Newsletter

Recent Performance- Riskless Rebound Portfolio and Cross Media Trading Alert

November 5, 2001
Volume IV, Issue 95
Email : info@otcjournal.com
URL : http://www.otcjournal.com

To OTC Journal Members:

Quick Note- Before deciding if you want to participate, please read the OTC Journal's section on Trading Alerts found on the left hand menu bar of our home page. For a Track Record of former Trading Alerts, Click Here.
 

Trading Alert- Cross Media Marketing (AMEX: XMM)


Our last Trading Alert on September 5th was Cross Media Marketing at $1.30. The stock traded up to $1.65 for a 27% return five days after our release, making many of our members very happy with a nice short term gain. In fact, we are convinced the stock would have continued higher had the September 11th disaster not derailed the entire market.

Just like the stray cat you have fed, the OTC Journal is back for more as we had such a great meal the first time around.

Cross Media closed at $6.70 today, but it is really back at the $1.30 level from September 5th. The company completed its merger with Lifeminders on October 25th and did a 1 for 5 reverse stock split. Therefore, split adjusted the stock has returned to the $1.30 level we had so much success with the first time around.

Breaking news on the company just after the market closed today puts Cross Media back on our radar screen. The OTC Journal is bringing this breaking news to you first.

With the Lifeminders merger finally completed, Cross Media is now positioned to enlighten us about future performance. The company revealed today that it anticipates 50% organic growth in 2002, leading to revenues in excess of $150 million, and EBITDA earnings of $23 million. Net earnings are expected to be $15 million, or $1.15 per share post reverse split.

For investors who still believe in looking at PE Ratios, the stock is therefore trading at 5.8 times projected 2002 net earnings with a 50% growth rate. Here is an excerpt from today's news release:
 

Preliminary projections call for the Company achieving record revenues and earnings for the year ending December 31, 2002.  Revenues are projected to be in excess of $150 million, representing a 50% increase over expected revenues for 2001.  The revenue projection is based on organic growth from all operations and do not give effect to any potential acquisitions.

Net income is expected to grow in excess of 50% resulting in a minimum of $15 million of net earnings and $1.15 earnings per share based on a fully diluted base of approximately 13 million common shares outstanding. EBITDA (defined as earnings before interest, taxes, goodwill, amortization, interest charges and non-cash operating expense) is projected to be in excess of $23 million compared to calendar 2001’s projection of $16 million to $18 million.
 


 
Recent Developments

We have interviewed management extensively about the state of their business, and have learned the company has benefited dramatically from the Attack on America.

Since the attack, consumers are staying home more. Ratings on TV shows are up, and rental activity at Blockbuster is exploding. People are more prone to consume their entertainment and media at home. This is a mega trend that analysts expect to continue.

The company describes itself as "a technology- driven cross media marketing company integrating its sophisticated direct marketing skills with cutting-edge technologies, including interactive voice response and web-based systems, resulting in a multi-dimensional marketing platform for the international exploitation of products and services."

Cross Media had the most successful week in its history just after September 11th. Magazine subscription sales, which represent 75% of the company's revenues, went through the roof. Consumers were demonstrating a desire to stay at home and be informed.

With market conditions improving, investors are seeking undervalued situations with real growth. Cross Media, head quartered just a few miles from the Wall Street Financial district, is bound to end up on the radar screens of institutional investors now that the stock has been recapitalized into the $6.75 range where fund managers will look at it.
 

Trading Alert Details

Here are our thoughts on this Trading Alert on Cross Media Marketing (AMEX: XMM).

  • The early September move in the stock from the high $6's to nearly $9 came in conjunction with the OTC Journal's last Trading Alert on the stock.
  • According to the company, earnings for 2002 will come in at about $1.22 per share. At $6.75 this makes the stock ridiculously undervalued.
  • The first analyst report on the company was issued August 30th, projecting $27 (split adjusted) in 18 to 24 months.
  • The stock is sitting directly on its support line with volume increasing. Clearly, it is under accumulation and today's news could be the required catalyst to move this stock to the upside.
  • Buy up to $7.25 which gives you room to make money if the stock trades in our favor. If you can get in under $7 it would be ideal. Very low risk entry level.
  • Set your Stop Loss at $6.00 to give you some room for a short term pullback or what ever your risk tolerance is.
  • If the stock can get through $8.50 in the next few weeks should go higher it could find its way to nearly $10 with a little luck and favorable market conditions. A move to $8.50 would be the same percentage return we provided from our last Trading Alert on this stock.
  • Because of their growth and profitability you can comfortably put this one in your long term speculative portfolio.

The OTC Journal intends to publish follow-up editions on this company. This stock has the potential to be a huge winner.

This newsletter is our opinion only, and not a solicitation to buy this stock. Make up your own mind. If you are looking for a short term trade limit your loss if the stock goes against you. As always, we remind you before making any investment decisions please review the section on our home page on Trading Alerts. Read our section on Successful Microcap Investing, paying particular attention to the Trading Strategies Section. The track record on our previous alerts can be obtained by clicking here.


In the interest of full disclosure we inform you that one of our editors owns 3000 shares of Cross Media in his own account with an average cost basis of $8.28. Our editor may buy and sell the shares at any time at his own discretion. This should be viewed as a potential conflict of interest.

Here is the complete text of today's news release for your review:
 
Monday November 5, 4:05 pm Eastern Time
Press Release
SOURCE: Cross Media Marketing Corporation

Cross Media Expects 2002 Revenues and Earnings to Grow by 50+%
Revenues Projected to Surge to $150 Million, Earnings to $15 Million, EPS to $1.15

New York, NY – November 5, 2001 -- Cross Media Marketing Corporation (AMEX: XMM), a leading technology-driven marketing company committed to redefining the art and science of direct marketing, today announced that it expects both revenues and earnings for 2002 to increase in excess of 50%. The announcement was made by Ronald Altbach, Cross Media Marketing’s Chairman and Chief Executive Officer.

Preliminary projections call for the Company achieving record revenues and earnings for the year ending December 31, 2002.  Revenues are projected to be in excess of $150 million, representing a 50% increase over expected revenues for 2001.  The revenue projection is based on organic growth from all operations and do not give effect to any potential acquisitions.

Net income is expected to grow in excess of 50% resulting in a minimum of $15 million of net earnings and $1.15 earnings per share based on a fully diluted base of approximately 13 million common shares outstanding. EBITDA (defined as earnings before interest, taxes, goodwill, amortization, interest charges and non-cash operating expense) is projected to be in excess of $23 million compared to calendar 2001’s projection of $16 million to $18 million.

“Notwithstanding the serious disruptions in our economy, our growth continues unabated as we continue to demonstrate the inherent strength and stability of this remarkably powerful and responsible multi-channel, multi-product, earnings-generating marketing organization we are building,” stated Mr. Altbach. “We continue to be extremely successful in our pursuit of earnings and revenues as the numerous and impressive Cross Media milestones proved with $55 million in revenues for 2000; $100 million expected for 2001; and now revenues in excess of $150 million for 2002 with earnings in excess of $15 million.”

Mr. Altbach continued, “As a result of our acquisition of LifeMinders last week, we are now well fortified with a solid balance sheet, a significant cash position, a remarkable 25 million consumer database, state-of-the-art technology and a proven management team. Our mantras are growth, earnings and increasing shareholder value.” 

“During 2001, the Company has converted or retired all subordinated debt and redeemed or converted our preferred stock resulting in a highly simplified balance sheet,” concluded Mr. Altbach.” 

About Cross Media Marketing Corporation 

Cross Media Marketing Corporation is a leading technology-driven marketing company engaged in sophisticated targeted marketing utilizing multiple direct marketing channels including email, voice, direct mail, interactive voice response and Internet with its proprietary X-ID™ profiling technology, resulting in a multi-dimensional marketing platform. In October, 2001, Cross Media acquired LifeMinders, an online direct marketer, which resulted in an aggregate 25 million consumer database, a significantly improved balance sheet and a substantial addition to the Company’s technology platforms for targeted email delivery. Cross Media Marketing seeks to achieve revenue growth and earnings leverage by cross marketing a broad array of products and services, including membership services, telecom services and high-end bundled periodicals, through multiple channels to an expanding multi-million customer base utilizing state-of-the-art direct marketing strategies.  Through Cross Media Marketing's voice-driven customer acquisition programs, Cross Media Marketing contacts and retains critical data on more than thirteen million persons annually. The Company continues to exploit its expansive database in other technology-driven marketing channels, facilitating additional e-commerce transactions to increase revenues while concurrently lowering costs and increasing margins.  For more information about Cross Media Marketing, visit the Investor Relations section of www.xmmcorp.com or email investor-relations@xmmcorp.com. 

Cautionary Statement Regarding Forward-Looking Statements 

This announcement contains forward-looking statements that involve risks and uncertainties that could affect Cross Media's ability to achieve the anticipated financial results.  Additionally, certain statements contained herein and in the information posted on the web site of Cross Media that are not based on historical fact are "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.  Cross Media intends that forward-looking statements contained herein and on its web site be subject to the safe harbor created thereby.  Such forward-looking statements are based on current expectations of management, including the weighted average number of shares outstanding, and involve certain risks and uncertainties.  Cross Media's actual results, performance or achievements could differ materially from the results, performance or achievements projected in, or implied by, such forward-looking statements as a result of risk factors, including, without limitation, the following: Cross media's ability to integrate the recently acquired LifeMinders, Inc. operations and to make additional strategically appropriate acquisitions; the adequacy of accounts receivable reserves, changes in economic conditions or a material decline in the availability of consumer credit, interest rate fluctuations, Cross Media's limited operating history, competitive factors, the need to manage growth, volatility in the market price of the common stock and the securities markets generally, risks relating to government regulation of telemarketing and Internet marketing activities, Cross Media's ability to exploit its database and technological innovations and potential dilution.  These factors are described in detail in Cross Media's filings with the Securities and Exchange Commission, including, where applicable, its most recent filings on Forms 10-KSB, 10-QSB and 8-K, and registration statement on Form S-4.  Cross Media's filings with the SEC are available to the public from commercial document-retrieval services and at the web site maintained by the Sec free of charge at http://www.sec.gov.  Cross Media does not assume any responsibility to update the information included in this press release or on its web site, whether as a result of new information, future events or otherwise.

FOR:     Cross Media Marketing Corporation   Middleberg Euro for Cross Media Marketing
CONTACT:  Alfonso J. Cervantes, Senior Vice President  Bill Ferguson
212.457.1179     212.699.2742
  acervantes@xmmcorp.com    williamf@middleberg.com
 


Charts Provided Courtesy Of TradePortal.com

The OTC Journal is a proud partner of the SwingWire.com Online Investment Community. A next generation Online Analyst Exchange providing Members the ability to search, review, track and monitor some of the Internet's best Online CAs (CyberAnalysts). Members have the opportunity to potentially achieve higher returns by viewing top performing portfolios and receiving real-time alerts from favorite CAs. 

SwingWire.com also has a lucrative incentive model for experienced investors and traders who consistently outperform the market. Share market ideas with other like-minded investors, establish a proven track record, provide insightful commentary, attract followers and ultimately become one of the Internet's highest paid and most sought after CyberAnalysts! 

Click here to receive your FREE 30-Day Trial Membership with no further obligation. Sign Up Today! 
 

Disclaimer
The OTCjournal.com Newsletter is an independent electronic publication committed to providing our readers with factual information on selected  publicly traded companies. All companies are chosen on the basis of certain financial analysis and other pertinent criteria with a view toward  maximizing the upside potential for investors while minimizing the downside risk, whenever possible.  Moreover, as detailed below, this publication accepts compensation from certain of the companies which it features.  Likewise, this newsletter is owned by MarketByte, LLC.  To the degrees enumerated herein,  this newsletter should not be regarded as an independent publication.

Click Here to view our compensation on every company we have ever covered, or visit the following web address:  http://www.otcjournal.com/disclaimer.html for our full profiles and http://www.otcjournal.com/trading-alerts/disclaimer.html for Trading Alerts.

All statements and expressions are the sole  opinions of the editors and are subject to change without notice. A profile, description, or other mention of a company in the newsletter is neither an offer nor solicitation to buy or sell any securities  mentioned. While we believe all sources of information to be factual and reliable, in no way do we represent or guarantee the accuracy thereof, nor the statements made herein.

The editor, members of the editor's family, and/or entities with which they are affiliated, are forbidden by company policy to own, buy, sell or otherwise trade stock for their own benefit in the companies who appear in the publication.

The profiles, critiques, and other editorial content of the OTCjournal.com may contain forward-looking statements relating to the expected capabilities of the companies mentioned herein.

THE READER SHOULD VERIFY ALL CLAIMS AND DO THEIR OWN DUE DILIGENCE BEFORE INVESTING IN ANY SECURITIES MENTIONED. INVESTING IN  SECURITIES IS SPECULATIVE AND CARRIES A HIGH DEGREE OF RISK. THE INFORMATION FOUND IN THIS PROFILE IS PROTECTED BY THE COPYRIGHT LAWS OF THE UNITED STATES AND MAY NOT BE COPIED, OR REPRODUCED IN ANY WAY WITHOUT THE EXPRESSED, WRITTEN  CONSENT OF THE EDITORS OF OTCjournal.com.

We encourage our readers to invest carefully and read the investor information available at the web sites of  the Securities and Exchange Commission ("SEC") at http://www.sec.govand/or the National Association of Securities Dealers ("NASD") at http://www.nasd.com. We also strongly recommend that you read the SEC advisory to investors concerning Internet Stock Fraud, which can be found at  http://www.sec.gov/consumer/cyberfr.htm. Readers can review all public filings by companies at the SEC's EDGAR page. The NASD has published information on how to invest carefully at its web site.


Unsubscribe Here

You can unsubscribe from this list at any time by Clicking Here and HITTING SEND. If you are having difficulty removing yourself or wish to change your address please go to http://listserv.otcjournal.com/opt.cgi?.

 
 

Disclaimer

The OTC Journal Newsletter is an electronic publication committed to providing our readers with useful information on publicly traded companies. The Newsletter contracts with publicly traded companies and receives compensation from them or third parties as payment for publishing information and opinions about the company and the trading market for their securities. Principals of the Newsletter may also purchase or sell securities of the companies in the open market from time to time. The positions, if any, that the Newsletter or its principals presently maintain in the securities of the companies are disclosed here (click here) and should be considered in making an investment decision regarding these companies securities. The Newsletter and its principals reserve the right to acquire additional shares or liquidate some or all of the positions they may hold in the issuer’s securities at any time in the future without further notice. These publications should not be considered to be independent publications concerning the company.

All statements and opinions expressed herein are those of the editors and are subject to change without notice. The Newsletter maintains editorial control over its publications and the companies profiled therein do not have any editorial rights concerning the information published about them. While we believe all sources of information provided by us and contained in our publication to be accurate and reliable, we cannot and do not guarantee the accuracy of information we received from third parties.

We encourage our readers to invest carefully and read the investor information available at the web sites of the Securities and Exchange Commission ("SEC") at http://www.sec.gov and/or the National Association of Securities Dealers ("NASD") at http://www.finra.org. We also recommend that you read the SEC advisory to investors concerning Internet Stock Fraud, which can be found at http://www.sec.gov/consumer/cyberfr.htm. Readers can review all public filings by companies at the SEC's EDGAR page. The NASD has published information on how to invest carefully at its web site.

The information found in this profile is protected by the copyright laws of the United States and may not be copied, or reproduced in any way without the express written consent of the editors of otcjournal.com.

UNSUBSCRIBE

You can unsubscribe from this list at any time by Clicking Here. If you are having difficulty removing yourself or wish to change your address please go to http://www.otcjournal.com/opt/.