| To: hoyasaxa who wrote (21043) | 4/7/2005 7:08:47 PM | | From: Brinks | | | | $ 100 potential for every $ 1 invested says newsletter writer Ron Struthers on my recent Scientigo or Market Central pick last week. Ron saw my summary I posted here and liked it so much he picked up the stock after talking with CEO. I did not talk with CEO.
I had no input in Struthers report on MKTE below. I call this my value play--$ 100 to $ 1 per Struthers. I purchased shares today, yesterday, last week and probably tomorrow.
My research summarized here became the basis for the newsletter coverage below:
Message 21114117
The stock has not moved at all since the newsletter came out last week.
Newsletter promo:
Imagine Buying Google at $ 2.00 !
How about a stock that a Newsletter writer feels has a potential of $ 100 for every $ 1 invested.
Read the following:
Newsletter writer Ron Struthers just came out with the report that says: "The Next Big Thing In Search Technology." And the outside counsel of GOOGLE is part of the intellectual property team at Market Central or Scientigo (MKTE). Ultimate Disruptive Search Technology…...
Struthers Newsletter REPORT March 29, 2005:
"The potential here is enormous because this company has a tiny market cap of just US$14.0 million and the market could put a value on this of $1 or $2 billion when it finds out about them. This means we have a chance to make $100 for every $1 invested, it is like being a seed investor in Google."
See Ron Struthers complete Newsletter REPORT here on Market Central:
playstocks.net |
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| To: Spekulatius who wrote (21059) | 4/7/2005 10:27:18 PM | | From: Mark Marcellus | | | | I'm starting to look at WMT and one thing that really leaps out from their balance sheet is the negative working capital, which was negative $3 Billion as of January 31, 2004. Part of this can be attributed to their aggressive management of AP, and I'm sort of okay with that. However, Accrued Liabilities at $10 Billion and counting is also a huge piece of it, and I'm having trouble understanding the accounting. A small part of it is accrued membership fees, which is fine, but the bulk of it seems to be hedges. Here's how they describe it in the 2004 AR:
The Company entered into cross-currency interest rate swaps to hedge the foreign currency risk of certain foreign-denominated debt. These swaps are designated as cash flow hedges of foreign currency exchange risk. The agreements are contracts to exchange fixed-rate payments in one currency for fixed-rate payments in another currency. Changes in the foreign currency spot exchange rate result in reclassification of amounts from other accumulated comprehensive income to earnings to offset transaction gains or losses on foreigndenominated debt. These instruments mature in fiscal 2007 and 2009.
The Company entered into an interest rate swap to lock in the interest rate on floating debt. Under the swap agreement, the Company pays a fixed interest rate and receives variable interest payments periodically over the life of the instrument. The notional, or contractual amount is used to measure interest to be paid or received and does not represent the exposure due to credit loss. As the specific terms and notional amounts of the derivative instruments exactly match those of the instruments being hedged, we have applied the “short-cut” method of accounting provided under FAS 133 and FAS 138. As such, the derivative instrument as assumed to be a perfect hedge and all changes in fair value of the hedges were recorded on the balance sheet in other comprehensive income
The Company expects that the amount of gain or loss existing in other accumulated comprehensive income to be reclassified into earnings within the next 12 months will not be significant.
Hedging instruments with a favorable fair value are classified as other assets and deferred charges in the Consolidated Balance Sheets Those instruments with an unfavorable fair value are classified as accrued liabilities.
I'm confused. If this is treated as a "perfect hedge" and any gains and losses are handled in comprehensive income, shouldn't this be B/S neutral? Does the last paragraph mean that if a $1 Billion hedge has a fair value of one dollar it's a $1 Billion asset, but if it has a fair value of minus one dollar it's a $1 Billion liability? If that's true, it's insane.
I've looked around and I can't find any source that even mentions the negative working capital issue. Maybe it's just me, but I'm having trouble understanding why this isn't at least worth an explanation, especially for a company whose net profit margins run around 3%.
Any thoughts on this would be greatly appreciated. |
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| To: Mark Marcellus who wrote (21079) | 4/7/2005 11:56:55 PM | | From: Spekulatius | | | | | re WMT - the negative working capital is really a good thing since it means that WMT collects it's money faster than it pays it's suppliers. Regarding the accrued liabilities, you are right that most of them are due to interest rate (around 8B$) and currency (2B$). Since WMT has about 20B$ in LT debt, it means that about 50% of that debt is hedged against currency and interest rates moves. Sounds OK to me. The 12B$ sounds like a huge number but WMT has about 50B$ in revenue abroad which puts that number in perspective. |
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| To: Paul Senior who wrote (21015) | 4/8/2005 12:03:58 AM | | From: Spekulatius | | | | | AIG , bought back into AIG ( at a higher price - sigh) after it appears unlikely that Spitzer will press criminal charges against AIG. That was the biggest concern regarding AIG since criminal charges are very damaging to any financial business. So i hope that Hank just massaged the numbers a little (2B$ is little for a giant like AIG) rather than cooked the books a la Worldcom. Going forward, this won't the the old AIG any more but still a very strong insurer, at least that's what I am betting on. |
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