Charles & Colvard Ltd (NASDAQ:CTHR)

Going lonl on this one will require the persistant dedicated invester. For the near term i will watch until the distribution isues are put to rest.

No Debt, FCF Positive, ~$1/share, trading at 2x book and no Real Competitors

marketing,marketing,

There are potential large fluctuations in revenue due to product rollouts and then periods where those rollouts need to be worked through; this was seen back in 2005. However, the long term revenue prospects are gradually rising while marketing expenses are staying within a reasonable range. The same can be said for the gross margins, which have fluctuated due to seasonal fluctuations in average selling price/carat (retailers order larger stones close to Christmas which have high selling price/carat) and also due to varying production costs and the company's use of FIFO. The main concern for this company is to increase awareness of moissanite jewels. Another note is that CTHR markets moissanite NOT as an alternative to diamonds but positions it as a unique gem. This was their response during a conference call regarding synthetic diamonds as a pontential competitor. However, from the comments I've read here I can see that consumers perceive moissanite as a substitute to diamond. Also note however that synthetic diamond is priced at 60-70% of mined diamonds price. Moissanite is about 10-30% of mined diamond's price.

Value is substantially underrated

This is an excellent stock if you look at the history of the company and what it's doing for the next year. It's going to take a couple months for it to rebound, but post valentine's day (1st quarter) things will look much better.

moissanite is now sold at big name stores such as zales, which makes the Q4 2006 a strong one. indication is that sales have been helped greatly by the season and i expect the revenue to top 14.5 M for the quarter, above the expected range. this will translate into higher earnings per share

Stock price recovers from getting way ahead of the fundamentals and subsequently crushed. Comapny is well run and will resume growth after consolidating key customer wins in '05.

CTHR holds the patents on moissanite being used in jewelry applications. Moissanite has more fire, brilliance and sparkle than any other jewel (even more than a diamond). Moissanite jewelry is less expensive than diamond jewelry, allowing the purchaser to afford a big, bold look that elicits more compliments. As awareness of moissanite grows, so should the sales and profits of the sole supplier of moissanite - Charles & Colvard.

Not quite the glitz of a diamond but a close knockoff for a great price.

Price is getting attractive.

Marketing sells anything. They tell me the greatly inflated price of diamonds is due to the monopoly/monopsony plus a 150 year old marketing campaign.

But last year when I got my mom to go out and look at moissanites with me, neither of us were impressed. They're yellowish-green and they don't sparkle like diamonds do. They're hard and they can be faceted like diamonds, but there the similarity ends.

I'm betting against this company not because I don't like moissanite - it is what it is - but because it's trying to go up against that famous 150 year old marketing campaign. I think this is their core issue and I think it's a fatal flaw, never mind their financials or their free cash flow or their corporate governance.

Your mileage may vary.

A great product. Also, the only competition they have, -- diamonds, getting a lot of bad rap, if they could ratchey up their PR and advertising, they will do great. As is, you cannot beat the price....a diamond for a third the cost?!!!

Have a monopoly on this product.

Excellent Product, Good Management Team, Monopoloy in moissanite market with its Patents, Building Good Distribution Channels, Excellent supply of raw materials from CREE INC, Decent Marketing Pitch.

Its taking one step at a time and building strong fundamentals from the ground up. They are making sure that this thing will not go away like a fad .So doing enough ground work to make it a separate jewel category. At $8.3 it cheap .

Our stock picker algorithm chose CHTR this past May. It was chugging ahead nicely, but just stumbled (Oct) because despite nicely rising revenues, increased marketing and manufacturing costs produced flat Q3 earnings. The company is marketing aggressively all around the world. Watch for a "pop" after the 2006 Christmas gift-buying season, with another up-tick after Valentines Day. Our target is $ 20+ over next 6 - 12 months.

Nearly a 20% haircut on flat earnings, with a product that has big potential I think this was oversold.