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Iteris, Inc. Message Board

  • friendofthetrend friendofthetrend Jul 15, 2014 6:30 PM Flag

    What to do now

    The audit problems have resulted in the resignation of the CFO. Until we know what the improprieties were, it's hard to value the company way beyond cash value, which is $.63 per share.

    But then there are intangible assets that cannot be taken away be misreporting.

    For example, they have been in business for decades and have many relationships with transportation authorities and many patents and marketable solutions and they are experts in their field with many contracts in effect that last for years. They also have a pipeline in the 30M range but we'll have to see what the accounting errors were.

    I sold my position on 6-27 and gave my reasons why.

    If I hadn't, I would not sell this stock if it should ever drop anywhere near $1. But I, for one, would sell right now if I could get over $1.40 or so which might well be had.

    There will be a lawsuit on behalf of shareholders, so that's something to keep in mind.

    The company will survive this. They have a good cash position and a good strategy for increasing value once a bottom is in, imo. Keep in mind that cash on hand and cash flow are numbers that are hard to manipulate and these numbers will continue to support the enterprise valuation.

    With the CFO gone, the CEO should be able to retain credibility and soldier on with strategies for increasing the value of the company. I don't see this effecting relationships with customers. Not at all.

    Their debt and cash position are formidable enough.

    The company may not have the revenues they have stated nor, probably, the non cash assets they have been reporting. We just don't now how badly they misstated. Bad enough for the CFO to resign but probably not so bad that the EV drops too much lower. It was worth $34M before the accounting crises.

    This is why one must own a minimum of 6 to eight stocks, if you are going to invest in micro caps. You can get blindsided by one and you have others to fall back on. There are always opportunities to come back .


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