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Despite the hideous market conditions,
you have to give our crack technical team credit for coming up with a great
trading idea in last week's edition entitled "Three
Biotech Trading Ideas For a Bounce". The three ideas were Imclone
(IMCL), Boston Scientific (BSX), and Protein Design Labs (PDLI).
IMCL opened below the stop loss,
so it was never in play. BSX was suggested at $30.50, and is currently
trading above $30 and so far is a non event. PDLI has been one of the
few big wins in the market over the past week with everything getting clobbered-
the entry level was $15.60, and PDLI is currently trading at $17.56 for
a net gain of 12.5% in less than a week. Our price target was $17.25. Time
to sell and take your profit.
That's a pretty good win in a very
BB: NWWV) Reports Year End Numbers: Wave Gets Bigger
NeWave reported year end numbers
last week, and the company is continuing to deliver growth at a staggering
pace. Year end numbers for small companies are usually old news as it is
reported more than three months after the period ends. However, you can
learn quite a bit from the 10K if you drill down.
For those who need a refresher course,
owns and operates www.onlinesupplier.com.
They have a turn key solution for putting individuals in business on the
internet for a nominal fee. A mere $9.95 gets you started, and an ongoing
monthly fee of $29.95 keeps you going.
NWWV has clearly hit a sweet
spot with consumers, and the proof is in the numbers. The company is delivering
unbelievable growth, especially when you consider it was a zero revenue
start up in August of '03.
Here's a quick recap of the numbers
as disclosed in the 10K filing:
The revenue number of $6.548 million
is outstanding when one considers it was a start up 18 months ago. The
$3.8 million loss is troubling unless you drill down into that number.
Revenues: Rose from $1.126 million in
'03 to $6.548 million in '04- A staggering 481% year over year growth
Shareholders Equity: Rose from -.46
million to +.224 million- low but very positive move in the right direction.
The shareholders equity gives zero valuation to the 150,000 paid subscribers,
so it doesn't really reflect the true value of the company.
Gross Profits: Since it is a service
company revenues are nearly 100% gross profits.
Net Loss: $3.8 million
Of the $3.8 million loss, a full
$3.7 million was non-cash, and mostly one time. $1 million in expenses
went to depreciation and amortization. Another 2.7 million was associated
with stock issuance to employees, board members, and consultants.
Therefore, the cash flow picture,
which is the most important factor for smaller companies, was a loss of
only $100,000. When you consider the company moved its business to a much
larger location in June, this number becomes in more extraordinary. After
taking out the non-cash expenses and the one time moving expenses, I wouldn't
be surprised if NWWV was cash flow positive from operations in '04.
Unlike many of its microcap brethren
that are breaking trend lines in this fairly brutal market, NWWV
is holding up quite nicely. The company's stellar performance is no doubt
keeping potential sellers on the sidelines.
While the year end numbers look great,
they disguise what was a moderately weak 4th quarter, which is strictly
seasonal. The company will always have a seasonally weak 4th qtr. Q1 '05
numbers should be the best in company history.
NWWV is focused on the roll
out of their new subsidiary "Auction Liquidators". They are putting together
a nationwide network of drop off centers for selling goods on eBay. Once
fully implemented, NWWV will use its current base of over 150,000
individuals serviced to drive business to the eBay drop off centers. This
could turn out to be a very prolific area of growth for the company.
Furthermore, NWWV is getting
ready to launch a nationwide infomercial featuring widely recognized Bob
Eubanks as the host. You will see it on TV this summer.
Therefore, the future looks for bright
for NWWV. During q1 of '05 NWWV hit the 150,000 members serviced
mark, and probably recorded the strongest quarter in company history.
I have always felt the magic number
for this company would be $1 million per month in revenues. They are approaching
that number now pre infomercial, and if one time, non-cash expenses are
kept to a minimum this year, NWWV could conceivably turn profitable.
This one is a definite accumulate
for those who want to participate in the growth of this company over the
next several years. Since the stock has not participated in the recent
market declines, it should do very well as market conditions improve. Long
term holders: Continue accumulating.