Chart watch - TZOO

Discussion in 'Stocks' started by Chagi, Mar 11, 2006.

  1. Chagi


    I've been watching TZOO for the past couple of months, it's been in a downwards channel since the beginning of December. Stock moved upwards Feb 14 on news of share buyback, and has since retraced a bit.

    Point is, I think that TZOO may be moving out of its downwards channel, going to be monitoring the stock closely next week for a long entry (I have my alert set for $19).
  2. Chagi


    Anyone else want to comment on this one? My strategy on this one could be considered to be "bottom picking", but I think that $17-$18 seems to be a fairly good level of support.

    TZOO used to have astronomical P/E ratios, P/E is still quite high (trailing is 41 or so), but the stock price is starting to become more in line with the fundamentals of the company. Revenue is growing, gross margins are high, company is profitable, net income is growing debt is minimal, company sitting on about $42.7 mill in cash & equiv., etc.
  3. rcj


    Chagi ...

    What caused the big drop from ~60 to ~18 ??

    Fri vol was only 1/3 of avg vol. Not a whole lot
    of interest right now- it seems.

    What if they use their cash for a buyback? Maybe, not good.

    .... rj
  4. Chagi


    Well, the big drop was basically due to this stock being overhyped, it hit some pretty stratospheric valuations over the past couple of years. Typical dot com boom and bust cycle, with the exception that this company actually makes money.

    With regards to using some of their cash (or equivalents) for the purpose of share buyback (and they have already explicitly announced the buyback), that is actually a good thing for shareholders. They have a pretty good chunk of cash sitting in the bank right now, and finance theory would argue that they should be acquiring other companies, developing new products, paying dividends, paying down debt, buying back shares, etc.
  5. Chagi


    Still monitoring TZOO, action today wasn't enough to make me want to buy.
  6. The only reason why anyone would buy TZOO is if they believed it was gonna be manipulated again. I'll keep an eye out, but I doubt we'll be seeing $120 again.

    Plus short positions have been decreasing. No chance of another short squeeze like last time. It was TZOO which originally led me to this forum many years ago :D
  7. rcj


    they may be setting up to be bought What do you
    think of that idea??

    .... rj
  8. Chagi


    That's an interesting point, though I wasn't thinking about manipulation per say. Basically it is the chart that is attracting me, as well as their improving fundamentals. That said, the stock is still very expensive by traditional valuations.
  9. I dunno: The stock went from $4 a share to $120 a share over nothing. Hedgies started shorting it like there was no tomorrow at around $30 but the stock kept rising.
  10. rcj


    There could be problems with insider stock manipulation??

    ..... rj

    edit .... did that ever get resolved??
    #10     Mar 14, 2006