NTRI - What happened
I am sorry if anyone bought and watched the price plummet. As I will explain in a moment, please keep the faith.
First, let me also be clear. I own the stocks that I present in LIVEROCKET's portfolio. I put my own money where my mouth is. I know the pain all to owell when one of my choices goes down. And for anyone following my advice, I feel a heavy burden when my suggestons don't immediately pan out.
On the one hand, this is a good time to remind everyone about the hazards of picking one stock out of the LIVEROCKET portfolio and going with it. This is a portfolio which is hedging growth in several markets. As soon as you go with just one stock out of this portfolio, you open yourself up to a lot of risk.
That still doesn't make up for buying a stinker. Or is this a stinker? I don't think so - NTRI released some very good news, only to plummet from the $48 buy price to $41.xx.
NTRI pre-announced as follows.
Sales: $70M or 12% higher than expected
Earnings: $0.16 estimated and that's $0.01 below consensus expectations
Then they provided guidance for 2006 and for this quarter
Q1 revenues: ~$115M (versus $37M last year Q1) or up 200%
Customer base growing 170%
Q1 earnings: estimated at $0.35~$0.38 (versus $0.33 consensus)
Why would the market care about one penny this quarter when NTRI went on record that it expects to exceed by up to 5 pennies next quarter? I believe that it is partly the pre-earnings run up and partly because the market was shocked that sales growth was 'falling' from 600% to 200%. As an investor, I never expected that 600% number to remain: Q4 '04 was the last quarter before NTRI began selling on QVC or when their sales jumped from $8M to $37M.
Track the sales
Q4 '04 $8M
Q1 '05 $37M
Q2 '05 $41M
Q3 '05 $67M
Q4 '05 $70M
Q1 '06 est $115M
Analysts will also have to revise 2006 earnings expectations, currently at $1.22. If NTRI hits $0.35 this quarter and holds at that level, that's a 20% upside surprise for analysts. And that assumes flat sales. If they even grow beyond today, that's more upside surprise.
Forward P/E today ($1.22) 34
Forward P/E revised ($1.40) 30
Forward P/E with 10% upside ($1.54) 27
(Can they hit their target numbers? As we roll out of holiday season and Spring comes forward, expect lots of advertising around getting in shape for bikini season.)
This is a company with sales more than tripling, earnings doubling, but they are getting a P/E of ~30???? THIS IS A SCREAMING BUY OPPORTUNITY.
Keep the faith. As we get closer to next quarter, people will start to wake up to the doubling of earnings and get excited again.
First, let me also be clear. I own the stocks that I present in LIVEROCKET's portfolio. I put my own money where my mouth is. I know the pain all to owell when one of my choices goes down. And for anyone following my advice, I feel a heavy burden when my suggestons don't immediately pan out.
On the one hand, this is a good time to remind everyone about the hazards of picking one stock out of the LIVEROCKET portfolio and going with it. This is a portfolio which is hedging growth in several markets. As soon as you go with just one stock out of this portfolio, you open yourself up to a lot of risk.
That still doesn't make up for buying a stinker. Or is this a stinker? I don't think so - NTRI released some very good news, only to plummet from the $48 buy price to $41.xx.
NTRI pre-announced as follows.
Sales: $70M or 12% higher than expected
Earnings: $0.16 estimated and that's $0.01 below consensus expectations
Then they provided guidance for 2006 and for this quarter
Q1 revenues: ~$115M (versus $37M last year Q1) or up 200%
Customer base growing 170%
Q1 earnings: estimated at $0.35~$0.38 (versus $0.33 consensus)
Why would the market care about one penny this quarter when NTRI went on record that it expects to exceed by up to 5 pennies next quarter? I believe that it is partly the pre-earnings run up and partly because the market was shocked that sales growth was 'falling' from 600% to 200%. As an investor, I never expected that 600% number to remain: Q4 '04 was the last quarter before NTRI began selling on QVC or when their sales jumped from $8M to $37M.
Track the sales
Q4 '04 $8M
Q1 '05 $37M
Q2 '05 $41M
Q3 '05 $67M
Q4 '05 $70M
Q1 '06 est $115M
Analysts will also have to revise 2006 earnings expectations, currently at $1.22. If NTRI hits $0.35 this quarter and holds at that level, that's a 20% upside surprise for analysts. And that assumes flat sales. If they even grow beyond today, that's more upside surprise.
Forward P/E today ($1.22) 34
Forward P/E revised ($1.40) 30
Forward P/E with 10% upside ($1.54) 27
(Can they hit their target numbers? As we roll out of holiday season and Spring comes forward, expect lots of advertising around getting in shape for bikini season.)
This is a company with sales more than tripling, earnings doubling, but they are getting a P/E of ~30???? THIS IS A SCREAMING BUY OPPORTUNITY.
Keep the faith. As we get closer to next quarter, people will start to wake up to the doubling of earnings and get excited again.
posted by Andrew at
10:59 AM
4 Comments:
Looking at this as a buy opportunity. Just thought it interesting that investors didn't like the news. I guess the old saying buy on speculation, sell on news hit the mark this time with some investors..
Couldnt agree more! Its a screaming buy opportunity. Feel bad though that we jumped in just before this news.
Yet another buying opportunity today. Wonder why they are so weak right now? Didn't see any news, but they are down 8% right now...
I am looking at them and wondering as well. Volume is high, so I suspect institutional dumping ahead of earnings release. Profit taking most likely. Classic small cap company behavior.
I continue to believe in this company and am really unhappy with this sentiment. I do not like fighting market sentiment and clearly it is punishing NTRI. They are well below the 50 day and now closing in on the 100 day moving average.
This is a sign of wholesale dumping.
I like the fundamentals and continue to believe in this company. It is now trading at a forward P/E of 30 which will be likely revised next quarter to 25. And the company expects to triple their business this year.
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