...is that everyone had expected earnings on the level BDR now has reported. For a renewed surprise more than 15 Cents (number of the quarter before) would have been necessary is my conclusion.
A probing question is, whether the last two quarters were positively impacted by a large single order and which level earnings will reach going forward. I would expect a decline from the exceptional results of the last two quarters. However, BDR should be able to earn 7-8 cents per quarter going forward which would result in annualized earnings of around 30 cents. Therefore, I dont understand, why this stock still trades significantly below a share price of $3 which would imply a PE of 10 with my conservative expectations of 7-8 cents/quarter going forward.
I had the same problem with Mod-Pac (MPAC) yesterday. Earnings rocked (28 cents a share with a closing price before the announcement of $4.89) but the stock did nothing. MPAC should earn 60-70 cents this year as the seasonally strongest fourth quarter will add around 40 additional cents.
My opinion has changed dramatically after carefully reviewing all available information again. That is why I sold all shares I had...
1. The big order worth $4.1 million has inflated the last two quarters to an extent that will not be reproducable without a similar large order in the near term. Such an order is not on the horizon at the moment according to recent managment comments.
2. Sales will be down in the next quarters to around $7 million. At this level, the company will produce breakeven or slightly positive results only.
3. My prior expectations of 7-8 cents per quarter are absolutely unrealistic. One should think about 7-8 cents per year - and this would be very positive!
4. There is no reason to buy this stock now because the company is and will be boring as it was the years before the announcement of the large order.
5. No one will take this company private. There's no reason! Many companies trade below book, despite having nice real estate and intellectual properties!
all true..and one more thing..in the past, the co. has stated that q4 could do .15 as well and said that there could be add'l orders of 6 million (after the 2 million in q2). No word of that now..also, the .30 u speak of is untaxed. On the plus side, there are new products being introduced in q4 so that's a positive...i think it's slightly undervalued here
You expect $3+, but you do so just on earnings. If that becomes reality, the stock will be priced at its "close the door" breakup value. Don't you give any "credit" for over $3.30/share in tangible book value? And I believe they've stated that their property is greatly undervalued on the books. 25 years of high tech small cap and micro cap investing -- this stock is one in a million the way it is being priced. Can someone please find me an equivalent story, profitable tech company selling greatly under tangible book??
All this IMO only, everyone needs to do a full due diligence.