I owned a comany 10 years ago and competed directly with SMBL on our canoleo margarine. after selling our company SMBL started to really grow their sales. I think long term this will be a good stock to own at 5.00.
Let me start by saying that this is one of the better threads posted on this message board in some time.
I continue to be a long term supporter of SMBL because I believe in the product and the management. I don't understand why they did what they did (re options) last month as on the surface it stinks. But deep pockets let them do it. Perhaps more on this subject later.
I listened to the conference call yesterday. I've heard them all since 07. Although they tried to maintain a positive spin, I've heard better (more positive) calls when they had far worse (negative) earnings. I think they were surprise by how much there their sales had dropped.
If there is one positive side to all this, it is that the insiders are all under water.
As far as capitulating, I don't believe in riding a dead horse. And although I don't believe in beating horse or dog, dead or alive, I do believe in punishing a bad stock. Yesterday I was fortunate to have a margin account that did not contain any SMBL. So I started shorting in that account as I liquidated my long position in 4 other accounts. By the end of the day I was short in 2 accounts, 0 in another, and had a much smaller position in the last account. By the end of the day I had a net short position, to which I have extended so far this morning.
This stock will most certainly see $5 before the end of the day. I expect it to plunge to around $4.85. There is 1:3 chance in sniffing $4.50.
Factoid - less than 2 million shares have traded below yesterday's low. There is essentially no support below $4.85.
One other positive thing that came out of the conference call is that after the blackout, SMBL can start buying back stock. I also expect to see management cost average down. Remember, they are deep under water on all the shares they have bought at market price, much less options.
In the meanwhile, I will pitch in and beat this stock like a borrowed (fill in the blank). But I will start going long again in a couple of days. I've followed this stock since 07 and if you can belive it, I've been able to maintain a profit, but not by buying and holding. In a couple of years SMBL could be worth $15, even $20. But it will take some time...
Q4 earinings $0.00/share. Q4 10.1% drop in sales. SMBL will get pounded into the ground today. This stock is dead for at least 2 months.
I have more shares than I care to think about. But not for long. Regardless of what this stock's long term potential is. No reason to hold on to a sinking boat when majority of market is moving forward.