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  • LeapFrog Has Cash And Knows How To Use It [View article]
    "Looking at LeapFrog's historical P/BV, P/Sales, and P/CF ratios implies that the company should be able to justify a much higher share price. Given the company's overall strong performance since 2010, I do not think that it should be considered a less valuable company than it has been on average over the past 5 years, and so a valuation of $7.00 per share based on the company's historical multiples seems conservative."

    After the announcement Thursday evening and the market reaction on Friday, I think the company is and certainly should be considered significantly less valuable.

    There is little chance that shares see $7.00 in the next 18 months.
    Jan 25, 2015. 11:09 AM | Likes Like |Link to Comment
  • LeapFrog Misses Guidance By A Mile [View article]
    Tap, you are focusing too heavily on what you are getting out of the balance sheet and not looking forward, specifically during the next 9 months. Past authors and the flurry of commenters were guilty of the same thing, and saying the same sorts of things you are right now. Have you reviewed those past articles and the comments?

    They may not be going out of business today, but the business is deteriorating rapidly - that is known. You now have another 9 months of soft sales with quarterly losses coming. What will the balance sheet look like come November? Then, once again you will be relying on the single holiday quarter to dig out of the hole created throughout the year.

    I am expecting another flurry of articles this year, once again pointing to the amazing value which LF shares represent. The same has taken place with other companies in other sectors through 2014, and they are basically a year ahead of LF in this respect - all of them trading significantly lower than 12 months ago, and with balance sheets that have deteriorated. This is the path I see for LF - come September/October timeframe, the balance sheet is going to be much weaker than you see today. What will happen between now and then on the business/operational front - not much really. Sales will be declining, and they will be using the cash they have to fund the losses through the lean quarters. With such a deterioration in sales this holiday quarter, I am guessing that quarterly sales through spring/summer may well be below 2014 levels. The bottom line is that the business is in an all out tailspin. You are doing your analysis being one step behind what is taking place and you need to get out in front of it.

    We should expect/hope to see some high level terminations/departures in the next couple months - the CEO must go and it needs to be done quickly. I don't think that will change much through 2015, but it may placate investors to at least hold on through the holidays this year and not totally abandon the shares.

    Tap - please review the first three 10Q income statements of 2014 and focus on only the top line and the bottom line comparing the 2014 quarter with the 2013 quarter. Do you not see what is taking place? That will not change in 2015. On top of all that, you are going to be seeing a flurry of restructuring charges being taken every quarter throughout 2015. Again, you need to get out in front of this with your analysis.

    My crystal ball says the shares will likely settle in the $2.00 to $2.50 range once the earnings announcement is out of the way. There may be some dips periodically into the $1.50 to $2.00 area, and likewise pops to the $3.00 to $3.50 range as the periodic pump from SA articles take effect. However, $5.00 will not be seen during 2015, and possibly never again unless the company makes major changes and is successful with them. Should the company get lucky and manage to convince another company to buy it, there will be no premium paid to shareholders. This is a sinking ship - that's not to say the shares won't be "tradable" by some folks who will make money flipping in/out, but it is not "investable" in my book. It is a typical value trap now more than ever.
    Jan 25, 2015. 07:14 AM | 2 Likes Like |Link to Comment
  • LeapFrog Misses Guidance By A Mile [View article]
    Very good article - finally one that puts the truth out there and doesn't sugar coat it as most all LF articles have done for the past year and in the past 24 hours have all been proven wrong.

    The last paragraph says it all.

    I personally think it's the beginning of the end for LF and now more than ever it is nothing more than a value trap. The balance sheet today is worse than yesterday, and tomorrow it's going to be worse than today. You don't invest in a money losing company like this for its balance sheet. With this one, you can't even invest in management as they have proven their incompetence.

    I really do not understand the logic for investing now, other than trying to catch a falling knife. If there was a basis for valuation that might help, but there really is none. All I see are superficial subjective superlatives given to the company and the products. Nobody denies them, but it doesn't mean they can sell them profitably. The same way that the cellphone has made pagers obsolete is exactly what generic tablets are and will continue doing to the LeapPad. As far as LeapTV - nothing more than a hail Mary pass - which was fumbled.

    I see $1s within months.
    Jan 23, 2015. 11:50 PM | 3 Likes Like |Link to Comment
  • SMTP Inc.: Short Term Pain Yields Big 2015 Upside [View article]
    Great questions Derek. I'm interested in the answers as well.

    As far as the dividend, I will give you my view. The reason the company has paid the dividend and has maintained it at a high level and payout is because as mentioned in my comment above, it has been the mechanism for the majority shareholder to extract cash.

    However, now that the majority shareholder has filed to (potentially) sell all of his shares in the shelf filing that Lisa has referenced above, it may be a prelude to a reduction/elimination of the dividend.

    That is my personal view and nothing more.
    Jan 23, 2015. 08:36 PM | Likes Like |Link to Comment
  • U.S. Steel: After A 50% Drop, This Stock Looks Strong For Value Investors [View article]
    New 52 week low today. Goldman cuts outlook on iron ore industry.

    Don't be blinded by the smoke screen here - company is losing money, not profitable. Playing financial games with non-GAAP numbers throwing out non-recurring expenses, and aided by tax credits.

    Company will likely post a good size GAAP loss for 2014Q4 and thus make FY2014 a loss.

    Look for shares to go to $10 to $15 range during the year - earnings power is weak.
    Jan 23, 2015. 08:25 PM | Likes Like |Link to Comment
  • LeapFrog Is Selling Below Its Liquidation Value [View article]
    LeapTV is going to turn out to be nothing more than a money pit. As with the LeapPad vs. generic tablet discussion, the same will hold true with LeapTV vs. mainstream console. Though LeapTV may well be an incredible/wonderful product, most parents will not be spending the money for another console and the apps to go along with it. If investing in a console, most will opt for one the entire family can enjoy and last longer. Certainly it will attract some segment, and affluent families will not think much about the cost. However, it will not gain the mainstream following which Leap is no doubt hoping for to make it a blockbuster product.

    Regardless, the shares are dead money for another 10 months minimum.
    Jan 23, 2015. 09:21 AM | Likes Like |Link to Comment
  • Wet Seal Should Skip The Malls With Version 2.0 [View article]
    I too am confused by the last paragraph. What's your thesis - that the existing shares will not be terminated or diluted into oblivion upon emergence from bankruptcy?

    Anyone who puts any money into WTSL shares "as an investment" deserves to lose it all. If you're putting your weekly lotto money into the shares, I can appreciate that - you'd lose it all either way.
    Jan 23, 2015. 08:03 AM | 1 Like Like |Link to Comment
  • Lentuo International's Growth Plan Could Reward Investors [View article]
    The share price tells everything.

    To be completely honest, as time goes on, I find it more promising betting against your analyses which have proven to be very shallow.

    None of my comments on this article were deleted.

    Thank you for your interest in my posts!
    Jan 23, 2015. 07:37 AM | 1 Like Like |Link to Comment
  • LeapFrog Is Selling Below Its Liquidation Value [View article]
    In this market over the past year or two, I've seen an overwhelming number of novice investors become enamored with these value traps. There are many of them around, and SA authors who scratch the surface are drawn to them - look at how many glowing LF articles there have been this past year...look at the Y! Finance blogger who just days ago posted "6 Reasons To Consider LeapFrog" - all wrong.

    This market is not forgiving, and when a company misses so incredibly badly, when you have all of these novices who were already jammed into the stock for these same reasons all the way up to $10/share, there is going to be a mass exodus. The shares are going to remain low for an extended period until there is some glimmer of light at the end of the tunnel - which there may not be.

    Investors should steer clear until things settle down. There will be no hurry to buy shares if you really want them. If you are really looking to be in it for the long haul, then buy just a little today and get in with the mindset that you will be averaging down.

    Now trading below $2.50.
    Jan 23, 2015. 07:29 AM | Likes Like |Link to Comment
  • LeapFrog Is Selling Below Its Liquidation Value [View article]
    The time to bet your money on a takeover is when a company is operating from a position of strength, not weakness.

    Liquidation value is meaningless while a company is a consistent money loser - it throws all calculations out the window because tomorrow that value is even less.

    Liquidation value is also meaningless for an operating company and is usually inflated because inventory is usually overvalued even applying 50% discount to carrying value.
    Jan 23, 2015. 06:48 AM | 1 Like Like |Link to Comment
  • LeapFrog Is Selling Below Its Liquidation Value [View article]
    Dominating best seller lists in their niche is great, but it obviously means that the niche is shrinking or smaller competitors are eroding their dominance.

    "Net sales will be approximately $145 million compared with prior guidance of $220 million to $240 million."

    The company is in serious trouble and now has another three quarters of losses coming. That will make seven consecutive quarters posting losses.

    Shares will likely not see $5 during 2015.

    Stay away from this value trap.
    Jan 23, 2015. 06:39 AM | Likes Like |Link to Comment
  • LeapFrog Is Selling Below Its Liquidation Value [View article]
    Traded below $3 after hours and will likely go there in coming months.
    Jan 23, 2015. 06:27 AM | Likes Like |Link to Comment
  • LeapFrog Hopes To Hop Into The New Year [View article]
    "•Fourth quarter gains will improve LeapFrog's balance sheet. "

    Absolutely incorrect.

    ===

    "In fact, in order to pull off a year that mirrors recent years, Leapfrog would need a fourth quarter that looks like: Sales of $250 million..."

    "•Net sales will be approximately $145 million compared with prior guidance of $220 million to $240 million."
    Jan 22, 2015. 09:21 PM | Likes Like |Link to Comment
  • LeapFrog Is Extremely Undervalued, Company Should Open Content Library And Repurchase Shares Now [View article]
    "We expect our net sales to decline in the fourth quarter," continued Mr. Arthur. "However, we cannot provide a sales estimate at this time as we continue to evaluate our retail inventory levels coming out of the holidays. We are, therefore, withdrawing our prior guidance for the current fiscal year ending March 31, 2015. We expect to provide guidance for the new fiscal year ending March 31, 2016, when we report our financial results for the fourth quarter ending March 31, 2015."

    When a company withdraws prior guidance and will not provide any guidance for another 3 months, it is time to get out of dodge. Shares traded at $2.75 after hours - look for them to test $2.00 at some point between now and when they provide that guidance in 3 months.

    LF shares are no longer an investment, merely a gamble.
    Jan 22, 2015. 08:35 PM | Likes Like |Link to Comment
  • LeapFrog Is Extremely Undervalued, Company Should Open Content Library And Repurchase Shares Now [View article]
    after hours announcement shows who was right and who was wrong.

    ===

    For our fiscal third quarter ended December 31, 2014, our preliminary unaudited results are:

    •Net sales will be approximately $145 million compared with prior guidance of $220 million to $240 million.

    •Net loss will be approximately $124 million, which includes non-cash charges of approximately $20 million for goodwill impairment and approximately $87 million for deferred tax asset valuation allowance.

    •Net loss per basic and diluted share will be approximately $1.77, which includes approximately $0.28 per share related to goodwill impairment and approximately $1.24 per share related to deferred tax asset valuation allowance. This compares to prior guidance of net income per diluted share to be in the range of $0.16 to $0.28, assuming an effective 37.5% tax rate.
    Jan 22, 2015. 08:26 PM | Likes Like |Link to Comment
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