Gems TV   

Sparkling gemstones

risk = unknown... definitely cannot go in at time of uncertainty...

opportunity = chance, may have to wait a long time...

 

Risk = Opportunity !!

 

This is one of the most riskiest counter ever.  If you want to play with, need to wait till it is stabilize first.

But more risk ... more money isn't it?

 

Target price is just a target - it is the distance that matters! Put a target too far, chances of missing is greater than a nearer one.

Set your own target according to your own ability and rules. If still can't get Bullseye, change the rules! Cheers!

 

I don't trust what target price all are bullshit !! They accumulate the share all low price than tell you it will reach certain target within a period . when the time you going , this is time they escape also !!

 

Normally , i place my own target of 10-15% below the TP projected by those stock brokerage.

if current TP is $1

my expected tp is 90c

will be buying at 81c or below
In case if it nvr hit,, still have some profit.
what do you guys think of this strategy?

 

 

 ten4one...

I certainly agree fully with you... :)

 

Sad to say this;  " Human beings being human would like to hear only the good things and ignore the bad! " This gem is sparkling for the wrong reason and as the end result, the share price has headed south to the border., and I couldn't see any potential for it to head north. If  I were you, I'll bite the bullet and look for not so 'sparkling' gem that can bring home the bacon at least. Cheers!

 

so what it is saying here is that even the 0.7 tp will be tough to reach because of the uncertainty and difficulty in forecasting

 

Lessons from Gems TV's stock price rout

By R SIVANITHY

SHAREHOLDERS of home shopping retailer Gems TV must be feeling bewildered - and no small number despair at how quickly things have turned sour. Here was a stock that, when it was listed last November, was touted as one of the market's best prospects. As recently as eight weeks ago, brokers were targeting its price as high as $2.60 - 141 per cent more than its $1.08 offer price.

Perhaps the most important consideration from this sorry episode was the insufficient attention given to the risk factors surrounding the company. Instead of reaching these dizzying heights, Gems TV's shares have crashed to around 70 cents now - 35 per cent below their offer price. It's an unfortunate turn of events no doubt, but the Gems TV saga holds many valuable lessons for investors in today's caveat emptor market where regulators have become increasingly hands-off and where market discipline is preferred to official scrutiny. Gems TV, as its name suggests, sells coloured gemstone jewellery on TV in the United Kingdom. Two of its main selling points that undoubtedly attracted analysts' attention when it was listed were its low-cost manufacturing in Thailand and its ambitious expansion plans in the United States, Japan, China and Germany.

Thanks also to the fact that it had reversed a loss of US$0.2 million in 2004 to a profit of US$28.8 million in 2006, Gems' shares enjoyed decent support in the first couple of months of listing, staying well above their offer price. The counter really took off after a Feb 12 conference call hosted by chief executive Jason Choo, during which he was quoted the next day in the press as saying that 'we are doing very well in the US where sales continue to grow in line with expectations', adding that 'the biggest problem is that we do not have enough quantity in each line to satisfy demand'.

These statements sent the company's shares up 17 cents, or 13 per cent, on Feb 12 to $1.45, drawing a query from the Singapore Exchange (SGX). On Feb 22, Credit Suisse, which was the sole global coordinator for Gems TV's public offer, issued a 'buy' when the shares were at $1.49, setting a target price of $1.94. The main reasons for the recommendation were the company's low-cost Thai manufacturing and first-mover advantages. Gems TV's shares that day gained five cents to $1.54. On March 27, DBS-Vickers, whose parent DBS Bank had been one of Gems TV's IPO underwriters and placement agents, issued a 'buy', revising its target price from $2 to $2.60 and saying 'the outlook for Gems TV keeps getting brighter'.

The $2.60 target was a 26 per cent premium to Gems TV's peers but this was seen as justified because of a forecast compound annual growth of 60 per cent from FY2006-FY2009. The report on that day sent the shares up 14 cents to $1.80. On May 14, only seven weeks after the DBS-Vickers report, Gems announced a 12 per cent third-quarter sales drop to US$39 million and an 88 per cent drop in earnings to US$1.3 million, the former because of a difference in accounting treatment for sales between 2006 and 2007, and the latter because of higher-than-expected selling and administration expenses from its US expansion.

Mr Choo on that day hosted a conference call with analysts and was quoted the next day as saying that the company faced a challenging next two quarters and that performance over these six months would probably not be much different. The Q3 figures had apparently also been dragged lower because a UK competitor had managed a near-carbon copy of Gems TV's product. From its high of $1.80 reached on March 27, the share price has now lost about 61 per cent. Of course, there is still a chance that the 12-month target prices set by the various houses could still be met, though it has to be said the chances of this occuring are now very slim, especially as the company's own management has said that the next two quarters are expected to be difficult.

Perhaps the most important consideration from this sorry episode - apart from the obvious observation that brokers can go spectacularly wrong - was the insufficient attention given to the risk factors surrounding the company. These factors were well-documented in the IPO offer prospectus but the market probably glossed over them in its eagerness to embrace an admittedly compelling story.

For example, on page 18, the absence of a track record was highlighted. 'We have only a limited amount of historical data regarding our operations as an integrated entity and it is difficult for us to make projections for the future, in particular with regard to sales levels and operating expenses.'

On page 19, the company said: 'Many of our current and potential competitors have advantages over us, including longer operating histories, greater brand recognition . . . and significantly greater financial, marketing and other resources'.

And finally on page 22, it said it was 'highly dependent on a single market', namely the UK. All told, the rapid decline of Gems TV from its position as an IPO front-runner provides a stark illustration of what investors should think about when operating in a caveat emptor market. For instance, when presented with high target prices for a newly listed company that possesses a short track record, a good starting point might be to get familiar with the risks instead of focusing on just the rewards.

 

looks like a great run today... short squeezing ?

 

Don't be so happy now they are just spread germs....

 

exciting run up...now at 0.715.. institutional buy ins?

 

usually target price are talking about 6 to 12 months down the road.

 

there shld be 50% discount to 70

 

DJ MARKET TALK: Credit Suisse Cuts Gems TV Target To S$0.70

0705 GMT [Dow Jones] STOCK CALL: Credit Suisse lowers Gems TV's (AM3.SG) target price to S$0.70 from S$1.01; notes that, during a recent investors lunch, management again pointed to the seasonality of its business, it expects a weak 4Q07. Cuts net profit estimates by 15% to US$9 million in FY07, by 20% to US$33 million in FY08; keeps at Neutral.

 

agreed smiley! good post x2

 

absolutely agreed esmiley...!!  good post!

 

I don?t understand. Thought I read somewhere that the result for the next two quarters will still be bad. Why do we want to commit our limited resources to buy and hold onto a stock that may or may not recover. And if it recovers will meet with lots of resistance on its way up. Just look at JurTech. Our objective here is to make money and there are so many good stocks with great potentials we can sink our money in, whether for short term trading or long term hold??.my two cts view?.

 

From the technical analysis, it should be bottom out soon.

My experience on Jur Tech, Osim, Sarin, NOL, etc tell me it is a time to monitor now and BUY.

But must hold , now may not suitable for contra player.