Seeking Alpha

MiamiGent's  Instablog

MiamiGent
Send Message
Agricultural commodities. Thirteen years with the largest U.S. broker of this commodity. Currently, twenty+ years my own company dealing in the same commodity but as a trader (taking title)- a commodity trader that takes delivery. I spend the week on my commodity business and stocks. Over... More
  • ABTL Stellar Performer Autobytel Finally Offers A Great Entry!  0 comments
    Mar 13, 2014 4:10 PM | about stocks: ABTL

    By MiamiGent
    Mar. 10, 2014 4:28 AM ET

    http://stockcharts.com/h-sc/ui?s=ABTL

    Summary

    •ABTL share price takes healthy breather after riding RSI 80 for six months.
    •Shelf Registration misunderstood- for acquisitions, not operating expenses. Float of approximately 4.5 million evidences company's interest in share structure.
    •The Earnings miss that wasn't- rising share price triggered convertible notes increasing the OS, diluting EPS roughly equal to the .02 "miss".

    Autobytel Inc. (NASDAQ: ABTL) provides high quality consumer leads and associated marketing services to automotive dealers and manufacturers throughout the United States and offers consumers robust and original online automotive content to help them make informed car-buying decisions. The company pioneered the automotive internet in 1995 with its flagship website autobytel.com and has since helped tens of millions of automotive consumers research vehicles; connected thousands of dealers nationwide with motivated car buyers; and helped every major automaker market its brand online (from the company).

    ABTL stock has been on a tear the past 52 weeks, rising 222%. Analyst's estimate the Yearly EPS will grow 72% in 2014.

    The rise has been fueled by ten straight profitable quarters and successive acquisitions as ABTL solidifies its status as the leader in a consolidating industry.

    80% of consumers now shop online for their new or used car. Online is today's showroom!

    Autobytel's latest acquisition is AutoUSA, Auto Nation's (NYSE AN) lead originator subsidiary. This acquisition alone will add 20+% to Autobytel's revenues in 2014 and most importantly signals a long term relationship with Auto Nation. AutoNation is largest U.S. retailer of new cars, trucks and SUVs.

    Since Autobytel's Quarterly Earnings Report 11 trading days ago, the share price has retreated 26%.This is offering investors and traders a great entry and ought not be missed, in my opinion- here are a baker's dozen reasons why:

    1. The Shelf Registration filed on February 27th is for continued acquisitions not for operating expenses- the company throws off cash every quarter. Acquisitions have been accretive to share price value, not dilutive. CEO Jeffrey H. Coats stated in the February 20th conference call the company intends to continue acquiring synergistic companies as ABTL solidifies its leading status in a consolidating industry.

    2. The miss of .02 in Q4 was largely due to the rising share price which triggered warrants and convertible notes adding 23% to the OS, diluting Earnings.

    3. The 20 EMA was tested twice last week and held. The share price appears to be at support- always the choice entry.

    4. Volume has dropped below the 10 day average volume indicating selling is largely over.

    5. When the RSI has been riding 80 for six months, the share price looks for a reason to reset. The misconstrued Earnings report and Registration intent provided that.

    6. RSI is now 37.82 on the 6 month daily chart- oversold, offering plenty of room for appreciation.

    7. The technology index, which ABTL is part of has been strong of late with the exception of the most recent period. A breather is not a bad thing following a parabolic move up.

    8. Short interest is a mere 1.13%- few wish to stand in front of the ABTL juggernaut.

    9. ABTL has over 50% institutional, mutual fund and inside ownership- a real sign of confidence in a microcap stock.

    10. A large ABTL stakeholder is John Bogle Jr., son of stock market legend Jack Bogle. John is no silver spoon son. His hedge fund has returned 12.4% over its 14 year existence, far outperforming the 8.6% gain of its benchmark index, the Russell 2000 over the same period.

    11. I/B/E/S ABTL EPS forecast for 2014 is .62 versus .36 for 2013- a 72% increase in net earnings!

    12. As of 12/31/13, ABTL had federal and state NOLs (carry forward losses) of $100.9 million and 66.1 million, respectively- a huge boost to future net earnings.

    13. The auto industry is anticipating another great year in 2014. Analyst's estimates reach as high as 16.5 million vehicles. 2013 was 15.6 million. ABTL not only rides the industry's coattail, it outperforms the industry. This said CEO Coats, "our 17% revenue growth for the full year (2013) readily eclipsed the approximate 9% growth in retail auto sales in the last year and we expect our growth to outpace the market for U.S. auto retail sales for the foreseeable future".

    There is little bad to say about this company except perhaps some grousing over the CEO's near million dollar compensation- rather steep for a microcap company. I don't begrudge the CEO as he works like a Trojan and has performed admirably.

    I like ABTL as an investment as well as a trade. It is one of the better opportunities I have seen in a while.

    A cautionary note: The markets are hitting all time highs. There has been a rotation into defensive stocks. Consider buying 1/2 the shares you may wish to of any stock as a defensive measure.

    Use of any of the various stop loss mechanisms is recommended. With limited volume and a small float, ABTL share price moves sharply.

    Disclosure: I am long ABTL.

    Additional disclosure: I am not a professional stock analyst. I am a 36 year physical commodities trader (softs) who enjoys trading stocks. I buy and sell stocks approximately 2,500 times a year. I could be exiting a position minutes after initiating it. Stock trading is dangerous.

    Themes: AN Stocks: ABTL
Back To MiamiGent's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.