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Daniel Sermersheim

 
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  • Technical Communications - 100% Or More Upside Potential During The Current Sales Cycle [View article]
    I can't believe I missed this fact. It takes away some of the premise of my article. I just looked at a few sites and they still showed 5.9% yield so I didn't go into the details. Thanks for pointing this out. I will have to do a little bit more due diligence in the future. However, I still believe the picture is perfect for a huge run in the next year or so in the stock, given the earnings potential and the past history of paying out profits as dividends.
    Oct 12 05:28 PM | Likes Like |Link to Comment
  • Tandy Leather Factory Has Plenty Of Upside Potential [View article]
    I like the introduction of shareholder rights plans in small cap stocks. I have seen so many either A) gobbled up cheaply by another company, B) spend countless resources on proxy fights, or C) the worst, taken off the market for us small cap investors. A and C apply to a very long time favorite of mine, KSW, which I held off and on for many years. B) I can think of CSPI, which recently spent several months fighting off a take over.

    With a rights plan in place, one of my favorite companies remains on the market to be invested in, and its less likely to have to fend off a takeover.
    Jun 11 09:21 PM | Likes Like |Link to Comment
  • Tandy Leather Factory Has Plenty Of Upside Potential [View article]
    The $2,000 in loss was actually split between two US stores. I think the number mentioned on the international stores loss was $49,000. Between the conference call and previous press releases, most of the increase in advertising expense was related to getting revenue high enough in the international stores to break even. I think the CFO said the Spain store should get to break even this year.

    I personally think TLF is a somewhat safe investment up to about $9 a share and is fairly valued in the upper $9's. A low bid might get you shares as the bid/ask range is often $0.50 or more in the early minutes of trading.
    Jun 2 10:47 PM | Likes Like |Link to Comment
  • Hi-ho, hi-ho, its off to work we go as Highway Holdings (HIHO +34%) soars to new highs after the company announced a multi-year order for vacuum cleaner components from an undisclosed leading international appliance manufacturer. The company says that production has already commenced, and an initial order of approximately three million components have already been delivered to the customer. [View news story]
    Looks like I really nailed it on the pull back and the price. I will be holding out for $1.70, but anything down below $1.90 makes HIHO a good long term buy.
    May 24 02:13 PM | Likes Like |Link to Comment
  • Hi-ho, hi-ho, its off to work we go as Highway Holdings (HIHO +34%) soars to new highs after the company announced a multi-year order for vacuum cleaner components from an undisclosed leading international appliance manufacturer. The company says that production has already commenced, and an initial order of approximately three million components have already been delivered to the customer. [View news story]
    The stock over reacted. Bravo to holders and those who sold on the jump. However, this was not a very big order and will not contribute a whole lot to annual EPS. I like the company in general, but the order does little to add to my valuation. Before the announcement I figured any buy below $1.85 was a good buy. Now maybe $1.90.
    May 23 02:34 PM | Likes Like |Link to Comment
  • Tandy Leather Factory Has Plenty Of Upside Potential [View article]
    Tandy missed my estimate by a penny and the analyst estimate by a penny due to increased marketing costs. The increased costs were about $0.03 per share. If the April sales numbers were any indication, the increased marketing costs are showing results. The company also said they are still on track to make their earnings guidance for the year. Overall a lackluster report, but nothing real bad came out of the earnings release.
    May 13 09:24 AM | Likes Like |Link to Comment
  • 8 Things That Could Go Wrong For R.R. Donnelley & Sons This Week [View article]
    I agree. Other than the massive goodwill charge which eroded nearly all the equity it was a good report.
    Feb 28 08:13 AM | Likes Like |Link to Comment
  • 8 Things That Could Go Wrong For R.R. Donnelley & Sons This Week [View article]
    WOW! Equity down to $68 million. I bet the accountants spent all of November and December trying to make sure equity didn't go negative. Retained earnings negative.

    To all my detractors who tried to say I was wrong on the goodwill problem: I Told You So
    Feb 26 07:48 AM | Likes Like |Link to Comment
  • 8 Things That Could Go Wrong For R.R. Donnelley & Sons This Week [View article]
    I have no personal animosity towards RR Donnelley. In fact, I wish it were the other way around and I could be optimistic about the company. Donnelley's, as the company is referred to here, employs over 3% of the people in the county I live in. To have some personal wish for the company to go down in flames would be like wishing for a horrible future for the city I live in and those who I have grown to know well over the years, whether they be friends, family, or acquaintances.

    My reasons for being bearish on the company are well documented. The company has declining sales in a declining industry, the company is heavily laden with debt which it does not pay down but rather refinances, the company has no meaningful cash reserves (and what cash it does have is largely tied up off shore), the company has nearly as much in pension liabilities as it does equity, and the company has twice as much in goodwill as it does equity. None of these things would make me want to be bullish on a company.

    Lastly, despite the heavy yield, the shares continue to decline over time and those who hold for the dividend continue to be losers in the game of the stock market.

    If the company were to report a good quarter, with sales growth, a business plan which results in a meaningful path of replacement for the declining book business, or anything positive at all, I would consider the company perhaps a buy at these cheap valuations. However, this has not happened in quite some time and I don't expect it to happen tomorrow.
    Feb 25 06:59 PM | Likes Like |Link to Comment
  • 8 Things That Could Go Wrong For R.R. Donnelley & Sons This Week [View article]
    I made no mention of any mistreatment of myself, family, or friends. The only thing I sourced from Yahoo was analyst estimates. The rest came directly from SEC filings or company press releases.
    Feb 25 03:10 PM | Likes Like |Link to Comment
  • 8 Things That Could Go Wrong For R.R. Donnelley & Sons This Week [View article]
    I agree management has made an effort to offset the declining print business with its digital media offerings. However its a long way from a predominantly print business to being a digital media business. The logistics offerings are another attempt, but the USPS is declining as well.

    Its possible to overcome the issues, but many a print media business has tried and most have failed.
    Feb 25 02:38 PM | Likes Like |Link to Comment
  • 8 Things That Could Go Wrong For R.R. Donnelley & Sons This Week [View article]
    I plan on writing a follow up article tomorrow evening after we see the earnings report. In this article I will attempt to put a reasonable valuation on the company. Until I see last year's goodwill impairment, I find this difficult to do. As I said in tge article, the large amount of goodwill the company carries on the books is my biggest reason to be bearish. There will be a good amount of scheduled amortization over the next several years without the company having to do additional adjustments.
    Feb 25 02:33 PM | Likes Like |Link to Comment
  • R.R. Donnelley (RRD -2.2%) owns up to mistakenly releasing Google's earnings before it was even lunchtime in California, saying a full investigation over the issue is now in full swing. The type of service the company provides to Google is an extremely minor portion of its overall business, leading some traders to call the +$60M that's been shaved off the stock's market cap a bit of an overreaction. [View news story]
    Its all about the reputation. In financial reporting, security is 100% important. If companies see this snafu as a concern for relying on RRD for their filings, this would be a big hit to RRD. Remember there are only a few growth areas left in RRD and financial reporting has been one of them.

    Although this slip up may not sink the RRD ship or even the business segment, its one more reason to be weary of going long in RRD.
    Oct 18 08:08 PM | Likes Like |Link to Comment
  • R.R. Donnelley & Sons - A Company Without Value, A Company To Short [View article]
    RRD made a major mistake today and released GOOG earnings too soon. For those touting the potential for the financial printing and the Edgar acquisition, this does not bode well. RRD is increasingly a company where there is no reason to go long.
    Oct 18 01:46 PM | Likes Like |Link to Comment
  • R.R. Donnelley & Sons - A Company Without Value, A Company To Short [View article]
    Since my original short call on this company the stock has dropped about a buck. If I read the chart correctly, the $11 area is resistance now and failure to close above $11 today means a mini shoulder has been completed. Next drop takes the stock down to around $10 or below. That drop could/should start today. Good luck longs, you have a big uphill battle ahead.
    Oct 5 10:14 AM | Likes Like |Link to Comment
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