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PFSweb Inc. Message Board

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  • cliffbanger86 cliffbanger86 Dec 26, 2011 9:03 AM Flag

    News on Kraft...soon also from PFSWeb?

    Excellent questions. First off the company is currently trading below 3 due to a couple of momentum funds deciding to go elsewhere over the last several weeks. The trading activity on a daily basis is very consistent on this basis. Tax loss selling only added to the selling pressure this month albeit on a far lesser magnitude. Both of these selling pressures should alleviate sometime this week and uptrend should begin as company is far oversold here.

    The company has reportedly stated at investment conferences that the infrastructure alone is worth $100 million. There are really only a few competitors that do what they do for large retailers.

    The company has certain fixed costs that have to be absorbed in order to turn a bottom line profit. They are very Ebitda positive and have little debt service . The importance of getting new clients will start to be evident now as the company is at the point of bringing bottom line profits. executive salaries rent gsA stock comp depreciation amortization interest expense office staff are all pretty fixed. When you add clients at a 25% gross margin and your fixed costs are covered then you have finally reached the revenue level where profits will start flowing.

    Microcaps move with momentum. Unfortunately that momentum was negative for last few months due to factors in many ways outside of company's direct control. Company has been bad on PR. They should push on getting names released. L'oreal has never been named a client. Neither has Kraft. Hopefully that changes soon.

    As for eBay or amazon, an analyst once told me that companies don't usually get acquired until they are showing bottom line results if they are d pected soon. Acquirers would rather pay up a bit for profits than pay less simply on potential. No doubt in my mind pfsweb can be acquired for at least $8 right now and be justified, but it is more typical to bring better results NAND then get acquired.

    I doubt you need to lose sleep over where pfsweb is heading. It is going up. It hs simply too low. When is the question but my money is if us far sooner than later.

    Happy Holidays

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    • And no PFSW is not the only and best stock on the market. I love what if can do in 2012 but there are plenty of beaten down equities as well. I do not have blinders on just for PFSW. It will be one of many to have superb returns in 2012 in my opinion.

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