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No. of Recommendations: 3
David,

Your thesis in early January, 2008, posted on Seeking-Alaph was this:

"The current EPS is $1.29. Let's start these numbers by assuming Hansen grows earnings 50% this year and finishes the year with a P/E of 40. The market expanded the P/E a little bit but didn't get any more excited than that.

1.29 * 1.5 * 40 = $77.40

With these pretty conservative estimates, the share price would expand 75% this year. That's with very little P/E expansion and a drop-off in earnings growth despite the two distribution deals becoming beneficial to the company.

Let's take it a step down and assume earnings grow only 45% this year and the P/E stays at 35.

1.29 * 1.45 * 35 = $65.47

That's a 50% increase from today's levels. And I'm not kidding when I say it wouldn't be that good of a year if this is what Hansen accomplishes. Seriously, the company is overflowing with cash and there is only more coming, and now they don't have to put nearly as much effort into distribution; instead it's in the hands of one of the beverage powerhouses of the world.

Let's now take it a step up and expect 55% earnings growth with a P/E of 45 slapped on.

1.29 * 1.55 * 45 = $89.98

More than a double from where we are today. And I really don't believe it's that far out to expect this. The bottom line is Hansen is in a great position and so far I'm convinced management is taking full advantage of it."

Today HANS released earnings which say net profit drop to 49.6% and revenue missed analyst expectations by .06c per share.

One of two possibilities exist: 1) The analysts covering HANS are entirely off their mad-hatter rockers, have no idea how to accurately judge this company, and were expecting nothing short of miraculous results, which I'm afraid not even the baby Jesus could have delivered. The lemmings of the market saw a huge miss and the selling that started this afternoon will continue, creating a buying opportunity the like of which we pray for nightly. HANS is now trading below $30, which according to your theses above indicates if we buy now in 7 months we'll have, at worse case scenario a double, at best case scenario a triple, the funds of which could pay for many barrels of whiskey for Slothrop and his Monkey. Therefore, patience, Fools, this is a jewel heist delivered to your door, buy shares now and retire early.

Or possibility 2): There were inaccurate assumptions made in your estimates above or the business has changed fundamentally. The distribution deal isn't working out as spectacularly as planned, increasing costs weren't appropriately accounted for, tightening of wallets has slowed down the market for energy drinks and so forth. HANS is not the company you thought it was due to a mix of internal and external factors and the $30 price tag is not a bargain but at best a fair value, and more likely still a bit overpriced given the change in business fundamentals.

Slothrop's Monkey acknowledges that the truth might lie somewhere between these two scenarios, but thought he would paint the two pole's as a starting point for discussion. Either way, HANS has cost Slothrop much bourbon and he would like some kind of explanation for he takes his bourbon drinking seriously, and feels that drinking Monster Java is not quite the same experience.

Humbly and thirstily yours,

Slothrop and Monkey
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No. of Recommendations: 3
There is no room for hope, faith and trust in investing. All it does is lock you into ever expanding losses. The HANS chart is clearly down - the smart money knows. Blood simple. HANS down another $5 after hours.

How many here rode CROX down from 80 to 10? Or JSDA, you guys like soda, from 32 to 3.

Here's a sobering thought for you - losses count a great deal more than wins. And lose enought you're essentially done for years if not forever. Learn the game - please - your young - be smart - time is on your side, but only if you are smart.

______________________________________________________________

TO BE SUCCESSFUL YOU MUST CONTROL RISK!!!

Most of you are probably all excited about making money, and also are probably not thinking about losing money. However, the key to success is building your trading model around your risk tolerance as its first principal. Let me hammer home to you one VERY IMPORTANT fact. Each time you lose money, it is harder to make it up. And the more you lose, the more uphill the road becomes. Here’s why.

Start with $10,000

Lose 10% to $9000 You need to make $1000 on $9000 or 11% to get back to even

Lose 15% to $8500 You need to make $1500 on $8500 or 17% to get back to even

Lose 20% to $8000 You need to make $2000 on $8000 or 25% to get back to even

Lose 25% to $7500 You need to make $2500 on $7500 or 33% to get back to even

Lose 33% to $6700 You need to make $3300 on $6700 or 50% to get back to even

Lose 50% to $5000 You need to make $5000 on $5000 or 100% to get back to even
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No. of Recommendations: 4
RTTrader,

Please don't think me immodest or rude, but I did not find your post useful in the least. Your main argument--losing money is bad, HANS has lost money, therefore HANS is bad-- is not terribly enlightening. All stocks lose money. Likewise, "Learn the game" is an adage that is all rhetoric and little substance.

My predicament remains, and I'd like to hear what David has to say:

is HANS, now at an 18.86 P/E (.39+.46+.45+.29 / 30) a screaming bargain (ideally one which David would back up by adding to more HANS to his portfolio) or has the company fundamentally changed, thereby making this price point a fair one at which to exit stage left.

"Losing money is bad." Yes, yes it is.

S + M
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No. of Recommendations: 5
I have to admit that I bought HANS partly on David's enthusiasm, but not on his numerical analysis. Looking at the analysis, I think it deserves some comments. It is waaaaay too optimistic. No product or company can grow earnings by 50% for very long unless it is starting from a minuscule base. There are short periods of time during which a company can achieve these glorious spurts but they don't last long. In Gorilla Gaming it was called "The Tornado." The flip side is that if a company does achieve these levels of growth, investors, actually speculators, will bid up the stock price to astronomic levels from where they will sooner or later crash. Momentum stocks are famous for losing 30 and 50% of their value almost overnight. The leveraging works both ways. And smart money has nothing to do with HANS's current predicament. If smart money were smart Bear Stearns would not have gone broke. Smart money can be incredibly stupid.

HANS has to be analyzed based on current numbers and current conservative estimates. While it is not growing at 50%, 43% is nothing to sneer at. But even if we project Hansen revenues to grow at only 20% which could translate into net profits growing at 25%, the stock at a P/E of 20 is incredibly cheap.

In the appendix of Intelligent Investor Ben Graham makes a very interesting observation which is very much to the point with HANS. Graham says that speculation is buying second rate companies, companies that we cannot be sure will survive and prosper. I don't think Hansen fits that description, the product has been well received by the market and Hansen has good distribution deals. Graham then goes on to say that overpaying for a good company is also speculation. If you overpay for HANS you will simply not be able to make any money on it. David's analysis of HANS tends to make people overpay because it paints too rosy a scenario, one that does not have legs to sustain it for long.

I would think that accumulating HANS at 30 should be a good move, a good stock at reasonable prices. But it could well go lower. Some people will not read the news until the weekend and likely on Monday there will be a selling frenzy in the early market hours. I think we can safely stay pat until next week.

Denny Schlesinger
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No. of Recommendations: 2
S+M - just tried to help with the basic realities of playing the game. Take it FWIW, if nothing to you so be it. To the others, what I said is paramount to winning. All accounts of mine made new all time highs this Tuesday.

I tried. I'll but out.

Good trading,

Russ
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No. of Recommendations: 4
Here's a sobering thought for you - losses count a great deal more than wins.

I'm not sure I agree with you. Say you buy three stocks, putting $1,000 into each. One is a winner, appreciating 25%/year for five years. The second falls 25%/year. The third goes completely bust in year one. Your results after five years on your $3,000 initial investment are as follows:

Company A: $3,052
Company B: $ 237
Company C: $ 0
------
Total: $3,289

Not a great five year return, but you're still up, despite being horribly wrong on two of your three picks. Granted, finding a company that will grow 25% for five years is not easy, but neither is picking and sticking with the two huge losers.

Paul
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No. of Recommendations: 0
From my experience in the past year, I am carefully listening to TheRTTrader's comments. He is one of Fooldom's successful investing trader. Last year my portfolios were up about 50% until I stopped trading last winter due to time constraints. Big mistake. While most folks here are long term investors, traders have something special to teach us, such as cutting losses at a reasonable point and letting our winners run.

http://www.therealtimetrader.com/

best, sm
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