Friday, June 29, 2007



They released it on Friday for the first time in a year. And I understand WHY!

WOW what a disappointment. I was thinking .07 EPS for the quarter they did a NEGATIVE .13.

Instead of .35 EPS for the year they did .16!!! What a difference.

I can see why they dumped this report on a friday. It sounds also like they will have some additional expenses coming in 2008. I think the revenue will continue to move higher but will earnings follow? Taking out the gain for currency exchange they were closer to .10 for the year. And this stock is over $4. Or 40x PE.

It will probably get WHACKED today in a BIG WAY. More than likely I am selling. Although they still may come out with a dividend next week. (I think it will move up at that time)

The company still has a book value of roughly $3.27 and has a good amount of cash.

The company did do $31.5 million in revenue which is about 2x their market cap. (Though their market cap will go down today)

I think when the dust settles wherever it does today and monday (I assume the lower $3's) It will look good on paper as far as price to sales and price to book but the earnings have to follow and I am not sure if they will or not.

I do think if they do release a dividend which based on their current cash position I don't see why they couldn't. If they do release that I think they will get a bump in price.

As far as trader I wouldn't touch it today. Should be a BAD day for it. Wait for it to settle and if interested in a riskier trade (a week or two hold) then could buy the stock late Monday or first thing wednesday trying to play the dividend news. Of course if they never come out with that news YIKES!

Hopefully DFNS doesn't disappoint like this in their 2nd quarter coming up. (I am in DFNS until I my target or something changes with them)

I will more than likely sell my HIHO assuming it doesn't fall too much ahead of the open. If I can sell in the high $3's I will probably get out. OUCH thats going to hurt. Its not a big position but I was WAY off on my estimates.

Steve Hoven

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