RadiSys Corporation (RSYS): Racing Toward A Radical Drop
by Sonya Colberg, Senior Editor, 6/30/2016 9:58:59 AM
All the good news has already been priced into RadiSys Corporation (NASDAQ: RSYS), creating a perfect jumping off point.
Now RadiSys looks poised for a radical hit.
The Hillsboro, Oregon-based computer server company has turned in consistent net losses for years. But the stock went ballistic recently when the company named Verizon as the customer that earlier placed a DCEngine trial order. RadiSys had hinted at the identity at least four months before. But the June 7 announcement kicked the stock out of sight.
So ... the announcement is the first reason TheStreetSweeper believes RadiSys has become radically overpriced and doomed to drop (other viewpoints here):
*1. Good News: Already Acknowleged
RadiSys investors had kicked the stock in the pants following its quarterly financial report released in May.
Investors were not pleased to learn that gross margins had dropped again year-over-year and sequential earnings losses had worsened.
So the customer announcement weeks later about the DCEngine server for the phone company worked beautifully to juice the stock by about 70%.
But RadiSys can't hold up under such a frothy valuation.
*2. Legacy Biz: Help Me, Help Me!
The RadiSys rise is unsustainable as sales continue their perilous downward spiral. Part of the problem is that 75% of the company's revenue comes from its old-line server business.
Unfortunately, this legacy business segment is dropping, dropping, dropping...
The sales dropped 15% in 2015 and 21% the year before.
Hmmm. What if Shark Tank's Mark Cuban scratched his chin and blurted:
"What's your margins?"
RadiSys would have to stammer out something like:
"Our margins are declining... Like crazy."
This chart below is a snapshot from a company presentation.
(Source: RadiSys presentation)
The chart shows that the company's legacy business "Embedded Products" has been enduring 24% to 20% margins for 1 1/2 years. And last quarter's margins dropped all the way down to 15%.
*3. Paltry Help: New Kid, DCEngine
Copart (CPRT): Five Reasons To Terminate This Stock
by Sonya Colberg, Senior Editor, 6/28/2016 10:01:38 AM
Copart (Nasdaq: CPRT) has barely felt the losses now running cyborg-like through auto stocks after the British exit vote.
But that will quickly change.
As soon as the Copart double-digit exposure to the United Kingdom market becomes evident, even the Terminator himself could be expected to turn tail and run from this stock.
Copart is in the online junk-car business. The Dallas-based company sells recycled scrap cars to the public, vehicle dismantlers, exporters, etc. in the United States and elsewhere, including Britain.
Britain voted Thursday to exit from the European Union. Stock losses are extending as global markets consider the potential economic turmoil and the uncertainties. Now Copart is vulnerable ...
*About 18.7% of Copart revenue faces exposure to European concerns.
*Brexit is expected to exacerbate Europe’s declining used car sales.
*Any economic squeeze can cut driving, accident claims and Copart’s business.
*A sluggish economy also creates more uninsured drivers who typically just fix their cars, meaning fewer cars for Copart to salvage out.
*Since the Brexit vote, other auto stocks have suffered double-digit declines.
*Copart has ~$137m in cash … and a $96 million “demand for payment” of back taxes and penalties.
* Insiders are selling their stock.
JAMN Finally Spills the Beans -- And It's an Ugly Mess
by Janice Shell, 6/2/2011 10:32:51 AM
To be sure, the 10-K offered investors little reason to sing. For starters, the filing reveals, this once-hot “coffee company” sells no coffee of its own at all. JAMN relies on a supplier based in frigid Canada – far away from the tropical Jamaican home of its co-founder Rohan Marley – to provide the company with an actual product to sell to its customers instead.
Back in April of 2010, JAMN inked a “supply and toll agreement” with Canterbury Coffee of British Columbia that gave it access to some brew. According to that agreement, JAMN relies on Canterbury to fulfill every role – save a minor one – normally satisfied by a firm that classifies itself as a coffee company. Canterbury purchases the coffee beans. It roasts them. And it then packages them in bags supplied by JAMN – the company’s only real product – for sale to the public.
JAMN signed this deal more than a year ago, right before Shane Whittle – a notorious Vancouver stock promoter – officially resigned as CEO of the company. But the company never mentioned that agreement, seemingly material enough to warrant at least a quiet 8-K report, in a single regulatory filing until now.
Jammin Java (JAMN): Hot Stock ... Bitter Aftertaste?
by Janice Shell, 6/2/2011 10:30:25 AM
It’s time to wake up and smell the coffee! That’s exactly what Jammin Java (OTC: JAMN.OB), a heavily promotedcoffee company, and – for very different reasons – TheStreetSweeper would like investors to do.
Since the beginning of the year, JAMN has miraculously risen from the ashes of the “Grey Market” graveyard to become one of the liveliest – and richest – stocks in the entire microcap arena. JAMN has seen its stock shoot straight toward heaven, soaring from 55 cents to peak above $6 a share on massive daily volume, with its market value nowtopping $355 million despite the company’s limited resources and operating history. (As covered in more detail below, two of the Internet tout sheets pushing JAMN the hardest effectively vanished -- disabled by their Internet servers -- on the day the stock’s trading volume exploded past 20 million shares.)
CCME: Few Signs of Life at 'Healthy' Chinese Firm
by Roddy Boyd, 3/23/2011 9:30:34 AM
Also, and this cannot be understated, hanging out on a sidewalk in Fujian–the sidewalks double as parking spots when the streets, which appeared to have been designed in the Han Dynasty, fill up–was not a viable option. There was also the matter of the world-class headache the Financial Investigator was developing from Fuzhou’s diabolical smell, an epic conflation of poor sewage treatment, air pollution and the smell of cabbage that made getting the hell off Dongjie street a matter of vital importance.
The Financial Investigator and his traveling companion for the trip, an American investor with extensive experience in China, decided to head upstairs despite our interview with the CFO having been cancelled at the last minute (with no explanation given.) We thought a quick tour of the offices and meeting a few other executives might open our eyes to a few things.
Though the language barrier was a little steep with the young receptionist–when we asked for writing paper, she provided Kleenex–we were in short order shown to their conference room and told to wait. It did not escape notice that pride of place in the conference room belonged to a framed certificate of participation from the Fall 2010 Rodman & Renshaw conference, the World Cup for reverse merger companies and the pumpers and touts who peddle them.
Eventually chief operating officer James Yu came down and after spending 30 minutes trying to understand who we were, concluded that giving us a tour wouldn’t hurt. Soon enough, his colleague, Vinne Ye–the chairman’s assistant–came out and took us around.
It was most eye-opening.more...
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