I'm trying to have a rational dialogue with both of you, as I respect your opinions even if they differ from mine. But your latest discussion regarding the publication of "no news" absolutely left me stunned!
There is NO requirement in the world for a company to put out a press release to say that they don't think they're winning any contracts in the foreseeable future. NONE. That is not considered a material event. But, if the company was close to winning a contract, had been told that they were the victor in a bid, or were anticipating an award (told by the potential customer that an award would be made on such and such a date), the CEO would not be buying stock with that knowledge. He'd be required to wait until that information was made public. Otherwise, he would have traded having knowledge that the rest of the world did not.
Again, it is my belief that both the attorneys and the CEO himself are smarter than that, and therefore felt it was ok for him to buy shares. If that's so, it's not a stretch to assume then that there won't be any major contract awards being announced in the near future.
But under no conditions is the fact that I might be right, and they don't think they're winning anything for quite a while, a reportable event. That's just plain silly. It's just like when they (or any company) don't announce that they DIDN'T win a bid. They never do that. It would only be reportable if they had already told us they WERE winning it, and then for some reason, they didn't get it. And that isn't happening here.
Yes, CI's post didn't make sense to me, so I figured he was either drunk or daft. I incorrectly guessed drunk.
buxgr3, Could not agree with you more. If there were no awards for sure, in the next 90 days, it would HAVE to be announced. It won't be, because an award would be considered a future event and the entity, corporation, or government are not that stupid to make individuals aware of a major event before it is announced. This is not the 1980's. I guess an individual who is short or looking for a stock to decline will try to spin on just about anything.
One of the problems with your post is that if he had certainty that there would be no awards for 90 days, this is a material fact and must be announced. The poster's points are correct in my opinion.
curious, I disagree with you extremely...... If an officer of a company buys stock in the company he works for and makes full disclosure, which he did, of all known events there is certainly no chance that the SEC can look for trading on inside information. All officers, board members, and other company employees are governed by the same rules when it comes to insider trading. There are no separate set of rules for a CEO. There is no exposure when you make full disclosure of known events. The company has many millions of bids outstanding and the event of winning one or more of these bids is mutually exclusive of purchasing shares of stock in the past. Your assumption that there are no major bids coming in the near future is just what it is: YOUR ASSUMPTION. So you don't like this stock. I happen to think CVU is a fine investment and I have put my money where my mouth is. Should be an interesting ride for the next year and a half, at least. I expect the company to fall at least in the projected ranges of the outside analysts. If I am wrong, I will admit it.
I will also explain the company's cash flow to you at a later date.
Please read what I posted. I absolutely did NOT accuse the insider of buying on insider knowledge. I have no way of even making that accusation! What I did say was that the insider trading rules are pretty clear, and for the CEO they are even clearer. If something big happens soon, he will be under intense scrutiny because of his purchase. Since I don't believe that he would expose himself to that, my actual assumption, for what it is worth, is that nothing big WILL happen for quite a while, and he knows that. Why else would he expose himself like this?
And the record company backlog is not funded, so keep that in mind. That number includes options, and potential values, and is not firm business.
Yes, I believe 10 is a fair multiple for a company that saw its highest earnings year three or four years ago, that has a shrinking gross margin, and has always had severe cash flow problems. My point is that the estimates for this year and next (and the company hasn't said anything yet about 2016) are not exciting, and don't come close to approaching the years under different leadership.
But I appreciate you sharing your reasoning. I'm not saying it's wrong, just that I see it differently.
Again, I will not respond and recommend no one else respond to the haters. I based my purchase of CVU last month based upon several factors. I always made out better with my investment, when a stock is beaten down or appears that way from others and has good prospects GOING FORWARD, not looking backward. CVU booked $24.2MM in new orders in the first half of 2015 compared to $19.2MM in the first half of 2014. The company backlog is $446.6MM at June 30, 2015. This is a record and up more than 10% over the same period a year earlier. 2015 looks like it will be a record for revenue. I fully understand the percentage of completion accounting for revenue recognition, and so do the organizations that are financing the CVU operations. Another poster believes that CVU should only receive a multiple of 10 x earnings per share. The research that I have seen for this stock and others in this industry indicate multiple of 16-18 range. I believe that CVU will execute on the guidance that they have put out, and the analyst estimates for this year and next. If the company does not execute, I don't feel there is any downside. If the company does execute, I will be that much closer to retirement. There are many people who post that they made so much on a particular stock or investment, after the event. I take responsibility and post before it happens and if I am wrong will admit it. I will also take credit and smile a lot if my logic and analysis proves correct. I fully understand the circumstances of the insider purchase of shares on the open market and commend that individual for investing his capital in CVU. If the company receives any more major orders this year, after this individual's purchase, it will be result of all of the hard work and experience of the company putting out a quality product. Suggesting that an officer is buying shares based upon inside information, in this circumstance is quite silly.
Hey buzgz3? Do you have an intelligent answer? Is the person who told me this wrong? Are there no buying plans that he could have used? If he announces a new major contract award tomorrow, doesn't that open him up to scrutiny? As one poster said, and rightly so, he disclosed everything in the quarterly earnings, so there "shouldn't be" anything big or exciting coming. If he knows about something, and it happens, then he DIDN'T disclose everything, did he? And he profited off of it. Isn't that the definition of insider trading?
But I'm not even getting close to accusing him of that. I would think that the lawyers at CPI are much smarter than that, and there would be no way they'd let him buy stock if an award was imminent. Therefore, I stick to my theory that says that all of this means, there's nothing coming down the pike for a good three months or so. Now how does that make me drunk for what I posted?
At this moment, and of course it could change, it would appear that 2015 will be CPI's worst award year in the last five to seven years. Again, that could all change in the last six weeks of the year, but as of right now, it's not looking good.
Now the rest of you, get your thumbs down button working. Sheep.
frog4face, thank you for explaining your reasoning. I for one, don't have a grudge. I started posting by asking ANYONE to show me why this is a good stock. My analysis said that this stock was overpriced and has some severe cash flow issues. Not one person would engage in an intelligent conversation about it. All they've done is post anonymous thumbs down. You have stepped up and presented an opinion. which is all I was looking for. I can't speak for the rest of the "negative" posters, but my negativity is based on those points.
So I will then ask you, what about this year's estimates and possibly next year's projections have you excited. If they hit this year's targets. the eps will fall between $0.81 and $0.93. I don't see how that is exciting, or justifies a multiple of more than 10 time. So that should yield a stock price of $8.10 to $9.30. What do you see differently?
Revenues seem to be going up, but gross margins and cash flow are going in the other direction, are they not? Just look at the historical numbers. This will be their worst operating gross margin year as far back as I could research.
So, please, I welcome your differing opinion, but could you tell me what things YOU see that make you feel that way? As one poster says all the time, the facts are the facts. And the facts that I see say something very different about this stock and this company.
rightstuff, I have only owned CVU since the end of July, so I am sorry if you have a different time frame. If the analyst estimates are anywhere near correct for this year and next, this will be even better than my LMT position over the past two years. I have always believed that the movement of any stock is about the future, not the past. If CVU executes close or better than forecast, this will be a home run. If they do not execute over the next year and a half, we will spin our wheels in this price range. Time will tell if my investment here is correct, or you are correct.
How do you put a positive spin on the fact the share price has been in the toilet for the 17 months that changed CEOs. That's alright, you can not give me an intelligent answer to readily available public facts, so I expect thumbs down, which says a lot more negativity about this stock than anyone posts. You are your own worst enemy.
Sentiment: Strong Sell
I find it amazing that the CVU haters continue to put a negative spin on anything and everything. Nobody should answer them, as they think this is their forum to continue the personal grudge they carry. On another board, the hater used the yahoo message board to do the same thing, and it was later discovered that he was an employee that was fired from the company he was posting his hate against.
All one has to do is look at the balance sheet from Q2 to see that the A/R had gone down over $6.6MM and this was mirrored in the debt being reduced by about the same amount.
The CEO made all the right moves when buying company stock on the open market. He purchased shares after release of the Q and made full disclosure of what the company expects, then filed his SEC from 4. If the company now wins a bid from all of the outstanding business bids they have outstanding, there is no figment of a case for insider trading. Just the complete opposite.
Judging by the swings in the market and the trends of this stock, I find it highly unlikely that 1) the haters have any influence in the direction of CVU stock. They simply use this forum for a "vent" for their own personal situation.
Have the guts to comment! Make one solid argument. How can you give me a thumbs down when I ask techstockman to engage in an intelligent conversation? You people are embarrassing yourselves!
As I have been calling for insider buying (though from ALL the insiders), and while I don't think the CEO bought enough, I really expected the reaction to be better, and perhaps bump the price into at least the mid $10's. After all, he went out and did two investor conferences immediately after making the stock purchase.
I was speaking to someone over the weekend who is a whole lot smarter about this than me, and he explained why the buy didn't help. His first comment was that he didn't put enough skin in the game to get people excited. Ok, maybe so. But his second point was very interesting. He said that when insiders buy, they can do it one of two ways. They can establish a buying "plan", meaning that they establish paperwork that says they are going to buy a certain amount of shares at a certain time each month based on price, volume and other factors. Or, they can do what McCrosson did, and just make an open market purchase. He said there is a big difference in the two, which I did not know.
If you buy through a plan, because you are tied into factors that the plan calls out, you can buy even if you have insider knowledge of events, because your buying is regulated. However, if you buy in the open market, like he did, you are telling the investment community that there is nothing in the pipeline that you're aware of that would make the price go up. If you did, you'd be trading on insider information.
So what McCrosson did was tell the whole world that CPI doesn't expect to win anything new, or have any good news (other than what they've projected) for at least the next 90 days! If they announce a $100 million award anytime soon, and the stock he bought at $9.90 jumps to $12.00, he's going to be hearing from the SEC. And I don't think the CPI lawyers would let that happen, so it really points to the fact that the $23 million in new awards won't be getting any better before mid-November. Could it be their worst award year in recent memory?
You raised some points in your post and accused people (rightly so) of being rude. I answered you politely, but asked some pointed questions of you too. You haven't responded at all. This is why the supporters of the stock get so much grief. When presented with a legitimate query, you all just disappear!
I've been away from this message board for awhile, just because.... I needed a break. I try to be the honest broker and not take sides in this cat fight. But:
1) it is noble Doug bought some stock, albeit not a whole lot, probably because under pressure from the boards - this message board and the CPI BOD - and also he is bottom fishing and buying low - although he has lost money since his purchase.
2) the earnings again sucked and the propaganda is boring - $450M backlog - it goes out 10 years and is not firm - includes options and forecasts. This company needs to get some real new business. JSF work is nice, but it is a small content.
3) Who is B. Riley and where can you find the $1.30 EPS forecast for 2015? That would say this is a $18 - 20 stock - Wall St is a lot smarter than that - they wouldn't let such easy money as that be left alone. I am suspicious.
And cash flow? $6 million in H2? Tell me how? In H1 they received a HUGE tax refund. Yet even with that influx of cash, their line of credit balance is essentially the same as it was in the beginning of the year. their cash balance is down from the beginning of the year, and their A/P balance is up almost $2 million!
Now, don't just look at that, but consider H2 revenues. I will retract my statement in an earlier post about not believing they can generate all the revenues they say they will in H2. The use percent compete accounting, so they can actually make the number be anything they want. And that's not a swipe at them for doing anything illegal. It simply means if they bring in more material, just earlier than perhaps needed (but will still legitimately be used), it will grow their revenues. But now ask yourself this. If they Do bring in all that material, how much bigger is the A/P balance going to grow by? How can cash flow increase by $6 million with that much more in payables? And to generate cash flow like that, your jobs have to be incredibly profitable. We already know that their margins are the lowest they have been historically.
So, I'm just saying that I'd watch out for the propaganda, especially when it's coming from people who won't back up their own rhetoric, and by research firms who aren't the most highly regarded in the world. Cash worries me the most here, as even when the other CEO ran the company, who I thought did a great job, this company was never a cash generator. To hear that they're going to generate it now, with all of this buying, and the lowest margins ever, just makes me think we're being sold a bill of goods.
I truly welcome your thoughts, as I've asked numerous posters to engage in an intelligent discussion about this company. So far, none have stepped up.
Well, I've never accused anyone of being the CFO, so I'll answer you. I will state that I believe people within the company are posting the thumbs down though. It happens too fast after a post. They must see it and rate it immediately. Most people wouldn't be sitting at their computer looking at the CPI board.
Now, for Doug, good! About time. It's a miniscule amount, as it takes him all the way to 12.000 shares owned, where I think the former CEO had about 150,000 shares, but giving credit where it is due, it's a start. I wonder why he would spend the $50,000 now, when in March he got a $50,000 bonus that he wasn't entitled to, and didn't buy the shares then. But again, I'm being negative, and pro-CPI people will see this as a positive, which it must be considered as.
Now, if I might engage in a dialogue with you, let me ask you a few things. Where is the CFO in this stock buy? He knows the numbers. He produces them every quarter, and he knows what the future looks like. Where is his 5,000 share buy? Where is the chairman's buy? Someone can correct me if I'm mistaken, but I don't think he's bought a share in 10 years. Where is his buy? Where are the buys of the two new board members? Neither one of them has an ounce of skin in the game. When are they stepping up to the plate? And I'm not bashing! I'm asking what I believe to be legitimate questions. Do you disagree? Are shareholders wrong in expecting that type of commitment from their management and board? If you disagree, tell me why.
I caution you, be careful about the numbers you are believing. I've never seen the B. Riley estimates, but I'll ask you this. $1.30 eps next year? Do you (or they) realize that this represents almost $11.2 million in net income next year? Seriously? With the continuation of a program (A-10) that yields a zero gross margin? I don't buy that for a second.