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Varchild2008 (86.37)

February 2011



(EAG) American Defense Systems Chops Off APSG

February 28, 2011 – Comments (0)

A penny stock (EAG) American Defense Systems, which I have followed for 2+ years now, has just sold off APSG (their physical armor, armor barriers, business) to the West Coast Partners Fund.

This is because since EAG ever became a Stock to begin with they had never produced a profit and were stuck with millions of dollars of Debt Obligations.

They only reason EAG ever acquired APSG in the first place in order to transform into the IPO American Defense Systems, defense company, was sorta through what I called a "Loan Shark" deal....Not because there was anything wrong with WCPF ( absolutely not), but because the Deal was wrong to make in the first place.

Why would anyone want to put themselves into an immediate precarious position with WCPF to acquire APSG and form a Defense Company with 2 major lines of business? 

ADSI does Crew Protection KIts.....  Hugely Popular as these are Life Savers for Army / Marines.
APSG does the Barrier Armor, Vehicle Armor, etc.

In this case they leveraged themselves with a big time Debt in the form of Series A Preferred Shares.

The company never earned a profit despite landing millions of dollars in Contract Money from the Army + Marines and etc.  Their expenditures were through the roof I guess....

So anyhow... The Company had no ability to make any kind of money much less pay off the LOAN SHARK style deal to cancel out the Series A shares so they can be a Stand-a-Lone Company with APSG and ADSI and so on as subsidiaries.

So.. Now the company they acquired goes away into the hands of the Loan Shark Style Deal as what happens when one Forecloses on their home.

The C.E.O. put out a super ROSY statement claiming they successfully got rid of the Series A share deal!!!! *woo hoo*

And they claim that inspite of losing one of their biggest money makers in APSG, they can still make enough money to equal what they are losing.

The C.E.O. now has to earn enough money to buy back APSG from the Loan Shark.

They claim they have moved the business towards Stockholder Growth.


The way I see it nothing has changed.    EAG is in a worsening situation as it has to depend on
1 line of business to produce a Profit when it could not produce Profit when it had APSG.

Sorry Piscetelli but in my opinion I am in serious concern over the future of your company here....

Show us a Turn-A-Round Profit Creating Quarter and THEN you can create Stockholder Confidence in your latest move.  [more]



GREED Trumps Logic at (UBS) and (GS)

February 25, 2011 – Comments (0) | RELATED TICKERS: MNST

So we have a big Earnings Miss in Q4 2010 resulting in shares at (HANS) skyrocketing to near $60.00? 

Is it because one can easily paint Q4 2010 as a Fluke Miss Job that should be ignored?

Well, not if one can also show through the Earnings Report that Expenditures have spiked in multiple areas of the Business as HANS expands their Monster Energy Drinks and Juice Drinks to more countries.

1)  General and Administrative Expenses:  up .6% of Sales     $5.6 Million Increase  Y/Y

2)  Sponsorship and Endorsement Costs:   up $11.2 Million Y/Y  also higher as a percentage of net sales.

3)  Professional Service Fees:    Up  $13.4 Million

4)  Point of Sale Materials costs:  UP  $6.2 Million

5)  Effective Full Year Tax Rate:   UP  39.3 %   versus 37.8%

And what did GS and UBS come out and say?    HANS = GLOBAL   so continued increase in Sales will offset this somehow...

Gee brilliance....    As a Dr. Pepper Snapple Group (DPS) investor I remain positively skeptical here that (HANS) is somehow deserving of a 25 times P/E Multiple....

GS has a $60 price target... That probably pushes (HANS) to 25.5 to 26 times earnings.

DO YOU WANT TO PAY   25 to 26 TIMES EARNINGS  for a Beverage Company that has to skyrocket their Costs to boost their Sales and the Growth Rate seems to have Shrunk Considerably as a result?

Listen....    If I was a Tire Company and I sold 100,000 Tires in 2009....and earned $1 million net profit... and then I sell 200,000 Tires in 2010....what would be my Profit????

Would it be $2 Million?  and therefore I have a 100%  Double Bagger Sales/Earnings/Profit Growth?

Or would telling you that I had to spend $750,000  in 2010 in order to generate enough business world wide to sell the additional 100,000 tires + my Tax Rate has gone up 2%.

Now how BULLISH are you with my TIRE company?

GOLDMAN SACHS and UBS don't seem to care about (HANS) expenditures and Tax Rates and everything cutting into EPS.

But... When a high flying company boasts Record Sales Figures for 2010 and Record Sales in Q4 2010 and yet the EPS for Full Year is only 7 cents a share greater and Q4 2010 is less than Q4 2009?

How long do you think it will take Investors to realize that it is nothing more than abject GREED to sit there expecting HANS to translate Record SALES into its Historic 5 Year Growth Rate?

It will take YEARS....before HANS can get a handle on their expenses and costs and Tax Rates and so on... YEARS....  I would not sit there thinking that HANS deserves an insane P/E Multiple because of its Historic Growth Rates.... Because there's nothing HISTORIC about the growth as long as Expenses are cutting so deeply into Revenue.  [more]



See? Varchild TOLD YOU SO!!! (HANS) (DPS)

February 24, 2011 – Comments (3) | RELATED TICKERS: KDP , MNST

Waaaaaaay back sometime in Q4 2010 I wrote a post or three comparing Dr. Pepper Snapple against Hansen Natural Corp.

The point of the comparison was to show you statistic after statistic breakdown of the 2 companies and how it makes no sense for investors to be pricing (HANS) with a saidistic 23+ times earnings multiple...

People were about to price (HANS) at $60.00 a share came close to that...

Talk about ludicrous!!!

You have EPS comaparisons between the 2 stocks showing that Dr. Pepper Snapple was expected to produce far better earnings than Hansen in Q4 2010, as well as in Q1 2011....

The reality is that Stock Analysts were out there showing everyone the truth.... and big money investors seemed not to really give a hoot and kept merrily pricing up HANS into the stratosphere.

Duuuuuuuuhhhhhh   (DPS) earnings are superior??? and expected to be against (HANS)??????

Duuuuuuuuuuhhhhh  I don't care....  $49.00 a share.. $50....$51....$52.....$55...$56....$57.. yeeeeeeeeeeeeeeeeeeeeeehaw....

Seriously?? Sometimes it is super easy to see the absurdity in Wall Street.....  Sometimes it is so darn easy to be RIGHT while others are absolutely wrong.

(HANS) just reported 53 cents....  That's uhm... 14 cents less than what (DPS) produced. investors like (HANS)'s GLOBAL!!

Hans has access to emerging markets and therefore it has access to better growth or something...

There isn't strong enough growth in Mature Markets..... yadda yadda boo boo poo poo on you you

Seriously.....  (DPS)  has better growth because they have better variety of top selling flavors and they have a smaller play ground to work with, thus much better control over expenses, profit margins, and distribution routes..  

There are countless advantages in having the Smaller a Mature Market...

Versus relying on Un-proven markets... with a limited portfolio of beverages.......

DO THE RE-SEARCH!!!!!!!!!!!!!!!!!!!!!!!  [more]




February 23, 2011 – Comments (3)

The only (DRILLING) going on is occuring in people's portfolios.....
Whether it is Hewlett Packard losing 12% of its Share price value during the day....

Or its the oil sensitive stocks taking a plunge as oil prices skyrocket to no end in site.
Analysts are playing games where one guy says.... $5.00 a gallon gas is coming!!!!

Then the next Analyst comes and says....  $140 a Barrel is coming!!!!
Then yet another Analyst trumps that and says....  $150 a Barrel is coming!!!!

This is supposed to be a *stock market* not (EBAY) or an "Auction House."

SCOTTRADE does not allow me to post up my shares of (F) Ford Motor Company with a Silent Auction and a Gift Basket to whomever offers me the highest bid.

This is the reality we are living in folks... Starvation by Constapation....

It's like Cartoon Old People sitting in Rocking Chairs on the Porch:

Old Man:   "ehhh....Did ya check the Mail Box Martha?"

Old Woman:  "Now Now Dear....I checked it twice this morning and four times this afternoon.... There is no Social Security Check.... But the Government Promises they will send one once the Union Negotiations are finished...So we just have to be patient dear..."

Old Man:  "ehhhh,...... But I'm Starving...."  [more]



Ready for a Stock Market Crash?

February 21, 2011 – Comments (6)

Mideast Unrest has just shot Oil Prices up nearly $7.30.   About $7.23 at last check that I did on Yahoo Finance. 

That places oil above $92.00 a barrel when it was around $86...all in 1 day.

When You Have:

A)  President Obama's refusal by Permitorium to allow Offshore Drilling....

B)  Liberal Enviro-nuts refusing to allow us to drill ON SHORE in places like Anwaar Alaska...

C)  Enviro-Nuts screaming in rage right now over Oil drilling on the Marcellus....

Then you have a formula for absolute disaster.

We depend on mid-east oil and now the entire oil spigot is shut down due to unrest in LIBYA and other OPEC countries.

Face it folks.....The Rally to over 12,000 was nice while it lasted but it appears BEN BERNANKE will have to ask TIMOTHY the T to buy more Printing Presses to keep any stock prices a-float right now.

Everything that is produced in our nation is dependent on Natural Gas and therefore everything in the stock market, pretty much regardless....actually not pretty is regardless....

It is all subject for mass SELL orders and PANIC driven selling and of course the "SHORTS" like George Soros will ride the panic all the way to the bank cause those people bet on America's downfall.  [more]



C.E.O. Larry Young deserves 2 Thumbs Down

February 10, 2011 – Comments (0) | RELATED TICKERS: KDP

Yes folks.... I am here by giving my *RETIREMENT STOCK's* C.E.O.  2 Thumbs Down....

What has been on my mind especially now that the Share Price is reflecting it is that Dr. Pepper Snapple Group went hog wild last year spending a ridiculous amount of money on ABSOLUTELY NOTHING!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

For example:

If  A)  Spending Money to do a Super Bowl Commercial was a brilliant move on DPS's part then why did they decide not to do one in this year's Super Bowl?   They did one last year hoping for the money spent to result in pushing more Volume...  It barely budged Dr. Pepper in the scheme of things last year.

If  B)  If 25 cents a share is awesome for the investors then it should be awesome stuff for the Company right?    right ????   right ???

Do I even have to explain this?    Giving money back to shareholders is all fine and dandy, but (DPS) still has a hefty debt load burden to pay off....

So, let me get this straight...  In order to pay off one's debt.... One must put oneself in further debt by increasing your expenditures through the *&^% roof so you can make shareholders happy?


Ok... I'm Happy!!!!!    Can we move on now???  Can we cancel the stupid Shareholder Dividend or at least reduce it???? can we PAY OFF SOME DEBT without USING FURTHER DEBT TO PAY IT OFF>>>????????

If C)  Paying off debt by producing even further debt is a brilliant move then why won't FORD MOTOR COMPANY DO THE SAME??????????????????????????????????????????????????????????????????????????????????????????????

Explain this to me.....

Dr. Pepper buys     X  dollars worth of Debt.....  This reducing their debt burden...

Then.... Dr. Pepper turns around and issues.....yup..... DEBT BONDS which have INTEREST RATES which result...yup..... in more debt.....  Both X Dollar Figures..... are just about equal in size.

Shame on your LARRY YOUNG.....  Who did you hire for a Financial Expert?  Elmer Fudd?

Don't even get me started on the $2 Billion dollar  Share Buyback spree while the Company suffers under a 2.55 times EBITDA  Debt Load.  [more]



Fake: President Obama Televises Egypt Response

February 10, 2011 – Comments (1) | RELATED TICKERS: CSCO

Fake News:

President Obama Televises Egypt Response

See..uh....I told MUbarak that he should stay before I said he should go! or was Wisner the one??? uh....Wisner is to blame for....uh....orderly transistion getting all mucked up a bit before it got better?  It's better that Mubarak decided to leave and stay until September where.....uh....Orderly Transitionary progress will somehow surface with....uh....Mubarak sorta.....doing what I told him to not no not no no do....  Anyhow...I can't be any more clear folks!

So, I think..uh....This calls for a celebration....Afterall, Obamacare...uh....according to the CBO's best estimates....uhm....uh.....Will create 800,000 destroys 800,000 jobs...or uh....uhm....that may be what Nancy Pelosi said through my ear piece...uh....uhm...uh....uhm.....uh.......uhm.....There it goes...Teleprompter fixed!  No need to get bent out of shape over my Cabinet members not know what the *&^% they are doing with the uh....EGYPT situation....

Maybe....uh....Obamacare needs to be adopted in EGYPT.....It....uhm....uh....Could pave the way for yet another orderly uh....uhm....Mubarak's popularity rating....

So...uh....We had to pass Obamacare so as to know what is in it....and we had to uh....Tell Mubarak to leave....before we can know what a Military Crackdown looks like..

So....Uh....In a absolute rarity folks... I will actually take a question from the Media....uh....uhm....but not today.



Varchild's Super Bowl Commercial: Sugar High

February 04, 2011 – Comments (2)

The Following would be a Super Bowl Commercial I would do if I had $3 million burning a hole in my pocket, called "Sugar High:"

(Old Guy that looks like the Monopoly Guy):    Why bother investing in STOCKS, which can drop to zero!?

Sugar doesn't drop to ZERO!     And with the "Sugar High Investment Plan" you can learn how to invest in something that goes UP, not DOWN!!!   That's right... It's SUGAR!

The world is in short supply and the demand for the Sugar High is ever rising....

At (CBOU), (SBUX), (GMCR), customers are increasing their supply of sugary coffee/tea intake by the day.

Cats and Dogs are licking Sugar Sticks and little Kids are chugging Pixie Sticks and all kinds of Sugar Candy is getting consumed.... With Obesity on the rise, why not invest in SUGAR?

Here's how to get your hands on tangible Sugar... The Kind of Sugar you can touch, feel, lick, dunk it into your Glass of Milk with.......Real 100% Pure Cane Sugar!

Step 1)  Go to (MCD) or (WEN) or Taco Bell (YUM) and swipe some packs of Sugar!

Step 2)  Go to (SBUX) and (CBOU) and always ask for Sugar but stick it in your pocket, not in your Coffee.!

Caution!!!  Make sure to avoid "STEVIA" at all costs!

Now... As Sugar Rises in Price you'll be glad you took those Sugar Packets and Stuffed em in your Pillow Cases at home.....   10, 20 years from now when you Retire, you can sell your SUGAR for 3....4......5...maybe even 6 times the price you paid for them!



Should You QUIT Your Retirement Account?

February 03, 2011 – Comments (6)

Here's my situation...   I developed a fairly safe way to analyze stocks based on a set number of factors through Motley Fool (CAPS) Screening Program.

Based on that I spotted (MKSI) back when it was $20.80 and today it is $29.79, a better than 43% jump.

Should I just...uhm....get insanely aggressive here?  Am I on to something?

Can I spot some more big moves with this strategy or would I be playing with fire?

Here's my situation:

(F)  Ford is a Double+ Bagger for me, yes, even after the price fell below $16.00.  $18.00 even marks it as a Triple Bagger.

(DPS)  Is better a Double Bagger for me at $40.00.

(GAME)  Is priced with a solid profit for me right now if I sold it tomorrow.

So... Let's say I just QUIT my entire retirement strategy and went for it all...double or nothing...straight into whatever STOCK I believe is the next one to jump sky high.

I know what you are thinking... Varchild, you'll get burned because you are not Nostrodamus.

But....I can't help but think that I am at a level having been in the market since March 2008 where I can spot these things....With this simple way to stock pick:

A)  Look for stocks trading with really low volume

B)  Of those stocks, search for ones in a economic field that I am most knowledgeable with.

C)  Identify any obvious Sales Discounts and Potential at Retail Outlets for the company's products to start selling like hot cakes.   Like when Paul's T.V. was giving away Video Game Systems with the purchase of an LCD T.V.  That motivated me to like MKSI.

D)  P/E  Should be single digit or significantly below the average P/E in its industry.

E)  Debt Free Stock with an Insane amount of Cash on balance sheet... At least $1.00.

F)  Must be a Mid-Cap or Small-Cap stock.

So.....Yea...Kicking myself here for not jumping on board MKSI, abandoning my Stock Portfolio for this approach.

Course... if I can somehow find more than 1 stock that fits this modus opperendi then why not diversify among those 2 or 3 stocks that are sitting, waiting, for people to notice them?

Just getting sick and tired of identifying smash hit stocks, months later they soar sky high, and I am sitting with the same stocks that I've bought and held for years....

Of course, I won't make a move until Earnings Season is over.  [more]



Market Signalling Epic Crisis Ahead

February 02, 2011 – Comments (2)

(GME)  Down 3.65%          -   Consumer Cyclical  / Retail

(JCP)   Down 2.65%          -   Consumer Cyclical / Retail / Home Furnishings Play

(SPF)  Down 1.12%          -   Housing Play

(PHM) Down  3.21%         -    ""

(PEP)  Down 1.17%          -  Consumer Staples  / Beverage Play

(GM)   Down  1.29%         -   Automotive Play

(F)      Down  2.29%         -   ""

(MCD)  Down .22%          -   Fast Food Play

(SID)    Down  1.33%       -  Brazillian Mining Steel play

(C)       Down  .22%         -  Banking Play

(BAC)  Down  .66%         -  ""

(A)       Down 2%           -    Life Sciences / Chemical Analysis Play

(CBOU) Down 1.37%       -  Coffee Play

(SBUX)  Down .65%         - ""

(XOM)    Down .27%        -  Oil & Gas Play

(BP)       Down 1.42%     -  ""

(D)         Down .75%       -   Energy Play

And yet the overall market DOW is only down 7 points, S&P down about 3 pts and Nasdaq up about a half point.

The Breath of the market is pointing towards disaster ahead of us 6 months from now.
If you have little to no cash outside of your investments in your investment account....

R * A* * I * S * E                                SOME                 C * A * S * H

Hint Hint Hint.....

P.S.  Or you can buy AGRICULTURAL related stocks as the FOOD CRISIS is why they are doing so well and probably will dominate at least the 1st half of this year....  What we have on our hands is going to be a MASSIVE Recessionary Environment triggered by rising costs of FOOD and short supply of FOOD....  FOOD CRISIS  begins....

Grain Prices sky high like a rocket ship due to EGYPT unrest.... read all a-bout it.....!!!!   World Wide FOOD Crisis!!!!   Read all a-about it!!!!

or.... Just watch the ticker tape  [more]



Red Thumb This Stock (GAME)

February 01, 2011 – Comments (2) | RELATED TICKERS: GAME.DL , CYOU , SOHU

DISCLOSURE:  I own 1704 shares of GAME and will not sell GAME this month.

SO?  Why after disappointing earnings reports since the stock debuted post Spin-off from (SNDA) is it that All Star Motley Fool Caps players refuse to Red Thumb (GAME)?

Sure... SBEREN red thumbed it and I *think* at one point he was an all star.....But his pick hath expired into irrelevancy.

What is interesting to note, and I've noted it in the Yahoo Finance Forums, is that there is optimistic momentum heading into the Feb. 28th earnings report for Shanda Games.... A slight EPS average analyst rating up tick for the 4th Quarter could be right...and if earnings show that the optimism was definitely warranted then the stock price could take off....

(CYOU) and (SOHU) reported tremendous earnings... Enough to result in an article saying that SOHU and CYOU are dubbed the Chinese GOD STOCKs that must be worshipped or something....

And I suppose that attitude will persist as long as CYOU produces earnings beats....

Of course like Ford Motor Company the attitude of ever present, ever ridiculous optimism immediately reverses should any quarter become an earnings miss this year for SOHU or CYOU.

So.......There's plenty to consider here..... Do we say (GAME)'s earnings will continue to disappoint as SOHU and TENCENT clean house on the Video Gaming, Internet, etc. story in China?

Or can we say that (CYOU) essentially scored big numbers because it had a tremendous video game product producing those great numbers....and thus...we have DRAGON NEST and HADES REALM II and Legend of Immortal for Shanda Games for Q4 2010 and 2011...

DRAGON NEST has huge support as it gets introduced worldwide... Europe, North America, and South east Asia versions will be introduced before 2011 is out.

So....  If it just takes 1 Smash Hit Video Game Stock to send a Share Price up 15.52% in a single day.... What will happen to (GAME) if Dragon Nest does the same?

P.S.  This is NOT a recommendation to RED THUMB (GAME) but a simple synoposis update for investors to consider if they think they want to Green or Red Thumb (GAME) at the share price it sits right now..... The Stock Price pulled back quite a bit but has since had 3 consec. GREEN up trending stock price days.... Is this a sign of upward momentum into the earnings release at the end of this month?  Or is this trading in a range between $5.80 - $6.50 mindlessly?

All things to consider when deciding to RED THUMB a stock in Motley Fool Caps.... But know this.... ALL STAR RED THUMBS =  ZERO for Shanda Games.   An Unprecendented 5 Star Stock in that regard meaning not many can lay claim to ZERO red thumbs out of nearly 500 total picks.  [more]

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