It’s also possible there won’t be any more scanners to test drive: “We’re still in the enviable position of perhaps selling them a little faster than we can make them,” said Greg Richards, supervisor for public relations and events, “so there’s certainly not an unlimited quantity, or even a very large quantity. There’s a fixed number and a fixed amount of time to this.”
Google: sparpointgroup Take a Faro for a test drive
FARO is finally getting to a P/E ratio that won't scare people away. I recall FARO has a $200M stock shelf offering that could come/surprise at any time. Why do you think Jay is doing that? Is thinking he wants to buy some company? If not, I would think FARO is generating enough cash flow to finance any R&D or manufacturing expansion it wants or needs to do.
Yeah, Keith mentioned recently that they were looking at a handful of companies....they also have been filing these statements regularly since i've been an investor...no action so far...Faro takes about 5 years to make an acquisition pay, but they have been very strategic in the actions they have taken.
There are good reasons for shelf offerings (e.g. strategic acquisitions, paying off high-interest debt) and bad (e.g. running out of cash).
My guess with FARO, given it's debt and cash position, is that Jay is positioning himself to do an acquistion in the not-too-distant future. I am also guessing that the 4th quarter is going to be gangbuster (despite two very disappointing preceding quarters) which will result in a nice bump in FARO's stock price. I just can't imagine Jay contemplating an acquisition using stock before maximizing FARO's share value and purchasing leverage.
Ergo, I have been accumulating slowly on dips since it floored at 32, and may well break my "rule" about holding through FARO's next earnings report.
Other reasons for breaking the rule::
1) 4th quarter is typically FARO's strongest.
2) uncertainty about extension of the currently generous Sec 179 probably spurring some order acceleration into 2012.
3) the current stock price being at a very tepid PE multiple relative to sales growth potential.
Best wishes to all for success in your 2013 investments!