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"Risk comes from not knowing what you're doing" Warren Buffett I look and sift the world for such misplaced bets. When I occasionally find one, I first exploit it for profit. Then, I write about it for anyone else interested in such ideas. Twitter: @unemon1 Scribd:... More
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  • Size Matters ... A Simple Strategy Based On EV ... Shows You Why

    Here are the results of a sector-specifitc-strategy (Industrials only) I have been using over the past couple of years ... ... including stocks with a Market Cap of >$150m --> 26.74% p.a. return

    Were I to restrict my Stocks Universe to stocks with a Market Cap of >$1,000m? The results would be only --> 21.72% p.a. return (With a deterioration of all the risk-measures).

    Were I to restrict my Stocks Universe to stocks with a Market Cap of >$10,000m? The results would be only --> 6.81% p.a. return (With a deterioration of all the risk-measures). Useless Strategy!

    Mar 14 6:07 PM | Link | Comment!
  • The Ultimate Reason … Why ONVO Will Be Trading < $4 …. By February 2015

    Finally analysts (actually 1) have started (Feb 2014) to quantify their Expectation about Organovo future revenue! Within the next 9-11 month we should finally be able to determine whether or not the Expectations surrounding ONVO are legit! No more Excuses.

    In my previous posts (1,2,3, 4), I have outlined the reasons why I do believe ONVO will fail to succeed / generate any substantial revenue.

    As soon as investors (especially Retail Investors) start to realize ONVO will not be able to meet investors'/analysts' expectations ... the bubble will start to pop.

    I do expect this scenario to materialize no later than 2014Q2 results' release (November 2014) … with escalating selling activity once 2014Q3 10Q is filed (Beginning of February 2015).

    Organovo is expected to generate $15.7m in revenue for FY2014 (Ending March 31, 2015) and $33.4m in FY2015 (Ending March 31, 2016)

    Here a closer Overview:

    ONVO Investors should really be concerned with analyst estimate for FY2015 Revenue Growth of only 112%. You would expect such a promising company to have a higher revenue growth rate at the beginning of its revenue generating era… especially when the $mm amount is in the low 10s of $mm … and the technology is so "promising".

    The FY2015 revenue forecast … can help us … estimate in which Q of 2014 … we should start to see some significant revenue.

    If we assume a Q over Q Revenue Growth of 15% during FY2015 … if follows that 2015Q1 revenue should be approx. $6.7m.

    It is highly unlikely that any of the 2014Qs will show a revenue higher than the 2015Q1 figure (given the ramping up in Revenue) … In the best Case scenario therefore this is what we could expect for FY2014 …

    Or … more realistically… assuming a 15% growth rate starting after 2014Q2:

    Soon we will have the verdict.

    A read below 3$m for 2014Q2 revenue would be a huge red flag IMO …

    … while a read below $8m for 2014Q2&3 total revenue will definitely put an end to the …. Wannabe ONVO billionaire dreams!

    Were ONVO TO meet analysts' expectations?! … I would not buy … since at these prices it would still be overvalued. In that case … however … I do think … the bubble could persist for some additional time.

    Disclosure: I am short ONVO.

    Mar 10 9:43 AM | Link | Comment!
  • Power Plug Inc. (PLUG) … Simply Put … It's Just A Colossal Bubble! Uni-Pixel (UNXL) Style!

    Power Plug Inc. (NASDAQ:PLUG) … simply put … it's just a Colossal bubble! Uni-pixel (NASDAQ:UNXL) Style!

    In the most optimistic Scenario for PLUG pumpers … A 50%++ Downside is in the Cards!

    I guess you all are familiar with the PLUG's story … so … let's just go directly to the point.

    "Based on actual information supplied by ITA members, the US Factory Shipments Through 2012 and US Factory Shipments Through 2012-Bar Graph reveals shipments in the United States for electric rider trucks (Class 1 and Class 2 combined), motorized hand trucks (Class 3) and internal combustion powered trucks (Class 4 and Class 5 combined) since 1983." http://www.indtrk.org/market-intelligence

    Well … as you can see … PLUG isn't playing in a booming U.S. industry!! Please, remember that even PLUG defines its potential market at approx. $4b (

    Since 1990 total shipments are up only 50% (and down about 24% since the 2006 peak). The annual Growth rate has therefore been 1.84% p.a. over the past 24 years.

    The Electric Rider Segment growth has been slightly higher than the sector average, namely … 2.60% p.a. Total Shipments for 2012 were 49,126 Units. A 5% p.a. growth rate starting in 2013 … seems a generous enough assumption to me.

    PLUG's Gendrive, an eco-friendly product/technology … is likely to be a competitor to / substitute in … the Electric Riders Category (Classes 1&2).

    Assumptions:

    1. 2014 Classes 1&2 Units Shipped = 54,161
    2. 2014 Gendrive Units Shipped = 3,250
    3. Gendrive Price = $20,000
    4. Gendrive sales increase exponentially till 2017 … when Gendrive achieves a 20
    5. % Market Share. Then, the Market Share remains Constant.
    6. Service Revenue = 10% of Annual Gendrive Revenue
    7. Net Income (= FCF) Margin = 15%
    8. Discount Rate = 12%

    Btw … remember … here I am valuing PLUG … assuming a "Best Case" Scenario. What would happen if … problems were to emerge? eh eh eh !

    The model is very basic ... and it actually does favor PLUG bulls. According to analysts' estimates, on a 2014FY estimated $63.7m Revenue base … PLUG is expected to book a $9.9m loss

    Now you can see why I am building a Short Position in PLUG!

    Started Shorting in the $6.70s … shorted in the $8.20s …&… If this crazy market brings it to $12 … I will short even more … down the road!

    To me PLUG … just looks like … UNXL … 12 MONTHS AGO! … What do you think?

    To learn more about the technology behind Gendrive … I suggest you to have a look at this Seeking Alpha Article:

    http://seekingalpha.com/article/2075013-pulling-the-plug-on-the-fuel-cell-mania

    BTW: The only bullish analyst out there … is from Cowen and Company:

    Would you like to guess the name of the Bookrunner of the latest financing?

    Yup … that's Cowen.

    *ITA's manufacturing Members represent more than 90% of the forklift market in North America.

    PS: Current Market Valuation would theoretically only be "reasonable* (but not attractive) … only if the company were to be able to become a major player in the Transportation Refrigeration Units, Ground Support Equipment and Range Extenders industries (currently mentioned as Market Expansion Opportunities for GenDrive Architecture) .

    Disclosure: I am short PLUG.

    Additional disclosure: and hopefully, this insane Market ... will give me the chance to short more shared at higher prices!

    Mar 10 9:31 AM | Link | Comment!
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