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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.
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Trading Alert-
Cross Media Marketing (AMEX: XMM) |
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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.
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Recent
Developments |
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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.
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Trading
Alert Details |
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Here are our
thoughts on this Trading Alert on Cross Media Marketing (AMEX: XMM).
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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.
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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.
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The first analyst
report on the company was issued August 30th, projecting $27 (split
adjusted) in 18 to 24 months.
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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.
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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.
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Set your Stop
Loss at $6.00 to give you some room for a short term pullback or what ever
your risk tolerance is.
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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.
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Because of
their growth and profitability you can comfortably put this one in your
long term speculative portfolio.
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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
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