I am curious as to why this stock is trading at these levels. The fundamentals on this stock look excellent (P/E - 4.90, P/S - .08, P/B - .33) especially when they are compared to other stocks in their industry.
Insiders have been consistently purchasing the stock for the last 12-18 months, so it does not appear that there is some horrible news on the horizon that will change the prospects for the company.
The debt to equity ratio is also fairly low (.69), so it does not appear that is company is hampered with an excessive amount of debt.
I am asking this both to evaluate STRZ as a potential investment and to gain some insight to use on another stock I own that appears to be in the same situation as STRZ.
Ok, I didn't notice or pay attention to the 'surpress earnings comment' you are speaking off. In general, I don't know of any hanky-panky in STRZ accounting. But there is a huge contrast between the press releases of companies that try to make their performance sound good, spinning positives, talking about pro forma this and that, etc. and STRZ which takes as many charges as possible, often talks about a loss, and buries the cash flow numbers in the 10-Q. I've never seen anything from STRZ that sounded like an attempt to encourage interest in the stock.
Most of the institutions here would welcome any kind of liquidity event. I agree that the Asset Value people are serious investors and may be our saviors at some point. what a statement Wheaton makes when he says he will not go private. The only reason for a company this size to stay public is to support growth and acquisitions-of which we have seen neither. It costs 750,000 per year to stay public and the company's EBITDA is only $7.0mm.
You may be right, but part of my intent with the comment about the patience of institutions was just to play devils' advocate to the notion expressed in a previous post that STRZ could just suppress earnings for a few quarters to squeeze out non-insiders to pave the way for a private transaction.
In this case, I believe it is reasonable to state that institutions are far less likely than individual investors to fall for this type of ploy and are far more likely to demand "economic value" - to use your words - which would decrease the likelihood of a private transaction at current levels.
Wheaton told me years ago he was NOT going to take it private but instead suggested he would be open to something else. Since then, he hasnt done anything.
I think they could pay out a $3 share dividend or better yet, sell out to CKR who just bought SBRG.