don barrett

You can't be Sirius!

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The major players in the pay to listen radio market,Sirius and XM Satellite Radio,are trying,but neither has turned a profit to date. Automobile radio systems have evolved from the old am mono speaker system to intricate am-fm-multi disc cd players with more knobs and features than ever before. We have progressed from 8 track to todays far superior CDs. Is pay to listen radio going to be the next step in this progression or will it go the way of the 8 track and disappear?
To date,Sirius Radio has lost almost $5 billion dollars! For the 4th quarter 2007,Sirius made a substantial step forward with revenue of $250 million and reduced 4th quarter losses to $166 million compared to a loss of over $245 million for same quarter 2006. Sirius and XM both have very high fixed costs and subscriber base must keep expanding or neither will ever be profitable.
XM seems to be on the ropes more than Sirius. XM has already used $188 million of the current $250 million line of credit they have.XM had 4th quarter 2007 revenue of $308 million and a loss of $116 million before EBITDA. While Sirius is increasing subscriber base,XM subscriber base is actually dropping. Is Sirius picking up ex XM subscribers or is the market for pay to listen radio subscribers declining?
And,then you must assume Sirius and XM will eventually merge. You would then have a company with over $2billion in revenue,but a company that won't be profitable for several years,if ever. XM has speculated they will be profitable by 2012,assuming a dollar increase in sudscriber monthly fee in 2009 and they can retain their current subscriber base. Not likely.
If Sirius and XM merge,then I think they form a stronger company. Will the new company ever be profitable or will they go the way the way of the 8 track? I tend to assume the latter. By the time these companys merge and then become profitable,something new will have evolved and they will go the way of the dinosaur,extinct.

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Do you Google?

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Google,founded in 1998,is a technology company which maintains a host of on line web sites and on line search engine Google. Google has become the major player,dwarfing Yahoo and all the other on line content sites. Google has grown organically,but major gains will be made through acquisitions. Google acquired You Tube last year and they currently are waiting on FTC approval on Double Click. They are also considered a probable high bidder on the wireless spectrum to provide mobile internet content that the FTC is currently auctioning.
Googles 4th quarter 2007 revenue increased 51% to $4.83 billion compared to same quarter a year ago.The 4th quarter 2007 netted Google $1.21 billion or $ 3.79 a share. Googles 4th quarter international revenue increased from 44% to 48 % of total income or $2.32 billion. Google is projected to grow revenue by over 36 % over the next 5 years. Google has a current PE of 32 with a forward projected one year PE of 17.
Future earnings will be enhanced by acquisitions such as You Tube and Double Click. The international market has tremendous potential and should improve revenue by 5 to 10 % per year for years to come.In December 2007,Google reported a sharp increase in revenue from Apple I-phone mobile on line usage. If Google is the high bidder on the FTC auction for mobile on line access,it will be a great revenue source for the future. Double Click should be another revenue source by the latter part of 2008.
Is Google a good investment? I would have to say yes. I think Google can increase revenue by at least 40 % for at least the next 3-5 years. The international market has just begun to emerge. The acquisitions will begin to produce this year.And,if Google is the high bidder on mobile wireless internet provider,this may be the biggest income source in the future.
The only limit on future Google earnings is the FTC and other governing bodys. The future is looking very bright for Google and don't bet against Larry and Sergey!.

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North American Galvanizing

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NGA is a small company located in Tulsa,OK. They operate 5 or 6 plants around the U.S.
NGA hot dips steel products with a protective coat to prevent corrosion. NGA had about $88 million in sales in 2007,but they netted .72 cents for the year. That gives them a current PE of about 8.5.
NGA says they expect 2008 to out pace 2007. One key factor is zinc prices have dropped significantly but NGA intends to keep their prices stable and thus increase their net income. In 2007 with $ 14.5 million cash flow.they paid off all bank debt.
NGA announced a $ 2 million dollar stock buy this week to increase share holder equity.So,when you look at this company there is a lot to like.
The technical indicators I look at tell me this stock will have some near term upward movement. I,m buying some tomorrow for the contest and my personal portfolio too. The stock is at $6 and I,m looking for 10 to 15% uptick in the next few days. If you take a stand,let me know how you do and I,ll list a couple of new stocks each week.

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NGA

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Hey Ted,

Thanks for the post. I owned some of this stock last year and did real well with it. NGA came out with a quarterly report Feb. 13 and with all the talk of recession etc.,NGA had record earnings and they have been in business for 50 years. And,the stocks 52 week high is over $12,so I think it's a steal. The stock lost .27 cents today,but gained .22 cents back in the after market,so it held up well on a down day. I think it will gain next week,if nothing like Bear Stearns happens.
This is the kind of stock I look for. A small,profitable company( PE 8.5) like this when the technical aspects look good,can jump 5 or 10% in a day
If we ever get all the bad news out of the way,this little stock will do well.


Thanks,

Don

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To Baidu or selldu?

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Baidu is a Chinese language internet search engine located in Beijing,China. Baidu was incorporated in 2000 and has a current market cap of $9.15 billion. Bidu has on online auction,P4P, which allows clients of Bidu to bid on the positioning of their links based on what they are willing to pay.
Baidu reported 4th quarter 2007 earnings and they had some great improvements in gross revenue and net revenue. Revenue jumped 110 % over 4th quarter 2006 revenue to $78 million. Net revenue jumped 79 % over 4th quarter 2006 to $30 million or .87 cents per share. Bidu had a $10 million dollar charge related to expansion into Japan and this will be a future revenue source.
China is booming and it's possible to find companys with phenomenal growth like Baidu. The internet is in it's infancy in China and will continue to grow along with many other business models.
At this time I would still be hesitant to invest in Biadu. Baidu has couple of giants trailing it and trouble could on the horizon. Biadu currently has 60 % of the Chinese internet search traffic,but guess whos closing in? Google and Yahoo-China. As I said earlier the Chinese internet model is in its infancy and Baidu has a 60 % market share,but Google has 29% and Yahoo-China has 10 %. This is great for now ,but Google I think will soon start gaining market share from Baidu. And then you have Yahoo-China. Yahoo-China has 10 % of the traffic now,but they own 10 % of Alibaba,the largest ecommerce site in China and 40 % of the Alibaba Group parent company of Alibaba and Alibaba Group controls 69 % of all the online transaction traffic in China.
My outlook is Microsoft buys Yahoo and that gives Microsoft a huge foot print in China. That gives all of Yahoo a new management and pools all the resources of Yahoo and Microsoft and that makes Microsoft the leader in China.

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Solar Power

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LDK is 1 of many players in the solar energy field. With the rapid increase in oil prices solar power is again on the front burner. There is no doubt solar will play a part in our future energy sources. But,how much and when is up to the solar companies such as LDK and when the cost basis for solar power is comparable to the public utilities energy cost.
Solar power has been used in the most basic application for centuries. Early civilizations learned to turn their homes toward the direction of the sun to take full advantage of the suns warmth and lighting. The first solar cell was made back in 1883. Solar water heaters were used as early as the 1890s,but faded when electric and gas became available.
Solar power generation has increased from 49 MW in 2002 to 314 MW in 2007 in the U.S. A MW of energy will power 778 normal households for a year. So as you see solar power generation has increased but still provides less than 1 % of total energy consumed in the U.S.
As I stated earlier the biggest challenge for solar companies is to lower the over all cost for solar panels. Most panels are made of silicon which has remained high and at times a supply of silicon may be unavailable due to tight markets. LDK and most of the major solar cell makers use silicon currently, but I think they will have to move away from silicon based cells to become a major supplier of energy.
LDK is looking for sales of near a billion dollars in 2008. In the 4th quarter of 2007 LDK netted 49 million or 44 cents per share. LDK has already sold all of their 2008 production and 90 % of their 2009 production. Most companies such as LDK are coming on line with higher production levels as quickly as possible.
Another major player in the solar arena is FS or First Solar. FS thinks they can compete with traditional electric producers on a cost basis in 2-4 years. But,FS is almost strictly for commercial applications,so home owners will be mostly left out,at least for now.FS is also expecting sales of near a billion dollars in 2008. FS net income grew from 4 million or .07 cents a share in 2006 to 158 million or $2.03 in 2007.
It's hard to argue with the success of some of the current solar panel makers such as LDK and FS. I think the winner will be the company that moves from typical silicon wafers to some of the newer wafers made from another material and the thin cell wafer.
HelioVolt is a private company that makes a cell called CIGS. It is much cheaper to make and it avoids another high cost of solar panels-installation. HelioVolt has a process by where they print the cells onto materials such as glass and other building materials. If HelioVolt can develop a system of panels printed on glass or maybe your shingles or metal roofing,they will revolutionize the solar industry.
The solar companies such as LDK due to their tremendous growth and demand look like short term investments But, the company that can mass produce panels incorporating the technology such as HelioVolt is using will make solar energy affordable for the masses.So if you invest in LDK today,look over your shoulder as something much more efficient and readily available will be out in the near future.

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Octillion Corp.

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If anyone read my blog on LDK, OCTL is a company doing exactly what I said would make solar power available to the masses. Solar powers main obstacle is producing power at a price comparable to public utilities. OCTL has optimized the process of the disposition of silicon nanoparticles onto glass where ultraviolet light is absorbed and converted to electric current. OCTL seems to be moving closer to completing the whole process in a cheaper and more economical fashion.
Can you imagine the impact this could have on energy costs and the environment? HelioVolt is a private company making great strides forward on this technology. Heliovolt is developing a process to print or spray the cells on glass and other building materials. The day is coming when a house can have through the roofing shingles or the glass windows a built in solar power generating station! Lighting and water heating use about 36 % of the average electric bill and both of these uses of power seem to be well within the capabilities of this technology.
No one is putting a time frame on any of this,but OCTL stock has gone up about 50 % since March 24th on the announcement of the new process to apply the silicon nanoparticles onto glass. With a market cap of only $83 million OCTL would also seem to be a prime candidate for acquisition. LDK or FS and the other solar cell makers have to be aware of this new process and I'm sure they are observing these companies.
I like the technical data for OCTL and we are looking at a positive opening for the markets this morning. Solar stocks have been moving up nicely the last few days and I think OCTL will continue to move upward and give us a nice return!

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