Hi, I've been very casually following SVU as it dropped down into the $1.80 range and as it's been climbing out of the hole. Can someone give me a quick case as to why they think the price is in the high $6s today and if there is good cause to think it will continue upwards to where it was several years ago? Or is this rise short lived before more troubles beset the company? I ask because it's climb in recent weeks has been quite dramatic and so I have to question if this is real or something baked into the stock price so that shorts can rush in and make a few quick bucks.,Honest and thoughtful answers please. No pumping or dumping. Just the facts as you see them would be greatly appreciated.
Look at its chart and look at the type of business. It a very old business, wholesale distribution. Was really booming until it bought Albertsons in 2006. That investment took it down plus really bad management. They could have sold off the problems themselves and this company would really be in the green. But as it is Cerberus made a lot on the sale and still stands to make a lot on the turnaround. Basically the company is back were it was in 2006. I think the stock should be in the $10+ range right now. Cerberus would not be in this if they did not see $$$$$$
Fundamentally you are correct, it is a very old business that was making money before the Albertsons purchase. The flaw in your post is thinking that "basically the company is back where it was in 2006". While the company may look similar to 2006 it has 1/3 the cash flow and 4 times the debt. Cerebus is in it to make money so look for more pieces to be sold or closed.
Thanks for the candid response, Bull. What about the $1.4B loss in Q4? That is huge. What is the timeline for them to be back in the black?It just seems to me that it's climbing too fast. What is your take Bull?
I see this as a pure momentum play at present. I got in at $4.90 a few months back and see $8.50 as my current target to get out. Not sure the fundamentals have any link to the stocks action at present. Options action is also positve so enjoy the ride