Trading Alert: Cross Media Marketing (AMEX: XMM)

September 5, 2001
Volume IV, Issue 76
Email :

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)

If there is such a thing as a growth/value investment in a micro cap stock, Cross Media is it. We believe Cross Media is significantly undervalued at $1.30. Our short term target is $2. One Wall Street analyst projects $5.25 (up 320%) over the next 18 to 24 months.

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."

Approximately 75% of their revenues come from the sale of magazine subscriptions. Additional product lines are being added. The company has mastered the art of customer profiling and targeting the consumer based on the demographic probability of a purchase.

Cross Media has exploded in growth of both sales and earnings over the past year, nearly all generated internally. In 2000 Cross Media achieved $61.9 million in sales and lost $44.7 million (all non cash one time charges related to acquisitions- fuzzy math).

Cross Media is on track to have a blockbuster year in 2001. Management estimates September quarterly earnings to come in at about $.08 per share, and December quarterly numbers at about $.10 per share. Here is management's forecast for 2001 which appeared in a recent press release:

The Company expects to report revenues for 2001 of between $98 and $111 million and net income of $9.2 million to $10.6 million, or $0.22 to $0.25 per share, excluding the effect that the acquisition of LifeMinders may have. This will represent a revenue increase of 77% to 100% over fiscal 2000. 

Recent Developments

A quick look at the chart reveals the stock traded beautifully from late April until the end of July. The stock appreciated from about $.90 to $2.00 for a 120% gain which correctly reflected the growth of their business. In the third week of July the stock sold off abruptly in conjunction with a merger announcement.

On July 19th Cross Media announced it tendered an offer to purchase Lifeminders (NASDAQ: LFMN) in a deal valued at $68.1 million. The terms were extremely complex offering several alternatives to Lifeminder's shareholders. 

Many clever investors chose to sell the holdings in Cross Media and buy shares of Lifeminders as there was an arbitrage play which made owning Lifeminders more attractive.

Shares of Cross Media have pulled back to a level where this arbitrage play is no longer valid, making shares of Cross Media more attractive at these levels.

If the transaction is approved, Cross Media will end up with an additional $25 million in cash and a database of 20 million consumers. In return, Cross Media will give up 25 million shares.

On August 30th, 2001, Weatherly Securities, a Wall Street boutique firm issued a speculative buy recommendation on the stock. Analyst Raymond Moore notes in his research report: "At $1.30 a share, the stock trades 83% below its 1999 high of $8.00 per share and only 5.9 times estimated 2001 earnings." "If XMM were afforded a price earnings multiple of the conservative Dow Jones Industrials (21.7 time 2001 earnings based on Barron's consensus August 27, 2001) the stock price would be $5.40 per share, or some 300% above current levels."

Insiders Are Buying

Our Trading Alert was triggered by today's SEC filings. Investors who follow insider activity know Insider Selling in not necessarily bad, but Insider Buying is always a positive sign.

The OTC Journal is the first to pick up on today's SEC filings which indicate that senior management is buying. Ron Altbach (Chairman), Chet Borgida (CFO), Richard Kaufman (COO), Andy Nelson (Senior VP of Sales), Dick Prochnow, and Bill Morrisey have all purchased shares in the open market since August 27th for their own accounts.

It is a very positive sign to see insiders buying, but when the entire senior management team and board members are all buying stock for their own accounts you can be certain they believe in the future of their company.

Trading Alert Details

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

  • As depicted in this chart, Cross Media has given up most of its April through July gains. However, technicians would agree that both the MACD and Stochastic indicators show the stock is poised to begin its rebound phase.
  • According to the company, earnings for 2001 will come in at about $.22 per share. At $1.30 this makes the stock ridiculously undervalued.
  • Numerous Senior Management and Board Members are buying for their own accounts.
  • The arbitrage play which made Lifeminders more attractive than Cross Media is gone at these levels.
  • The first analyst report on the company was issued August 30th, projecting $5.40 in 18 to 24 months.
  • Buy up to $1.50 which gives you room to make money if the stock trades in our favor. If you can get in around $1.30 it would be ideal. Very low risk entry level.
  • Set your Stop Loss at $1.00 to give you some room for a short term pullback or what ever your risk tolerance is.
  • If the stock can get through $1.50 in the next couple of days it should go higher it could find its way to nearly $1.75 to $2 short term.
  • 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 7500 shares of Cross Media in his own account with an average cost basis of $1.98. 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.

Charts Provided Courtesy Of

The OTC Journal is a proud partner of the 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. 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! 

The 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: for our full profiles and 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 may contain forward-looking statements relating to the expected capabilities of the companies mentioned herein.


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 We also strongly recommend that you read the SEC advisory to investors concerning Internet Stock Fraud, which can be found at 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



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 and/or the National Association of Securities Dealers ("NASD") at We also recommend that you read the SEC advisory to investors concerning Internet Stock Fraud, which can be found at 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


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