It looks like you sold your position in ELLI and I was just wondering why? Is it because the mortgage market seems to be slow?
ELLI has a lot going for them. They have a reservoir of people already signed up and waiting to be activated (which is like a big backlog), they have recurring income for a large part of their revenue, they have a dominant position which can’t really be challenged (their moat is too strong).
However, looking at this realistically, they’ve had some poor, poor quarters.
This was the second quarter in a row of revenue growing less than 5%, where we had gotten used to growth of 40% to 50%.
Adjusted net income was down significantly for the third quarter in a row. This time from 7.6 million to 4.6 million. (That’s not just a little drop!)
Adjusted earnings were down in a major way for the third quarter in a row too. From 27 cents to 16 cents. (Who cares if they beat even lower expectations).
Second quarter earnings also predicted to be down year over year.
For the full year 2014, they predict earnings equivalent to 2013’s earnings (which was down from 2012) and this prediction is a reduction in their estimates.
The only good news is that this would mean a big improvement in the second half of the year, if it happens. they’ve been promising a turn around and it’s not been happening for about three quarters now. I just got tired of waiting.
On the other hand, they just announced a major stock buy-back plan.
Also, I was wondering if you use stop loss orders so that if a stock starts falling quickly that you don’t lose so much.
I never use a stop loss. With volatile stocks like this, if you put a stop loss at say 10% below market you are just ensuring you’ll get sold out for 10% less than it’s worth now. If I decide I want to sell, I just sell whole or part, at the now price, not 10% lower.