There’s widespread disappointment on behalf of BPTR shareholders, myself included, concerning the recent poor performance of the stock.
The company delivered growth and earnings that justify a much higher valuation by any metric. The value is not being realized in the stock price at this time.
I believe there are two issues creating or adding to the problem. First is the challenge of institutional participation. The company is delivering institutional numbers, but the stock only has minimal institutional participation. The problem is the price and the exchange. Many institutions simply cannot buy a BB stock trading at $1. It falls outside of their rules for investing. If the company were to engage in a reverse split to get the price higher, then the problem would be limited supply. Institutions would have a hard time buying enough to matter without moving the price considerably.
The company could qualify for an AMEX listing on a market cap basis once the price gets to about $1.30. Perhaps that would help.
Secondly, I believe many people bought the stock out in front of year end earnings, hoping for a big surge in price. We got the earnings, had a big volume day, but no surge in price. I believe the poor market conditions and the stock’s downward movement are causing some selling in the stock. In the absence of buyers, the stock is drifting down.
With regard to 1st quarter numbers- I have spoken with management. I don’t know what the numbers will be, but I expect a continuation of growth in both sales and earnings as we have seen in the past. Perhaps Q1 numbers will get the stock back on track.
For those looking for a bargain basement price, here’s a chart for some guidance. Like so many microcap stocks, this one started to trade well last August. The uptrend has now been broken, so if you are a buyer, it’s time to look for favorable entry points.
The 38.2% retracement level gave way. Therefore, we now look to the 61.8% retracement level as the ideal entry point. The level would be $.73. If the stock trades that low, it would represent a perfect buying opportunity. It might not get there, but there is no telling what will happen in the current anemic market environment.
I suspect we will be looking for a lot of 61.8% retracements in the coming months. As always, comments and questions are welcome.
As you may recall several months ago, I stated that the large blocks below the market were BAD indications of things to come. I hate being “prophetic”, but the results speak for themselves. Do you remember me asking about NITE and SBSH being hugh sellers below the market when the stock was selling from $1.05/$1.10? I guess they were “smarter” than we.
Editor: I don’t know if smarter is the right way to put it. In the short term, and accurate observation. Things could change.
Re: Brandpartners, I was told a while ago by someone with more accounting skills than I have, and who had taken some time to go over BPTR’s numbers that the accounting is a bit irregular. One of the issues I understan is there are a large number of options that have not been expensed, but will hit the balance sheet under new accounting rules soon. Also, the gross revenue number is inflated by including all purchases on behalf of a client. A more accurate revenue number would be to show revenues for their contract management net of flow through purchases. The way BPTR shows revenue would be like a general contractor who is building a $10 million dollar building for a client showing the $10 million total building cost as revenue. A contractor would normally show their fees for overseeing the project, and these fees would typically include a small mark-up on all of the flow-through invoices that they approve and send on to the client for payment. Perhaps you could ask management to clarify this information for you. I always enjoy your comments and insight, keep on digging up some good investment ideas.
Editor: I’m not sure about the options issue, but I can commnent on the revenue issue. No matter how they book their revenues, it doesn’t change the profit and cash flow picture. The bottom line is the bottom line. Option expenses might negate the EPS somewhat, but won’t change the positive cash flow. That is a fact, and there is no argument against it. Count the sales any way you want- the profits are still there.
“Effective April 11, 2005 the Company finalized agreements with five former directors and officers as well as one current director (the “Option Holders”) whereby the Option Holders surrendered an aggregate of 1,050,000 out of 1,400,000 options previously granted to the Option Holders under the Company’s 2001 Stock Incentive Plan. The Company further agreed to amend the terms of the options by providing a cashless exercise provision. The Company has agreed to register the shares of common stock underlying its 2001 Stock Incentive Plan.” COMMENTS: This 8-K filing was made on 4/15/05. Reduces potential dilution to the company.
Editor: That hardly means anyone is selling. They still have to do the filings to sell, and no one has done any filings.
Do you know why Richard Levy is selling his stock?
Editor: How would I know?- probably needs a few bucks to pay his taxes.
Do you know anything about the 59 000 share trade at 60 cents at about 4:03p.m.?
Editor: No, I don’t. Probably some market maker reporting an off market trade to meet his compliance needs. I do know a couple of funds who are beginning to accumulate again at these levels.
Have reached a bottom, bang on the 200MA? The compnay has been very shy with issuing news this last month. Given its forcast $70 mill in revenue whats happened to all the contract wins???
Editor: I don’t know. I am expecting a strong Q1 report. The company has never been to frothy on news. I am just hanging in there, and am a buyer if it gets near $.70.
yeah, this stock is really hitting the big time, $0.04/share!
Editor: Dumped this coverage years ago. I don’t know why you are commenting on it.