Traffix Inc. (TRFX)
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TRFX Forum Topics
- All Comments on TRFX
- General Discussion on TRFX
- Interview with Abba Horwitz, Old School Partners [view article]
- Traffix Merger Presents Arbitrage Opportunity [view article]
- Three Smallcap Stock Picks [view article]
- Microcap Dividend Stocks? Absolutely. [view article]
- Stocks Covered by Seeking Alpha on Internet Stocks [view article]
loading ...Recent TRFX Articles
- Interview with Abba Horwitz, Old School Partners
- Traffix Merger Presents Arbitrage Opportunity
- Three Smallcap Stock Picks
- Microcap News: Western Goldfields, Advocat, Traffix
- Traffix: Possible Further FTC Anti-Spam Legislation Priced In
- Fastest Growing Microcaps List: Six Favorites
- RBC's Rohan: Valueclick's Lead-Gen Creates Regulatory Risk
- Microcap Dividend Stocks? Absolutely.
- R. Brent Byrne On Dividend-Paying Small Cap Stocks
- Traffix - TRFX - revenue up 85% including acquisitions (1Q05 earnings results)
- Full List of Articles »
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ababy
Interview with Abba Horwitz, Old School Partners [view article]
Syneron (ELOS) outshined it's peers??????????? Better take a look at the clear industry leader Cynosure (CYNO) ReplyTraffix Merger Presents Arbitrage Opportunity [view article]
Cogitator has it right - a long position has nothing to do with arbitrage, and if one had shorted both TRFX and NWMO when the deal was announced, they'd really have made some solid $$$. I do agree with the long position on NWMO (or whatever their new ticker will be with the name change to Atrinsic) - it will take a couple years of patience but having worked with TRFX technology, I think they'll take off once the dust settles and they can get back to growing organically. ReplyEditors
General Discussion on TRFX
Is this a buy or a sell? ReplyTraffix Merger Presents Arbitrage Opportunity [view article]
You aren't performing merger arbitrage by just going long on the target company. (That would be sufficient for a cash deal.) This is a stock-for-stock transaction, so you need to short shares of the acquirer. Are you familiar with arbitrage? ReplyThree Smallcap Stock Picks [view article]
No offense, and no disrespect to Mr. Byrne, but why would anybody pay any attention to a guy whose investment philosophy is to invest in stocks that pay high dividends in order to avoid picking losers?Buying a stock because the dividend yield happens to be high is fine, but yield is function of price, so assuming the dividend amount stays the same, the yield will go up or down depending on the price.
Let's look at the first pick, Traffix, Inc. (Nasdaq: TRFX). The company lists itself as an internet media and marketing company that provides end-to-end marketing solutions for its clients. I have to tell you, when I visited the company's website that I came away with the impression that if this company went out of business, at least half of the spam I get would stop.
At any rate, I did look at the company's latest annual financials which were for the period ending 11/06 and I have to say I personally wasn't very impressed.
The company's direct costs are 63% of sales, and their selling and administrative expenses are 30% of sales. Taxes eat up another 2% of sales, and dividends consume another 6% of sales, leaving absolutely nothing for a rainy day.
NOTE: Please do not freak out, the reason it doesn't total 100% is because of rounding.
On a value investing basis, I estimate that a reasonable value for the stock is $7, with a buy target of $3.50, a first sell target of $6.75, and a close target of $7.50.
On a fundamental investing basis based on the latest 10-K filing of 11/06, the stock has a PE of 35, a Return on Invested Capital of 10%, Free Cash Flow of $0.23, a Tangible Book of $2.36, and pays a cash dividend of $0.01 per share.
On a short term investing basis, based on a recent close of $6.11, the stock has overhead resistance at $7.39, a 28% increase from current levels, first support at $6.05, a 1% decline from current levels, and second support at $5.71, a 7% decline from current levels.
So all of this brings me back to the company's investment philosophy, investing in stocks that pay high dividends to avoid investing in losers.
Now admittedly I'm not the sharpest pencil in the box, but it just seems to me that if the one penny per share dividend that Traffix, Inc. pays is considered a high paying dividend by Mr. Byrne, it might just be that his client base dies off before they are able to determine how well his investing philosophy actually works.
Wax Reply
Microcap Dividend Stocks? Absolutely. [view article]
What? Post makes no sense. Try posting something worthwile; this is absolutely worthless info, dude! Reply