Artikel vom 21.09.04
War am 22.09.04 auf der Internetseite von bloomberg nicht mehr zu finden, allerdings war die Überschrift noch im google-cache, also glaubhaft.
Bloomberg Columnists
John Dorfman , president of Dorfman Investments in Boston, is a
columnist for Bloomberg News. The opinions expressed are his own. His
firm or its clients may own or trade investments discussed in this
column.
J.P. Morgan Analyst Is Top Short Seller: John Dorfman (Correct)
J.P. Morgan Analyst Is Top Short Seller: John Dorfman (Correct)
(Corrects typographical error in penultimate subhead. Commentary.
John Dorfman, president of Dorfman Investments in Newton Centre,
Massachusetts, is a Bloomberg News columnist. The opinions expressed
are his own. His firm or its clients may own or trade investments
discussed in this column.)
By John Dorfman
Sept. 21 (Bloomberg) -- Lionel Archille, a retailing analyst for J.P.
Morgan Securities Inc. in New York, has won my sixth annual ``Short
Sellers Don`t Have Horns`` contest.
Short selling is the art of profiting on a decline in a stock.
Archille won by selecting Covad Communications Group Inc. (COVD), an
Internet service provider based in San Jose, California. Covad stock
sank 70 percent, the most of any stock picked in the contest.
For his acuity in short selling, Archille will receive a collection
of short stories. Previous winners have received a CD by pianist
Bobby Short and a biography of Napoleon Bonaparte, a famous short
person.
While Archille is a professional investor, some previous winners have
been gifted amateurs. If you would like to try your luck in the
contest, entry rules are at the end of this column.
Contestants did well in the latest contest, which ran from Sept. 30,
2003, through Sept. 15, 2004. Even though the Standard & Poor`s 500
Index rose 14 percent during that period, most contestants managed to
pick a stock that lost ground.
Not That Easy
By contrast, in several of my previous short-selling contests, people
have had great difficulty in picking losers. Last year, for example,
24 of the 28 contestants picked stocks that went up, and 20 of their
picks went up more than the Standard & Poor`s 500 Index.
Entrants aren`t required to put real money behind their contest
picks, though clearly some do.
When he entered the contest a year ago, Archille pointed out that
Covad Communications had no earnings and negative cash flow. Yet it
traded for four times revenue. ``Investors` expected growth (rate)
for the company is too high,`` he wrote.
That reasoning proved to be right on the mark. A year ago analysts
were expecting Covad to earn about 45 cents a share in 2004. Now they
expect that the company will show a loss of about 27 cents a share
this year.
Second Place
Covad first sold stock to the public in November 1999. Since then, it
has reported only one profitable quarter. In the past four quarters,
losses have been narrowing and revenue slowly increasing.
Covad has debt equivalent to 457 percent of stockholders` equity, a
very high ratio. The stock sells for 1.1 times revenue and 18 times
book value (assets minus liabilities per share). The former is cheap,
the latter quite expensive.
Second place in the contest goes to Sumit Sablok, an analyst with
Symphony Asset Management, a San Francisco hedge fund. He scored a 65
percent gain in Redback Networks Inc. (RBAKQ), which was acquired by
its creditors in January.
The company, based in San Jose, California, makes equipment used to
deliver high-speed Internet service. A year ago, Sablok correctly
predicted that the company could not ``survive without huge
restructuring and raising funds at hugely dilutive terms.``
Travelzoo Inc.
For the coming 12 months, Sablok says he will probably pick Travelzoo
Inc. (TZOO) as his favorite short candidate. The company, based in
New York City, runs Internet sites and a newsletter for the travel
industry.
Travelzoo stock has risen 606 percent in the past year, and now sells
for 401 times earnings, 150 times book value and 47 times revenue.
Sablok says he looks at the business and ``can`t see how it can ramp
up and justify these multiples.``
Michael Berlin, portfolio manager with MHB Equity Management LLC,
took third place as his pick, Dynacq International Inc. (DYII),
dropped 64 percent.
Dynacq, based in Houston, Texas, runs outpatient surgery centers. In
the past year it has been investigated by the Securities and Exchange
Commission for its accounting practices, and probed by the Texas
attorney general for the way it solicits patients.
Short Sellers Help
In its latest reported quarter (ended in May), Dynacq reported a
sharp drop in revenue, to $13 million from $25.6 million the year
before. It has also been delisted by the Nasdaq Stock Market for
failing to file financial reports on time.
Some people abhor short selling and short sellers. They say that
short selling raises no capital for U.S. enterprises, serves no
constructive purpose and encourages short sellers to spread negative
rumors about companies.
I disagree. Short sellers aid the flow of information in the
marketplace, combat hype and help keep na<ve investors from
overpaying for ``story stocks.``
I`m not 100 percent objective on this, since I do engage in short
selling for myself and some of my clients.
Enter Now
If you would like to try your luck in the contest, please provide the
following information: Your name, occupation, address, phone number
(office and home) and e-mail address. Name a stock that you expect to
show a large decline in the next 12 months and -- briefly -- why.
The stock can be based anywhere in the world, but must trade in the
U.S. It should have a market value of $100 million or more on the day
the contest begins, Sept. 30, 2004.
The contest runs through Sept. 15, 2005.
E-mail me at johndorfman@d.... Or, if you prefer,
write to John Dorfman, President, Dorfman Investments, Suite 500, 10
Langley Road, Newton Centre, MA 02459. Entries must be postmarked or
time-stamped by midnight, Sept. 30.
-----------------------------------
Herzlichen Glückwunsch an Lionel Archille für seine scharfsinnige Einschätzung letztes Jahr.
Fand den Artikel interessant.