Investools SWIM just got clobbered on an SEC inquiry and earnings miss. Aside from the bad news revenue was up 66 percent and ahead of estimates driven by Think or Swim. I think their product Investools is a little exploitative. The only reason I'm actually looking at the stock here is because of Think or Swim. It is their brokerage business they bought just over a year ago and it is doing extremely well. Revenue at Think or Swim was up 109% year over year. The board has even approved that Investools change the name of the company to Think or Swim. This is going to happen by year end according to their conference call.

The opportunity in this sector is a historic transfer of wealth that is occurring as baby-boomers are retiring. For the brokerages, I think poor conditions in the US stock market might be off-set by this huge populations of individuals managing their own money. Think or Swim's business has been gangbusters regardless.

That macro story isn't even the play I'm looking at here with SWIM. This kind of over-reaction can be an investors dream because the uncertainty is high with this SEC inquiry but the risk of buying Investools at a big discount is probably very small. The fear in the market creates buying opportunities. The deal I'd like to see here is if the stock falls to below a conservative value of the Think or Swim segment itself. The SEC trouble could be a thing of the past in months and Think or Swim will have new accounts opening up every day. Think or Swim is also sponsoring CNBC's big stock picking contest and has a big ad campaign.

The whole company sells for around $540 million right now in the $8 a share range. I figure Think or Swim is worth conservatively $6 to $8 a share based on last years revenue of $110 million. The $6 to $8 a share is based on a multiple of only 4 times sales. TD Ameritrades AMTD goes for around 5 times sales, OptionsXpress (OXPS) 5.9, and Charles Schwab (SCHW) is selling for about 5 times sales. I have mixed feelings about their Investools but below $7 a share SWIM looks hard to pass up.

Edit: Just weeks after this post Think or Swim ran to the $9's and eventually got bought out by TD Ameritrade.


full disclosure: no position in any stocks mentioned.
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Check out the the articles at Finance ViewPoint . My look at BDR and one of the worst websites and best stock is there.

I still don't know what great new development GOLF is seeing as the stock is up huge again today so it is still a good short scalp if it falls 4-5%. Down atleast 3% after hrs.


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The stock spiked over 20% Friday and I can't find any good reason for it in the news. It would take a buyout offer or some kind of amazing news to stay above $1.95-2.00 for long. I don't know where it is going to open Monday after the after market Friday and pre-market but if it is over $2.00 or so and still nose diving it looks like a good short day trade.

full disclosure: no position
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Anybody catch PDO like I said. Stock fell to about $6.50.


Those kind of big moves are rarely sustainable. A good plan in general is to short unsustainable greed and buy stupid fear.

full disclosure:no position
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HANS has been selling off since hitting highs in the upper 60's last year. The stock sells for $35 as of today. A good thing about the company is they don't have any long-term debt and they haven't needed any so far. They announced in late April just after hitting a 52 week low they are buying back $200 million worth of stock. Looks like the falling stock is just a needed valuation contraction from its bubbled up 30 times earnings and 40 times cash flow last year. It might be a good deal here but it looks more fairly valued. I'd rather wait and see if it comes down to the mid 20's and see what this earnings call on the 7th brings. Let's see if I'm on to Hansen like I was onto Smith & Wesson (SWHC)last December. And the technicals people say don't try and predict a reversal. That is why you should think with your brain and don't let a chart do all the thinking for you. I think charts are great for day trading and very short-term but longer-term you have to think about what it is you are actually trading.

full disclosure:no position in HANS


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How's this for a company name? Blonder Tongue Laboratories Inc. (BDR). They are a $9 million company. I would have liked to have been in the room when they brainstormed the names. The Company designs, manufactures, and supplies a comprehensive line of equipment to deliver video (analog & digital), high speed data and voice services over integrated coaxial and fiber optic broadband networks today and over packet based, Internet protocol networks of the future. They are dumping the subsidiary Hybrid Networks to focus on their core business. Their earnings might be really nice as the switch is made to digital in the years coming up.

Some Potential
They have been buying back shares for the past couple years reducing their share count. Probably a good deal for shareholders as the stock is trading around Net Current Asset Value. Revenue growth has been ugly. Down 7% in 2007. They came out of the red in 2006 to earn $.05 but struggle again. If getting rid of all these non-core subs work they could bring in some decent gross margins and maybe even earnings growth. Gross margins have averaged 34% in 2007. I like the $1.64 million in free cash flow last year.

Yep, margins are improving..
"Commenting on the third quarter 2007 results, James A. Luksch, Chief Executive Officer, said, "Our China initiative remains on course and during the third quarter we started to realize noticeable benefits from reduced costs due to this effort. This is evidenced by the fact that our gross margin on sales of products improved from 36.3% in the second quarter of 2007 (after giving effect to our increase in inventory reserves) to 37.7% in the third quarter of 2007. We anticipate further improvements in gross margin in the fourth quarter of 2007 and continuing into 2008. Our third quarter sales were higher as compared to the prior year and we continued to show improvement sequentially as our third quarter sales in 2007 were approximately 14% higher than the second quarter of 2007."
The Release

Maybe a good play from their filing...
The cable market has reacted quickly to consumer demands for additional services by integrating multiple technologies into their existing networks to provide consumers high-speed data and telephony in addition to video offerings. Telephone companies have also entered this competitive arena by upgrading their existing distribution networks, enabling them to be able to provide video and high-speed data in addition to telephony offerings. As a result of these market forces, the lodging and institutional markets are now playing catch up in order to meet consumers’ expectations that these services be available, and are installing new infrastructure and upgrading existing networks. This is a significant area of opportunity for the Company to market and sell it’s core product line.

Most of the changes in the market segments that the Company serves have recently been focused on the transition to digital technologies. One of the most promising areas is Internet Protocol Television (“IPTV”), an emerging technology that allows viewers to access broadcast network channels, subscriber services and movies-on-demand. This technology is already experiencing full scale commercialization in international markets such as Hong Kong, Italy and France. The worldwide market projections are impressive with an estimated 62 million subscribers subscribing to IPTV services by 2010. The Company has negotiated license agreements that will provide entry into this promising market, and is currently developing products to meet the needs of customers in the markets that it serves.

Eternal Technologies (ETLT) webmaster still struggles with English

"Company Will Disclose Financial Data Periodic

In order to let all shareholders know our financial manage result in each quarter timely, company decide to disclose some un-audit manage data on our website from this quarter in 2008."

The website layout is different now. Better but weird. Notice the "hot" text on the right. The company is definitely undervalued and still has good fundamentals.


full disclosure: no position in BDR. long Eternal Technologies ETLT
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photo of 200 million dollars



If you like picking stocks check out CNBC's .. Apparently, they have a lot more prizes now including 250k to the winner. I can't top that with mine but if you are trying to build a retirement account with good mutual funds register and shoot me that email with your pick and I'll extend the start date.

STOCK-TRAK GROUP STKG.OB owns Wallstreetsurvivor.com another free stock contest site. The industry is growing really fast according to their website. STKG's most recent report didn't look very good to me right now. They have good revenue growth and growing shareholder equity but haven't had a penny of profitability in at least 3 years. Looks like a watch and wait right now. The stock also has very light volume so it would probably just make you sick for a long time before it made you a lot of money.


full disclosure: no position in STKG
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