just to be conservative. With a 32% take I get $13.1 MM in net revenues.
Core revenues (excluding deals) were $28MM in this quarter last year. If I assume a 5% growth above that (even though rev growth rate is about 15-20% over past 5 years), I get total revs including deals of $42.6MM. After adjusting for an moderate increase in expenses over last quarter of $29.4MM, I get total expenses of $30.3MM.
$42.6 - $30.3 = $12.3 MM Net Inc before taxes. After taxes I get $7.96MM.
This equates to EPS of $.50 per share.
I need to see if they can keep this pace up but if they can I'm beginning to think that I need to load the boat on this stock. I'm being conservative in my above calculations and there could be a good deal of upside if commission rate is higher and core revenues grow faster. If they both are 35% and 12% core growth then I get EPS of $0.63, which is insane.
I think the company's local deals are gaining steam so perhaps I should account for July sales being slower than August which is slower than September. But even then the run rate right now should be roughly the average over the quarter.
I'd like to see how sales hold up over the weekend and the rest of the week, though.
If my base case is correct then $0.50 EPS x 4 quarters = $2.00 run rate. A company with this much growth should be trading at 40-50 times EPS, not 16 times...
Have you considered or taken into account refunds and/or cancelled sales (however small they would be)that would take place after you see the gross number of deals sold?
Also, wouldn't SG+A grow quite a bit more than modeled due to the big increase in staff quarter over quarter?
polytricks, a study in decoding ruling class propaganda:
“What is the good of having an economy which grows by 80% if your unemployment – people excluded from active economic life – goes from 420,000 to 5.1million?”
I don't know, man. I wouldn't want to be short going into Friday.
ReplyDelete2nd - I think today was a setup day man...my guess is bear trap
ReplyDelete$INDU - Although it could go either way and the market is going to do what it's going to do, this chart doesn't look so bad to me, like it's ready for a rally:
ReplyDeletehttp://stockcharts.com/c-sc/sc?s=$indu&p=D&yr=0&mn=7&dy=0&i=p99295968853&a=217994610&r=7736
Copper and Oil both look like they have more room to run
ReplyDeleteGold - Note the double top on the green ADX indicator on this chart:
ReplyDeletehttp://stockcharts.com/c-sc/sc?s=$gold&p=D&yr=0&mn=7&dy=0&i=p99295968853&a=217994610&r=7736
It's my opinion that large brokerage firms sold off a few positions today in order to raise enough cash to jack the indexes tomorrow.
ReplyDeleteWhat happened to traders who shorted AAPL after hours Wednesday at 356?
ReplyDelete2nd - I wouldn't be shocked if we rally to 1,200 tomorrow. I'd be worried if we ran hard today.
ReplyDelete"Copper and Oil both look like they have more room to run"
ReplyDeleteThe inverse correlation with gold needs to reverse in favor of copper and oil, I'd like to see gold find support around $1675 minimum, don't want that Aug 8th gap to close.
Of course, my opinion and $3 will buy you a doppio at SBUX.
ReplyDeleteCopper/oil - Take a glance at these charts, copper looks primed and oil no so bad:
ReplyDeletehttp://stockcharts.com/c-sc/sc?s=$copper&p=D&yr=0&mn=7&dy=0&i=p99295968853&a=217994610&r=7736
http://stockcharts.com/c-sc/sc?s=$copper&p=D&yr=0&mn=7&dy=0&i=p99295968853&a=217994610&r=7736
Based on what I see in the charts, tomorrow seems to be a make or break day.
ReplyDeleteWe still haven't tested the 10,500 level I'd anticipated, could be one heck of a fakeout day if we tested that tomorrow for an intraday reversal and possible green close?
TNA:SSO = 0.991
ReplyDeletehttp://stockcharts.com/c-sc/sc?s=TNA:SSO&p=D&yr=0&mn=7&dy=0&i=p99295968853&a=217994610&r=7 736
one things for sure...we break below 1,140 ES for more than an hour and I'm out.
ReplyDeleteMore insider buying filed after the close.
ReplyDeleteBAS $300k more
TEX $30 k more
TOF- I'm confused about your comment re- MITK about the JPM $'s. They were deferred in Dec. 2010 and according to the 2Q 10K they have completed the contract and realized the revenue. Where do you see the duplicity?
ReplyDeleteI'm also trying to figure out how much money is directly from the channel partners, any re-loads, and how much from direct deals. I'm guessing they might have given JPM a sweetheart deal to get them on board.
Any ideas?
Guys. Take a look at the insider buying for XCO. Man, that's some real $'s...100's of millions.
ReplyDeleteXCO - yep, there was some selling too, it seems.
ReplyDeleteSeller - MILLER DOUGLAS H Chairman and CEO
*(US) FED CHAIRMAN BERNANKE:
ReplyDeleteSubmitted by Vadym Graifer (2283 comments) on Fri, 08/26/2011 - 10:05 #93320
*(US) FED CHAIRMAN BERNANKE: FED WILL DO WHAT IS NEEDED TO ASSIST RECOVERY; FED POLICY CANNOT DO MUCH TO ALTER ECONOMY'S LONG-TERM TREND - JACKSON HOLE SPEECH
- Reiterates that the Fed possesses the tools necessary to aid the economy.
- Notes that Fed will meet for two days instead of one in September, to consider moves to provide additional monetary stimulus and other issues at that time.
- The US needs to develop better fiscal decision making processes.
- Pace of economic recovery has been slower than hoped, still sees better growth over the second half of 2011. The global economy is generating significant growth.
- Still expects inflation to be at or below target rate of 2%.
Non-event.
ReplyDeleteI know today is a crucial day and what not but I think the more important question is:
ReplyDeleteWill the Giants repeat again this year?
Mark - From what I read in the 10k for last year, MITK stated that they were going to defer revenues from Chase until after all services were executed. They already implied that Mobile Bill Pay was one of the services they signed up for...since that hasn't been signed on to by Chase then it makes me wonder if the companies recognized the deferred revenues in part to help good revenues for the quarter.
ReplyDeleteAlso, I don't like that they are recognizing revenues up front when a client signs on...the implies that there won't be a big bump in revs when BAC/COF launch. So it makes me question just how much money they're making on each deposit/user.
I went through the pain of tracking all of the orders placed through TZOO's local deals segment and it looks pretty impressive. Here is what I found:
ReplyDelete*Over 8 hour period $75,015 in gross sales were made in 49 cities. That's about $225k per day. They have 75 total cities launched right now. So that would be $344,450 per day for all 75 cities, which extrapolates to $32,030,000 for a quarter.
Assuming a commission rate of 32%, which is below estimates of 35%, their take would be $10,250,000 for the quarter.
You need to add this to their core business. The core business generated $28MM in revs last year this quarter. I assumed a 10% growth rate year over year, which is pretty conservative given their 5 year growth rate has been about 20%.
So that would come to $10.3MM + (28 x 1.1) = $41MM.
If you back out Cost of Goods Sold of $2.5 MM (last qtr was $2.4 MM) and then overhead costs of $27.8 MM (last quarter was around $27.4MM), you arrive at a net income figure of $10.75MM for q3. After backing out taxes and dividing by shares outstanding you get $0.43 EPS.
So $41MM and $0.43 EPS. The estimates are $39 MM and $0.38 EPS.
This company seems downright cheap to me. The EPS run rate is around $1.70 right now if my numbers are correct and the revenue growth rate is about 40%+. They haven't fully launched all of their cities and expect to launch another 25 cities by year end. There is a significant amount of room to grow this business and I can project EPS of at least $3/share after it's Local Deals service is fullly launched. Having 24 Million subscribers and growing is perfect for offering this local deals service.
I think this company could very easily be back up to $100 in the next 12 months.
TOF- Yeah, I thought the same thing and it was asked about in the con. call. In the latest 10Q they say all services to Chase are complete. They have also said a major bank is going to use mobile bill pay by EOY. Maybe it's not Chase?
ReplyDeleteYour right though. It's difficult to determine their revenue stream.
Good analysis TOF. Are you taking into consideration a big downturn in sales rate during the overnight hours? Perhaps on the weekends if TZOO does not send out local deals on the weekend (I'm not sure if they do or not). These could have a dramatic effect if trying to just extrapolate from an 8 hour period during peak sales hours.
ReplyDeleteTZOO - That's a pretty compelling argument, $100 would be an impressive gain from here.
ReplyDeleteOil - If the world were all to consume energy at the same level as Americans, demand would be 4x. Yet oil trades at $85 today.
ReplyDeleteSilver - Some say this metal is headed towards becoming the first metal on the periodic table to become extinct.
I saw the Zodiac stepping out of a cab around the corner.
ReplyDeleteBrownie, you're doing a heck of a job!
ReplyDeleteVIX off 5 bucks from it's high's today.
ReplyDeleteOK, got to run.
Jesse - I did the analysis from 4PM to 12AM...I noticed that some of the deals I was tracking had been pulled from the site most likely because the vendor sold a pre-determined amount so I most likely actually missed out on more sales.
ReplyDeleteAnyway, my results come to roughly the same conclusion that I've read from other people. In fact, the company came out and said they are on track exceed $100 Million in Annualized Gross Revenues on Local Deals, which would equate to greater than $25 MM per quarter.
I'll keep tracking and let you know what I found.
By the way, I'm glad I waited for an hourly break of 1,140 ES. I had a feeling this move down was a fakeout.
MLK memorial dedication is postponed due to approaching hurricane per Harry Johnson, head of memorial foundation.
ReplyDeleteIf I was a gold bull I would be pretty nervous.
ReplyDeleteGold - I'm anticipating gold will be taken down on Sunday.
ReplyDeleteBut you didn't mention why you'd be nervous, so I'm not mentioning why I think gold gets hit Sunday.
CP - I guess it all comes down to Europe, but it sure seems like the momentum is waning. I noticed CDS spreads dropped a decent amount yesterday despite a selloff in the equities markets, which is a sign that the crisis may be easing...thus, the fundamental reason for a bit more short term pullback in Gold
ReplyDeleteHurdy Gurdy Man.
ReplyDeleteEuro zone, if we get some god news here, we could rip on Monday.
ReplyDeleteThe most important speech my well be delivered on Saturday by Jean Claude Trichet. The ECB president has made two mistakes by raising overnight rates during the European credit crisis. As the equity values of Europe’s banks have been crushed and the fear of a Lehmanesque type of banking debacle rising, it will be important to hear if Trichet has any plans to aid the troubled banks by moving to push for a higher level of money for the EFSF.The buying of troubled sovereigns by the ECB also needs to be enhanced so as to remove funding pressures arising from greater haircuts on the troubled sovereigns. I am sure that Trichet is getting an earful from the gathering of the world’s top monetary policy makers. Will Trichet attempt to raise his stature as he nears the end of his ECB Presidency. November 1 is quickly approaching.
Surf's up all week, going out today and Mon or Tues. Yeah Baby!
ReplyDeletehttp://www.surfnewsnetwork.com/index.php?content_id=37&photo_id=25764&photo_typeid=10
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Wow the trend line in ES from the bottom 3 weeks ago was hit exactly to the T this morning and it bounced hard. Given this it's highly likely we retest the 1,200ish highs from last week.
ReplyDeleteSold WPRT, bumping up against 50 dma.
ReplyDeleteBuying more MDW, positive drill intercepts.
GMO is -17% from last sale may buy back.
TZOO nice seven day base
10:05 going to boogie in the deep blue sea.
Gold The reason I think gold may take a dive on Sunday is because the trading will be thin due to one of the exchanges being closed.
ReplyDeletePM's are under severe short attack right now, they're going to use this opportunity to take some wind from the sails.
Gold Map
ReplyDelete1917-1705=212
212*.618=131
1705+131=1836 st Resistance
212*.382=81
1705+81=1786
where we trading? imagine that, traders rule.
BTW, if you are a gold nervous nellie there are you sell points.
ReplyDeleteGold, I'm not nervous and going to higher peaks.
ReplyDeleteDavid, do not let the ice worms get ya!
T3 - Longer term if the Oil run from 2000 to 2008 is any guide then Gold has a bit further to go...My suspicion is the gold market is higher today because of fears going into the weekend....people fear the same scenario as 2008 when the weekends would result is big bailouts and what not. However, I think we're in a different environment now and one of these weekends the fear will come out of the market. It seems to me that the fear is coming out of the CDS markets as well and that's a good gauge for the price of gold.
ReplyDeletehttp://www.youtube.com/watch?v=tKEVe-Y6Wqw
ReplyDeletehttp://www.youtube.com/watch?v=aVhAEUiuFsQ
http://en.wikipedia.org/wiki/Ice_worm
Gold - Looks like an H&S pattern forming? If so, that might put it back to the 144SMA...
ReplyDeleteIn that case, wouldn't a takedown on Sunday screw this formation up?
I'm going find me a mermaid today.
ReplyDeletehttp://www.youtube.com/watch?v=X9YMU0WeBwU&feature=musicchart
Gold is going much higher LT if you can't stand the heat, get out.
ReplyDeletehttp://www.youtube.com/watch?v=EqnKt19ds6U&feature=related
A aggressive trade and probably wrong trade is to go ES short right here
ReplyDeleteT3 > Too many ppl doubt this move and expect a collapse in Europe over the weekend. Equities will most likely gap higher on Monday.
ReplyDeleteActually I expect a Trichet save this weekend and rally Monday rally.
ReplyDeletehttp://www.youtube.com/watch?v=h81Ojd3d2rY
Mama Cass is hot.
Sold BTU at $46.98 from $41.8 earlier in the week.
ReplyDeleteSP starting to slip slide away
ReplyDeletehttp://www.youtube.com/watch?v=vRkvSBMoGh0
Short GLD $175.51
ReplyDeleteAdded more GLD short at $175.8...now 7% of portfolio.
ReplyDeleteAdded more GLD short at $175.95...now 10% of port
ReplyDeleteAdded more GLD short $176. Now 13% of port.
ReplyDeleteI'm only doing a short term trade on GLD btw. I have no way of valuing it but I'm seeing a H&S formation setting up and I believe a lot of fear is in the market surrounding the weekend, which I think will go away.
ReplyDelete"Gold is going much higher LT if you can't stand the heat, get out."
ReplyDeleteWouldn't think of it, just looking for the right place to add. ;)
Currently considering the neckline depending on what happens there, assuming it actually is tested.
Otherwise, I'm quite happy with my position as it stands. Not that I put much faith in Greenspan, I'm following the chart, but just yesterday he acknowledged that gold isn't in a bubble, and last week he told me the US has the option to print if necessary. HA!
Added more GLD short at $175.85...avg is $175.82. 20% of port
ReplyDeleteDarn, I'm a fool...It was COOL all along.
ReplyDeleteI believe I said I would add at 1550 if it got there which would be a gift.
ReplyDeleteGold stocks are out of whack in relation to gold price. GLD effect?
Some gold charts have excellent weekly formations AEM KGC
Shorting gold...Go getem bro!
ReplyDeleteadd MDW to that list
ReplyDeleteTOF most likely right here, gold traders should take off at 1813 longs. timeframe is everything
ReplyDeleteSchool's out, lator gators.
ReplyDeletehttp://www.youtube.com/watch?v=OUugQoxS8_o&feature=related
TOF- Do you think the short data is correct on TZOO?
ReplyDeleteMDW- Yeah, that ones been great.
ReplyDeleteWhat Saying Nothing Does to Gold, Copper, Silver & Oil:
ReplyDeleteOK, no helicopters dropping money...yet.
CP- Why the hell aren't miners following this move in gold?
ReplyDeleteMark - I have no idea man...seems crazy that that would be the case. I think people are worried that the local deals sector is over saturated. My take is that the coupons/travel discount sector has been flooded for years though and TZOO has managed to pretty darn well.
ReplyDeleteMy GLD short ain't working so well...However, I'm going to add a little more here at $176.68 for a total of 23% of my port...now short at avg of $175.95. I could get reemed on Monday/Tuesday but I think fear continues to subside.
Whoa...the local deals at TZOO are taking off man. I just updated my tracking list...I've now tracked it for 21 hours and in that time here is what I found:
ReplyDeleteIn 21 hours for 49 cities (out of total of 75 cities) they have generated $232k total gross sales. In that amount is a listing for 14 different deals that could be purchased directly from the vendor so I couldn't account for these because it doesn't tell you how many people have ordered. For those I just used the average for all other listings in the 49 cities. If you extrapolate this over 24 hours and over 75 cities you get $406k in total gross sales for 1 day. Over 30 days it's $12.2 Million and over 3 months it's $36.6 Million. Assuming their commission is 30%, which is lower than the projected commission of 35% by analysts, you can arrive at $11MM in Net Sales.
If you assume the core business (non Local Deals) grows at 10% year over year, which is lower than the 5 year avg of about 15 to 20%, then you can arrive at an estimated $41.8 Million in sales Assuming moderate increases in Cost of Goods Sold and SG&A Expenses from last month, I get total expenses of $30.3 Million. Earnings b4 taxes would be $11.5 Million. After backing out taxes and dividing by shares outstanding you get $0.46 EPS.
Estimates are $39 Million and $0.38 EPS. Two possible upsides to my estimates are as follows:
(1) Commission Rate is higher than 30%. If it is 35% then the sales and EPS would grow to $44 Million and $0.54 EPS.
(2) There were 10 deals that were removed from the site because they hit their maximum and I couldn't track these so I just removed them to my calculations. They could have generated more upside to my estimates.
I'm going to track these over the next week just to see how things are progressing and to make sure to account for sales jumps/drops over the weekend. But so far it looks very promising and it makes sense that the company is buying back stock.
"Why the hell aren't miners following this move in gold?"
ReplyDeleteWell, it seems miners are leading gold from a technical perspective. There are H&S formations everywhere, some more perfect than others. Even in gold(now forming right shoulder).
Look at H&S in HUI index(head April 8th, left shoulder Dec 6th, neckline 490), as well.
This won't end until the shoulder formation on gold fails to materialize, or if it does complete, the final battle will occur at the respective neckline(s).
Right now, I think everyone is anticipating a pullback in gold, to confirm the formation of the right shoulder. They'll be SOL if that doesn't happen, and longs will probably be looking to pile into miners too.
We'll see...
Gold - Left shoulder is Aug 10th, head is Aug 2nd. The neckline is positively sloped, which isn't the best case for bears, and the right shoulder is now higher than the left, something I wouldn't want to see if I were bearish.
ReplyDeleteAlso, there's some consternation over the Aug 8th gap up that hasn't filled, on whether this is a measuring gap, which so far, it appears it is.
So in the case of gold, look for 1) failure to form right shoulder(bullish), 2) double top right shoulder(bearish), failure of neckline(bearish). The bearish factors would indicate a gap close and place gold back near the bottom of it's trading range. Some believe if that happened, gold would trade sideways at best, for years.
Sorry, gold head is Aug 22th.
ReplyDeleteTZOO notes:
ReplyDelete-It has been severely lagging and in no way acting like a high beta stock. This leads me to believe that it is either dead money or going lower. But wait, as a contrarian investor, I have to think that maybe this is a set up to lull us all to sleep.
-Weekly volume was up around 33% vs. the last 4 weeks which were all down weeks. TZOO made a new weekly low, tested it, and closed up 2.6% for the week on higher volume. Hmmm....
-Since June of 2009, TZOO has traded down to its 100 week sma on 3 separate occasions. Each one marked the low going forward. Today, it closed right on the 100 wma. Hmmm....
At least we know where the line in the sand is:)
Gold H&S - The other problem I see with the current formation is that it's not symmetrical at all, after today's rally. Probably invalidates the H&S formation entirely and kinda gives the gold bulls an "coast is clear" signal...
ReplyDeleteA lot of people (including Cramer) have given up on the miners and are just buying GLD or physical.
ReplyDeleteGold mining is a difficult business and often these companies miss estimates and costs are going through the roof cutting into margins. People are fed up with the stocks and trying to value them based on resource in the ground less costs to mine when the costs keep changing.
I think it is a sign of a narrowing market and would be cautious. Reminds me of 2007 when the overall market was going down, but I didn't think it was a big deal as my stocks were doing well as I was overweight commodities - that turned out to be a big mistake.
I added one last nugget of GLD short at $178 after hours and it now makes up 26% of my port. My avg is now $176.2.
ReplyDeleteI'm assuming the fetal position...although at 1/4 of my port even with a 5% move I'm out 1.25%.
Jesse - I wouldn't read too much into the price action of TZOO...after looking into the trading of many high fliers over the years I've come to the conclusion that the stock could be completely disconnected from the reality of the company at many times, both up and down. For example, did you know that NFLX in 2004 traded down 76% from its high? At that point in time people figured it was done. It went up 30 fold from that point in just 6 years.
ReplyDeleteAMZN, BIDU, CMG, PCLN, you name the high flier...they have all had drops over over 70% and were written off for dead. But the fact is the underlying business just kept getting stronger and stronger and ultimately people were rewarded if they held on. All of them had huge short interest and operated in very competitive industries as well.
Is TZOO the next one? I honestly have no idea. But the company has had nothing but better and better earnings and revenues year after year.
TOF, following up on yesterday, what do you think about furniture manufacturers as opposed to retailers as an investment?
ReplyDeleteAnother silver miner joins the share buyback party:
ReplyDeleteNASDAQ: PAAS - News) ("Pan American" or the "Company") today announced that the Toronto Stock Exchange (the "TSX") has accepted the Company's notice of its intention to make a normal course issuer bid (the "Bid") to purchase up to 5,395,540 of its common shares,
BB - I'm negative on the furniture industry in general...but I guess it depends on the price. The wave of the future for furniture is:
ReplyDeleteinternet retailing
trend toward modern design and away from conservative
So look for those that embrace those two trends...two mfgs we compete with are MLHR and KNL...they both have patent protection on some of their products and have been successful enforcing them...they're the big dogs in my industry. Just in looking at their charts and not knowing anything about their balance sheets, they have dropped quite a bit so perhaps now is a decent starting point.
Part of the reason I don't like furniture retailers and manufacturers is because everyone copies everyone's products and from my experience, a lot of patents / trademarks on design don't hold up in court...slight variations to products can alter the product enough to escape litigation. So internet retailers can pop up overnight and just sell a copy and the mfg / retailer can't do anything about it. It makes sense to me because the designs aren't exactly the same...but thats just me.
ReplyDeleteHowever, Knoll and Herman Miller have both been successful recently with lawsuits so maybe the trend is changing. I know this personally because my company was carrying a product line that we weren't aware was so similar to their products that they forced us to stop carrying. And one of my suppliers is in reorg after trying to fight with them in the courts, saying the original design has been in the public domain for 80 years and couldn't be trademarked (MLHR licensed it after the fact and tried enforcing it). It's a silly industry.
I figured I would go ahead and update my TZOO analysis for a full 24 hour period just to see how it updates and the revenues are actually slightly better than the amount I estimated just a few hours ago.
ReplyDeleteThey generated $247k in sales in 49 cities. There were an additional 17 deals that involved direct purchases from vendors that I couldn't track so I just used the average for all other deals and arrived at an estimated $51k in sales for those. I again ignored the deals that were pulled off the site because they hit the vendor's maximum, even though this is pretty conservative. If I were to include them then it would be at least an extra $25k in revenues.
Anyway, I got $298k for 49 cities. They have an additional 26 cities that I am not accounting for. If I assume the average of all 49 cities and apply them to the remaining 26 then I get to $457k in gross sales for 1 day.
$457 x 30 days x 3 mnths = $41.1MM in gross sales.
Estimated commission rate is 35% but I am using 32% just to be conservative. With a 32% take I get $13.1 MM in net revenues.
Core revenues (excluding deals) were $28MM in this quarter last year. If I assume a 5% growth above that (even though rev growth rate is about 15-20% over past 5 years), I get total revs including deals of $42.6MM. After adjusting for an moderate increase in expenses over last quarter of $29.4MM, I get total expenses of $30.3MM.
$42.6 - $30.3 = $12.3 MM Net Inc before taxes.
After taxes I get $7.96MM.
This equates to EPS of $.50 per share.
I need to see if they can keep this pace up but if they can I'm beginning to think that I need to load the boat on this stock. I'm being conservative in my above calculations and there could be a good deal of upside if commission rate is higher and core revenues grow faster. If they both are 35% and 12% core growth then I get EPS of $0.63, which is insane.
I think the company's local deals are gaining steam so perhaps I should account for July sales being slower than August which is slower than September. But even then the run rate right now should be roughly the average over the quarter.
I'd like to see how sales hold up over the weekend and the rest of the week, though.
If my base case is correct then $0.50 EPS x 4 quarters = $2.00 run rate. A company with this much growth should be trading at 40-50 times EPS, not 16 times...
Awesome analysis TOF!
ReplyDeleteHave you considered or taken into account refunds and/or cancelled sales (however small they would be)that would take place after you see the gross number of deals sold?
Also, wouldn't SG+A grow quite a bit more than modeled due to the big increase in staff quarter over quarter?
Nice job.
polytricks, a study in decoding ruling class propaganda:
ReplyDelete“What is the good of having an economy which grows by 80% if your unemployment – people excluded from active economic life – goes from 420,000 to 5.1million?”
http://polytricks.wordpress.com/1994/11/15/goldsmith-rose/