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Velti plc Message Board

  • dtgillard35 dtgillard35 Feb 25, 2013 6:00 PM Flag

    Just listened to CFO comments from analyst day...

    Highlights:

    - Focus in 2013 will be on free cash flow generation. He expects cash to be sufficient through 2013 and expects the company to be free cash flow positive in 2013.
    - He expects CapEx in 2013will be "materially" below 2012. He put a figure on it of 50.0% of 2012's level which from his tone sounded conservative. The majority of CapEx cost was related to the divested Balkan assets.
    - He did make the comment that 2013 Revenues and EBITDA will be lower than 2012 as a result of the divestiture, but it's kind of obvious this was going to happen. However, Balkan assets represented only 13.4% of revenues (most conservative estimate of $15MM/$112.1MM) in original Q4 estimates. Does a stock really deserve a 30%+ nose dive on this news when other markets (that have better growth rates) comprise a larger share of revenue (USA and UK together represented 53% of Velti's revenue). What good is the revenue if it is never turned into cash? This is a huge positive for this company's operating results going forward.

    In total, between the CEO's comments on the Q3 earnings call coupled with the new strategy of the CFO to actually turn revenues into cash, I am long Velti and think that two quarters from now anyone not buying here will seriously regret this missed opportunity.

    Do the homework yourself and stop listening to all these nitwits who expect the stock to double in a day. The trajectory for this industry and, more importantly, this company is upwards. Get on the train before it's too late!

    Sentiment: Buy

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    • I will translate his remarks for you:

      1.
      actually we have no choice other then to focus on free cash flow generation while otherwise we would have to file for chapter 11 rather sooner than later

      our cash might be sufficient for 2013 as we miss out on capital expenditures but we don't know what things will look like beyond this year

      I fully expect Velti to deliver dismal results and outlook on the next call and the company to be gone about six quarters from now.

      • 2 Replies to hageneriksson
      • Stock was strong all day on analyst event day and I wish I had dumped on that afternoon but didn't know the new CFO was a complete idiot imho

        Sentiment: Strong Sell

      • Your translation is more opinion than fact. CEO on the Q3 call reiterated the full year revenues and EPS and confirmed that they expect 30%+ revenue growth YoY in next few years. Taking expected revenues of $279MM in 2012 and increasing 30.0%, that's 2-13 revenue of $362.7MM. Increase it only 20.0% and you still end up with 2013 expected revenue of $334.8MM, within the current range of estimates. I think all it takes is a Q4 earnings and outlook that meet expectations and we shoot higher. The way the stock has behaved since CFO made his comments, you'd think the company was going bankrupt within a week. I certainly wouldn't be short this stock going into earnings. These near-term dips are extremely frustrating, but I feel I have done my homework enough to know that this is a long-term winner and therefore will use this illogical movement in share price to add to my long position.
        Cash is a concern but if they are cash-flow positive for the year (as both CEO and CFO have stated they should be), liquidity concern goes away. The CFO on analyst day made a comment along the lines of he expects free cash flow to be "substantially positive" for 2013.

        Your grim outlook for Velti is completely contrary to the trajectory of sales growth over the last year.

        Sentiment: Buy

    • Glad someone here is smart and makes sense based on true facts. I have to fully agree with you and that is the reason why I have been adding more since that analyst day event drop. Way too oversold due to overreaction. Stock will be $10+ in 2013 without any question. Patience will pay off big here as the industry is on growth mode. Even Melinnia Media (MM) CEO recently said the opportunities in the sector are "incredible".

      Sentiment: Strong Buy

 
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