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I haven't seen a post on this yet. If you haven't looked today, the price for CNXS has dropped 9.5% as of 1pm. I only had time to glance over the earnings info while at work. The only really bad thing I found was that international sales dropped 33% due to poor timing of shipments to Japan.

Has anyone else found a different logical reason for the drop?

Flynn
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Nope. I'm adding to my position that I've been sitting on for several months. So far, I like evrything I have seen. The stock/company is not very sexy, but I think we can all use that to our advantage at this time when there is so much speculation buying.

585
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I see no reason for decline and doubled up on my position today at a nice price. Hopefully, there will be a nice bounce back tomorrow when everyone realizes that the earnings were pretty good.

Macklad
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No. of Recommendations: 5
Has anyone else found a different logical reason for the drop?

It's just Mr. Market being his usual mannic/depressive self.

Everyone knew in advance that international sales would drop by a bunch, and also knew why. The company was very good when it came to disclosing this, and did so a while ago. So the drop you are talking about shouldn't have come as much of a surprise to anyone.

Frankly, I didn't see anything in the release I didn't expect or that management hadn't told us was coming a while ago - so the only explanation I can come up with is simply Mr. Market doing his usual antics, and presenting those who might be interested with what could be a good buying opportunity. I saw no fundamental weakness that would explain that kind of a drop (at least in my view).

Remember, the same thing happened with HOFT's last release. They missed some of the analyst expectations by a hair, and I mean really just a hair - and got clobbered for it. What I think is going on is a lot of 'buzz' because these are HGs, and people are expecting spectacular releases. Instead, when they get 'everything is pretty much going according to plan, no surprises one way or the other', they get disappointed and bail out. Judging the sentiment of the market is way beyond my field of expertise so I could certainly be way off base, but if I had to make a guess, this is what I would think is most likely happening.

HOFT's shares have already recovered to their pre-announcement levels, and if I were a betting man I'd bet that this 9% drop will wholly or substantially reversed in relatively short order.

Regards,

Eldrehad

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Totally agree Eldrehad. This was your one day sale on CNXS. Once the average person realizes this, then the numbers will jump again.

My question about the Japanese shipments is: Will this make next quarter look better than it actually is? If so, might we set a sell limit order to cash in on overexuberance after the numbers come out?

Macklad
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I also added to day thanks to a limit order set some time back...Phil
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My question about the Japanese shipments is: Will this make next quarter look better than it actually is? If so, might we set a sell limit order to cash in on overexuberance after the numbers come out?

I'm not sure what you mean by 'making next quarter look better than it actually is'.

Do you mean making next quarter the same year-ago quarter? If so, I think the answer is 'yes'. Here's what the company had to say in the release:

...shipments will be concentrated in the March quarter this fiscal year, versus the December quarter last fiscal year. This change in timing better aligns product shipments with the peak seasonality of consumer purchases in Japan. Consumer purchases overall remained strong in CNS' international markets, including Japan.

http://biz.yahoo.com/prnews/040122/cgth063_1.html

You can use a sell limit to try to capture exhuberance if you want to, but I won't personally be doing so. First, this impact will be fully anticipated - so the market should price it in ahead of time. Now, the market can be irrational at times, so I can't say for sure, but I would think that it shouldn't contribute to any kind of big jump in share price when the numbers are released next quarter.

A lot of people use sell stops and sell limits, and there are a lot of good reasons to do so. That said, I personally do not. When a release comes out, I want to have the time to at least read it, sort out what it means, see if there are any surprises (good or bad) and make an informed decision whether or not selling at a particular price is a good or bad idea. With a sell limit, I am making the decision as to what price I'll accept in advance of reading the release. In my view, this isn't the most well-informed decision I could make, so I don't make it. Again, there are a lot of good reasons to use such orders so I am not being at all critical of anyone who does. This is simply how I approach that question, and what works for me personally.

Regards,

Eldrehad



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Hi Eldrehad,

Good to hear that others feel the same. I took advantage and bought some more at 12.52. It was a GTC limit I set a long time back. One that I didn't necessarily think would be filled. A true example of setting a price and sticking to it, and being successful. Now my avg cost is just below $12. I think I will do just fine from there.

"This marks our 10th consecutive profitable quarter," said Marti Morfitt, president and chief executive officer, CNS, Inc. "Domestic Breathe Right sales drove our improved results, as we experienced particularly high demand for nasal strips during an unusually severe and early cold and flu season.

And their 3rd consecutive dividends announcement. This is only a sample of other good news. Here is a link from Yahoo if you haven't seen it

http://biz.yahoo.com/prnews/040122/cgth063_1.html

--Flynn
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Hello all!

Also in with you lot, used today's drop to add slightly to my position, just wanted to join in :). I don't see any reason for the long term story changing...

beaker922
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One more in the " add to " club!

Love it when good things go on sale!

Murph
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No. of Recommendations: 9
hi all.

here are my reasons why the stocks declined.

1) it had run up qute a bit in the last 3 weeks, probably on expectations of a super quarter. well, the quarter was great, but some traders tot it was not super. note that their revenue increased while marketing cost decreased. this bodes well.

2) CNS will earn 0 to 3c per share in the 4th quarter. this is compared to 4c in the year ago period. this lowered figure is enough to give people the jitters. but the reason for that is increased marketing. this makes sense to me as there are only 2 quarters in a year when their pdts are truly in demand, and the 4th quarter is the peak. so spending to gain awareness is a good move.

3) the revenue from international shipments will be 'moved' to the 4th quarter to coincide with the japanese peak season. this shows that they have inventory under control. remember that they ship to retailers who sell to consumers, so again, it make sense to ship only when their pdts are in high demand. not having proper inventory control and overshipping , resulting in a backlog, was a main reason for their losses a few years back.

people who only look at the result without understanding the reasons are missing a buying opportunity here. all in all, the company is laser focused. they are executing well, margins are up and sustainable, and they are not breaking the bank for growth and profits. how i wish i could find 5 more companies like CNS!

there is absolutely no reason at all to doubt they are losing traction. the cashflow statements are not out yet though.

alex.
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Flynn,
I've noticed the whole market seems to be down today. Someone posted on a different board that interest rates had gone up a little for the first time in a long time....I don't know if it's true...I'll watch the news tonight and see...I'm in cns for awhile..


sincerely,
MrsDigger
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I agree 585, I like down days so we can buy...

Mrs
digger
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the feds MAY raise interest rates by 0.25% in the future. but really, is that news?

CNS has no debt so it won't weigh on their interest expenses. in fact, higher interest means that CNS will make more in interest income!

i listened to the conference call and it was one of the shortest i have ever heard.

alex
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btw, i wish to mention that CNS has outstanding float of 13.6m shares. the prices may be falling, but it's on volume of about 100k or less.

this does not look like many people think the company is faring badly.
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