Starlims Technologies Long Trade Setup

Another week and another scan of the stock charts. My analysis this week has given me a buying opportunity in a market of not so many good long choices currently, and many short sell candidates in my opinion.

I always love a challenge, and when I can find a possible contrarian investment to what the general market is doing, I get interested. If I'm right, I can be right in a big way if the rest of the market has not seen what I have yet, and I'm positioned first before the crowd comes rushing in.

This stock only has an 18% institutional ownership currently. It's also a small cap, so be careful, don't put your entire account equity in this stock just in case the price tanks after you get into it. On the other hand, this company has the potential to grow big and fast being this small at a $65M market cap.

Starlims Technologies (LIMS) - Buy Long

LIMS Trade Setup
Buy entry at current price of $7.50 or pullbacks to $7.07
Stop-Loss $7.05
Take Profit Areas:
Short Term $8.71 to $8.96.
Intermediate Term: $10.10 to $10.38
Long Term: $11.62 to $11.94

Starlims Technologies Company Profile

Starlims Technologies Ltd. is a provider of laboratory information management systems (LIMS). The Company develops, markets and sells configurable off-the-shelf LIMS software solutions trade-named Starlims. Starlims manages the collection, processing, storage, retrieval and analysis of information generated in laboratories. Starlims Technologies' software seeks to improve the reliability of sampling processes, supports compliance with domestic and international regulations and industry standards, provides reporting, monitoring and analysis capabilities, and enables its customers to manage their laboratories. The Company's Starlims software is used by more than 500 laboratories in over 40 countries around the world.

Starlims 1st Quarter 2008 Earnings Report

Total revenue for the first quarter of 2008 was $7.0 million, up 28.9% from $5.4 million reported in the first quarter of 2007. Product revenues were $4.7 million, up 36.8% from $3.4 million reported in the same period a year ago. Services revenues were $2.3 million, up 15.4% from $2.0 million reported in the same period a year ago.

With their PE at a reasonable 13, I see Starlims with very good growth potential going forward.

Starlims Stock Repurchase Program

Starlims purchased an aggregate of 90,727 common shares in the first quarter of 2008 for $681,000 or an average price of $7.54. The company approved the stock repurchase program on February 13, 2008, and enables STARLIMS to purchase an aggregate of $2 million of the Company's common stock over a period of 18 months. At March 31, 2008, the Company had approximately $1.3 million remaining on its stock repurchase program.

Starlims Forward Earnings Guidance

Starlims is reiterating its financial guidance for fiscal year 2008 that was provided on February 14, 2008. Management continues to expect total revenues of $27 to $29 million and GAAP EPS of $0.55 to $0.70, which includes approximately $0.05 of stock-based compensation expenses, amortization of intangibles related to acquisitions and other non-recurring expenses. The guidance assumes an annual tax rate of approximately 15% and estimated weighted average shares outstanding of 8.9 million during 2008.

Disclosure: Long

Comments

[The Real Ex...:]

Okay, now how about a real look at LIMS? The article looks like you cut and paste from some cheap service like Zach's or Morningstar. It's obvious you really do not understand LIMS or its market.

I attended an institutional investor road show presentation before LIMS went public. I found the management to be a bit clueless and lacking real direction and understanding for the future trends of the sectors it serves. Part of the problem is that it has very little focus. In short, it's run like a conglomerate but they aren't positioned to do so. Can you say inefficiency? There is a good reason why institutions don't own much of the stock. These guys are going nowhere without a change in management. Don't get me wrong, it's a solid company. It's just not the type of company that should have gone public. An IPO served primarily as a way for management to exit. I might pick up a few shares when it tanks to $4, but only for a trade.

2008 Jun 02 10:59 AM

[The Real Ex...:]

Enter your comment hereOh and wtf is this crap:

LIMS Trade Setup
Buy entry at current price of $7.50 or pullbacks to $7.07
Stop-Loss $7.05
Take Profit Areas:
Short Term $8.71 to $8.96.
Intermediate Term: $10.10 to $10.38
Long Term: $11.62 to $11.94

Excuse me, but where do you get this crap? What qualifies you to put this crap out? Have you ever managed money professionally? If not then stick to your opinions but don't position yourself as some expert. It's apparent to me that you are another kid who thinks he's a pro.

2008 Jun 02 11:04 AM

[Michael Mic...:]

HOLLYWOOD, Fla., June 2, 2008 (PRIME NEWSWIRE) -- STARLIMS Technologies Ltd. (NasdaqGM:LIMS - News) announced today that its board of directors has declared a cash dividend in the amount of 1.15 new Israeli shekels (NIS) per share and in the aggregate amount of approximately NIS 10.0 million (the equivalent of approximately US$0.35 per share and approximately US$3.1 million in the aggregate). The dividend amount was determined based on the Company's 2007 net profit. The Company has not established a dividend policy with respect to future dividend distributions.

The rest of the announcement is at the following link.

biz.yahoo.com/pz/08060...

2008 Jun 03 11:40 AM

[Mountain Fist:]

When I read this my first reaction was to write a nasty comment, too. However, I decided to look into it a little further. According to my chart analysis this was a sell on the open Monday May 19th, and is still within that short term downtrend, as well as a longer term downtrend. A recommendation to buy at this point is irresponsible, at the least. The current short term downtrend appears to be confirming itself this week with a dive below support at the 10 week MA. This stock almost without a doubt will fall below your stop loss and apears poised for a continued fall.

With respect to fundamentals I'm not impressed. The bright spots within it's fundamental analysis are as follows: $32.72M cash, $0 debt, 4.13M operating cash flow, a respectable if not impressive 15.61% ROE, and nearly 10% insider ownership. Not quite enough to interest me in buying, and definitely not without confirmation from basics like price, volume, moving averages, and MACD.

The 0% short ratio is interesting, but maybe as a contrarian indicator, not a buy indicator. Lack of earnings or revenue growth is a red flag for me, and the 3 month avg daily volume makes this a NO WAY. There is no liquidity. This position is a trap, and is still within a long term downtrend. Volume seems to be picking up to the downside this week confirming my analysis.

2008 Jun 04 04:31 PM

[Michael Mic...:]

Stopped out at $7.05.

2008 Jun 05 10:14 AM

[The Real Ex...:]

First Mountain, in case you missed it - my (nasty) comment was based on my in depth knowledge of company fundamentals and management. It took me all of 5 second to do a "chart analysis."

Invest2success, it should be obvious the dividend is a desperate attempt to gain shareholder support by giving the impression that the company is strong and growing - to naive investors. Think of it as a $3 million marketing campaign.

2008 Jun 09 04:25 PM