Hello StockDoubling members,
I wanted to write today about why I still like DFNS.
If you take a step back and assume today was the first day you heard of DFNS here is what you have.
The company has roughly 29 million shares. And is asking .39 (how much you could buy the stock for right now) So 29 million x .39 = $11.3 million market cap for the company.
The company has already done $14.2 million in sales for the 9 months. And say they finish the year with a TOTAL of $17 million in revenue. Normally I look for stocks that are less than 2 Price to sales ratio. Well if you take $11.3 million market cap divided by $17 million in sales you could up with a .66 Price to sales ratio. Well below even 1!
A 2x P/S ratio would mean the marketcap is $34 million. Which is a triple from the current stock price levels!
Next looking at Book value the company has a book value of about .24 per share. The stock trading at .39 so the price to book is 1.6x Price to book. Yes before it was trading higher than 2x Price to book but I will talk about the reasons in the next section.
Next I look at growth is the company growing quarterly and yearly growth? The answer is a big YES!!
The company did $10.6 million in revenue last year. This year they should do around $17 million! That is a 60% increase in revenues year over year. Last year they lost roughly .01 per share. This year so far they have earned .042 EPS and even with an OK quarter could make it .05 for the year.
This company has earnings. Based on the current earnings of .042 for the 9 months we are still trading under 10x PE for a company that is growing around 60% for the year! If they do .05 for the year that is around a 8x P/E ratio. Assuming growth continues (not at 60% a year but continues to grow strong) a 12x PE isn't unreasonable. And that being said we should be at MINIMUM .50 right now.
That is why I wouldn't sell a share at these prices. If I had never heard of DFNS until today I would seriously buy this stock for the stock doubling project. Again unless sales totally dry up I don't see a ton of downside to this stock. Book value is still .24 and revenue is still $14 million even if they didn't have 1 more dollar of revenue for the year.
The 3rd quarter was the 2nd highest quarter they have had in a long time.
I will hopefully contact the company this week and ask a few questions and get back to you with the answers etc..
Again unless the company comes out with news that sales are drying up I see no reason why this stock isn't in the mid/high .40's by the end of the year which is a 15-25% return in that time.
I wish you the best in your trading.
Happy Thanksgiving if I don't talk to you before then.
Steve Hoven
alleycatnews@alleycatnews.net
Monday, November 19, 2007
Thursday, November 15, 2007
DFNS CRUSHED!
I am NOT sellling 1 share at these prices! This is crazy!!
At .39 x 29 million shares = market cap of $11.3 million. They have already done $14.2 million in revenue for the 9 months and will probably be around $17 million for the year. That is .66 x Price to sales.
Book value is at .24 so you are only trading at 1.6x book value.
EPS is at .042 for the year so far. Which means you are trading at less than 10x PE. And if they added just .008 to the 4th quarter that would mean .05 for the year.
I look for DFNS to rebound and fill the gap it just created by the end of the year for sure but I would think quicker than that. I think a 20-25% move up in the next few weeks from these .39 prices is quite possible.
Of course if DFNS comes out and says sales will slow down and we have no new contracts down the pike things could change. But the downside at this point doesn't seem too much and the upside seems to be good.
If I wouldn't have bought all I could prior to the news release I would buy at these levels. The #'s don't add up for this not going up a bit.
Have a great trading day.
Steve Hoven
alleycatnews@alleycatnews.net
!remove
At .39 x 29 million shares = market cap of $11.3 million. They have already done $14.2 million in revenue for the 9 months and will probably be around $17 million for the year. That is .66 x Price to sales.
Book value is at .24 so you are only trading at 1.6x book value.
EPS is at .042 for the year so far. Which means you are trading at less than 10x PE. And if they added just .008 to the 4th quarter that would mean .05 for the year.
I look for DFNS to rebound and fill the gap it just created by the end of the year for sure but I would think quicker than that. I think a 20-25% move up in the next few weeks from these .39 prices is quite possible.
Of course if DFNS comes out and says sales will slow down and we have no new contracts down the pike things could change. But the downside at this point doesn't seem too much and the upside seems to be good.
If I wouldn't have bought all I could prior to the news release I would buy at these levels. The #'s don't add up for this not going up a bit.
Have a great trading day.
Steve Hoven
alleycatnews@alleycatnews.net
!remove
Wednesday, November 14, 2007
DFNS EARNINGS REVIEW!!
DFNS earnings are OUT!
UGH!! I was looking for $4.3 million revenue and .017 in EPS. I said the earnings keeping the expenses down was key.
Well they beat the revenue #'s they came in at $4.6 million revenue but got HAMMERED on the EPS only giving .006 (that is 6/10's of a penny)
So for the year they have $14 million in revenue and about .042 in EPS for the year. They won't do the .07 EPS that I was hoping for that is for sure.
They do have .04+ for the year so far in EPS. So if the stock sells off tomorrow I wouldn't expect it to be HUGE. Yes it could get into the .40's but I wouldn't think .30's would be in the mix. By no means do I think its a $1 stock at this point. But I don't think its a .30 stock either.
I may sell out of some of my EXTRA shares tomorrow though I doubt I will sell my stockdoubling shares. I may be in this stock for a good while yet. Next earnings release won't be until the end of MARCH 2008! So we have over 4 months to wait for the 10K report. Hopefully in the meantime they will have some positive news releases in the mean time.
I will now give some Positives and negatives from the report....
Negatives
-----------------
Backlog is down to $5 million down $2 million from the last quarter.
Local military may only account for $1 million this current Q4
Margins got hit in a BIG WAY!
No new information on additional orders.
May take some time to get some real returns from the stock.
Positives
---------------
Book value of .24. So a .48 stock is just 2x book still very reasonable
Revenue continues to grow. $14 million so far should do at least $17 million for year.
With a $17 million year .58 stock would mean 1 to 1 price to sales ratio.
$17 million in revenue would also mean roughly 60% growth over 2006
.042 EPS for the year. Not what I had hoped but a nice base to stop the stock from falling too far.
Local Military seems strong.
If the orders dry up this stock could go much lower. If they come out with comments they could see some growth next year etc.. Then we still have some good life in the stock. It is still a good valuation on a Price to sales, Price to Book and P/E ratio. So I don't see a ton of downside unless of course the sales dry up. I don't see a ton of upside though either unless they come out with news releases about new orders etc..
We will see how the stock reacts tomorrow.
I would think the company would come out with a news release on the Q3 report sometime tomorrow before the bell.
Have a good trading day
Steve Hoven
alleycatnews@alleycatnews.net
UGH!! I was looking for $4.3 million revenue and .017 in EPS. I said the earnings keeping the expenses down was key.
Well they beat the revenue #'s they came in at $4.6 million revenue but got HAMMERED on the EPS only giving .006 (that is 6/10's of a penny)
So for the year they have $14 million in revenue and about .042 in EPS for the year. They won't do the .07 EPS that I was hoping for that is for sure.
They do have .04+ for the year so far in EPS. So if the stock sells off tomorrow I wouldn't expect it to be HUGE. Yes it could get into the .40's but I wouldn't think .30's would be in the mix. By no means do I think its a $1 stock at this point. But I don't think its a .30 stock either.
I may sell out of some of my EXTRA shares tomorrow though I doubt I will sell my stockdoubling shares. I may be in this stock for a good while yet. Next earnings release won't be until the end of MARCH 2008! So we have over 4 months to wait for the 10K report. Hopefully in the meantime they will have some positive news releases in the mean time.
I will now give some Positives and negatives from the report....
Negatives
-----------------
Backlog is down to $5 million down $2 million from the last quarter.
Local military may only account for $1 million this current Q4
Margins got hit in a BIG WAY!
No new information on additional orders.
May take some time to get some real returns from the stock.
Positives
---------------
Book value of .24. So a .48 stock is just 2x book still very reasonable
Revenue continues to grow. $14 million so far should do at least $17 million for year.
With a $17 million year .58 stock would mean 1 to 1 price to sales ratio.
$17 million in revenue would also mean roughly 60% growth over 2006
.042 EPS for the year. Not what I had hoped but a nice base to stop the stock from falling too far.
Local Military seems strong.
If the orders dry up this stock could go much lower. If they come out with comments they could see some growth next year etc.. Then we still have some good life in the stock. It is still a good valuation on a Price to sales, Price to Book and P/E ratio. So I don't see a ton of downside unless of course the sales dry up. I don't see a ton of upside though either unless they come out with news releases about new orders etc..
We will see how the stock reacts tomorrow.
I would think the company would come out with a news release on the Q3 report sometime tomorrow before the bell.
Have a good trading day
Steve Hoven
alleycatnews@alleycatnews.net
DFNS EARNINGS TODAY???
Today the day for DFNS?
On Oct 5th on the blog I talked about DFNS needing to put out a release about a new order to get the momentum going ahead of the earnings release. Obviously that didn't happen.
Today is Nov. 14th I would think that the earnings release would be sometime today. Either before the market opens, during market opening, or as they tend to do after the market closes. The reason to do it after the market today is to still have 2 trading days for the week to trade the news. If they dumped it after tomorrow's close than all we would have left is Friday to trade. And I would assume that the quarter would be bad.
They have been late in the past as well but they tend to give revenue and earnings #'s in the late filing report. Hopefully we won't see that though.
I am looking for $4.3 million in revenue and .017 in EPS.
The stock price has fallen a bit to the low .50's. I picked up some more yesterday at .53. I have almost 19,000 shares of DFNS and it is my only holding. I may sell out of some of those shares depending on the quarterly report.
I highly doubt that I would sell out of my DFNS stockdoubling shares no matter where the DFNS stock goes (up or down) based on this quarters #'s. Unless they say they see a major slow down in growth coming even a fall into the low .40's or a little worse wouldn't scare me out probably. But I will keep you posted.
Those that aren't in DFNS. I think this offers good risk/reward at these levels. A person can basically buy the stock for .03 more than what I did 6 months ago. And there is a LOT more good news in the stocks in that 6 months. If another good quarter comes out I think this stock reaches .70+ sometime next week. If its bad news I think it could fall to the high .30's but would be a steal down there. (Assuming they aren't slowing growth in a major way which based on their comments doesn't seem to be the case.) I DON'T MAKE RECOMMENDATIONS!
I will update you when the earnings come out and my thoughts on it all.
Have a great day
Steve Hoven
alleycatnews@alleycatnews.net
On Oct 5th on the blog I talked about DFNS needing to put out a release about a new order to get the momentum going ahead of the earnings release. Obviously that didn't happen.
Today is Nov. 14th I would think that the earnings release would be sometime today. Either before the market opens, during market opening, or as they tend to do after the market closes. The reason to do it after the market today is to still have 2 trading days for the week to trade the news. If they dumped it after tomorrow's close than all we would have left is Friday to trade. And I would assume that the quarter would be bad.
They have been late in the past as well but they tend to give revenue and earnings #'s in the late filing report. Hopefully we won't see that though.
I am looking for $4.3 million in revenue and .017 in EPS.
The stock price has fallen a bit to the low .50's. I picked up some more yesterday at .53. I have almost 19,000 shares of DFNS and it is my only holding. I may sell out of some of those shares depending on the quarterly report.
I highly doubt that I would sell out of my DFNS stockdoubling shares no matter where the DFNS stock goes (up or down) based on this quarters #'s. Unless they say they see a major slow down in growth coming even a fall into the low .40's or a little worse wouldn't scare me out probably. But I will keep you posted.
Those that aren't in DFNS. I think this offers good risk/reward at these levels. A person can basically buy the stock for .03 more than what I did 6 months ago. And there is a LOT more good news in the stocks in that 6 months. If another good quarter comes out I think this stock reaches .70+ sometime next week. If its bad news I think it could fall to the high .30's but would be a steal down there. (Assuming they aren't slowing growth in a major way which based on their comments doesn't seem to be the case.) I DON'T MAKE RECOMMENDATIONS!
I will update you when the earnings come out and my thoughts on it all.
Have a great day
Steve Hoven
alleycatnews@alleycatnews.net
Wednesday, November 7, 2007
DFNS AT .53!!!
You can buy DFNS for .53 as of this writing!!
Too me that just seems like a good deal. I have bought more in my IRA last week at a bit higher prices but at these levels I am going to try and buy some more for my regular account at .53. (I just bought an additional 1500 shares. I know have over 17,000 shares 8000 of which are for the stockdoubling account.)
If they have a breakeven quarter this stock goes down to around .40 which is .13 down. I can't foresee them losing money but if they did I guess they would go down a little more than that.
Even if they only do .01 for the quarter that means they have roughly .045 EPS for the year. Assume they only do .01 for Q4 and that is .055 for the year. At 10x PE you have a .55 stock.
I think of course they will do much better then that I think the earnings could look in the area of .07 for the year. Which if they do its at least a .70 stock minimum. That is .17 higher then current prices.
Also DFNS at .40 and 29 million shares outstanding would put the market cap at roughly $11.6 million. Well unless the revenues just fell something tremendous they should do in the area of $17-18 million for the year. That would mean that they would be trading at roughly .68 price to sales ratio. It should be trading more like 1.5 or so. A .40 stock would mean less than 2x Price to book ratio. And like I said roughly 10x PE ratio for the year.
In other words unless the wheels just totally came off this stock I don't see a lot of downside potential in this stock. And any downside potential I would think would be quickly brought back up to these current levels based on sales growth.
The company hasn't said anything negative at all. Actually been positive with their comments they see sales growth continuing.
It stinks to be in a dead money stock. I wouldn't quite consider DFNS as such but it has been sitting in the .50-.60 range for a while now.
If DFNS did $17 million for the year and had a 1.5 price to sales ratio this stock would be at .88. At those prices it is roughly a 4x Price to book. And if they do earn in the .07 range for the year that roughly a 12-13x PE ratio for a company that grew 60% for the year. Those are reasonable evaluations especially if the grow continues even at 30% for next year.
No I don't think DFNS is a $1.50 stock by any means but I don't think its a .40 stock either.
Hopefully the company comes out with a press release on new orders before Q3. And hopefully Q3 is .015-.02 in earnings.
Have a great trading day.
Steve Hoven
alleycatnews@alleycatnews.net
www.Stockdoubling.org
Too me that just seems like a good deal. I have bought more in my IRA last week at a bit higher prices but at these levels I am going to try and buy some more for my regular account at .53. (I just bought an additional 1500 shares. I know have over 17,000 shares 8000 of which are for the stockdoubling account.)
If they have a breakeven quarter this stock goes down to around .40 which is .13 down. I can't foresee them losing money but if they did I guess they would go down a little more than that.
Even if they only do .01 for the quarter that means they have roughly .045 EPS for the year. Assume they only do .01 for Q4 and that is .055 for the year. At 10x PE you have a .55 stock.
I think of course they will do much better then that I think the earnings could look in the area of .07 for the year. Which if they do its at least a .70 stock minimum. That is .17 higher then current prices.
Also DFNS at .40 and 29 million shares outstanding would put the market cap at roughly $11.6 million. Well unless the revenues just fell something tremendous they should do in the area of $17-18 million for the year. That would mean that they would be trading at roughly .68 price to sales ratio. It should be trading more like 1.5 or so. A .40 stock would mean less than 2x Price to book ratio. And like I said roughly 10x PE ratio for the year.
In other words unless the wheels just totally came off this stock I don't see a lot of downside potential in this stock. And any downside potential I would think would be quickly brought back up to these current levels based on sales growth.
The company hasn't said anything negative at all. Actually been positive with their comments they see sales growth continuing.
It stinks to be in a dead money stock. I wouldn't quite consider DFNS as such but it has been sitting in the .50-.60 range for a while now.
If DFNS did $17 million for the year and had a 1.5 price to sales ratio this stock would be at .88. At those prices it is roughly a 4x Price to book. And if they do earn in the .07 range for the year that roughly a 12-13x PE ratio for a company that grew 60% for the year. Those are reasonable evaluations especially if the grow continues even at 30% for next year.
No I don't think DFNS is a $1.50 stock by any means but I don't think its a .40 stock either.
Hopefully the company comes out with a press release on new orders before Q3. And hopefully Q3 is .015-.02 in earnings.
Have a great trading day.
Steve Hoven
alleycatnews@alleycatnews.net
www.Stockdoubling.org
Tuesday, November 6, 2007
DFNS a deal?
Hello StockDoublers,
Nothing has changed with DFNS.
I think these prices will be looked on in the future as steals should we have a good quarter. But we will see how that goes.
I would like to see a good quarter but also a news announcement that they have more orders coming in that is just as important.
I won't have a StockDoubling Monthly pick until after the DFNS news comes out and at that time will put the website up etc..
Steve Hoven
alleycatnews@alleycatnews.net
Nothing has changed with DFNS.
I think these prices will be looked on in the future as steals should we have a good quarter. But we will see how that goes.
I would like to see a good quarter but also a news announcement that they have more orders coming in that is just as important.
I won't have a StockDoubling Monthly pick until after the DFNS news comes out and at that time will put the website up etc..
Steve Hoven
alleycatnews@alleycatnews.net
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