Did you get a chance to hear the replay of the C.C. call? I just did and have come to the conclusion that the run up to $7 was a pump and dump to let the insiders unload a bunch of shares. Northeastern U.S. production? We were led to believe that it would be up and running by now. Fact is they don't even have a partner picked out yet. Ralph claims its because they can't find a partner who will protect the formula for TrueBlue. I ain't buying that arguement, any good lab can tell you exactly whats in it. Closing a leased plant sounds good but they'll be expenses in doing that also. Ralph knows the stock option expense is out of wack for a company this size and he said they'll trying to work out a new incentive that is something other then stock based compensation. Good luck doing that, employees have had a taste of it and will want more. He was also questioned as to why one of the directors was dumping large amounts of shares onto the market and was he done doing so? Ralph replied he thought it was over with, the caller said he hoped that was true. I guess the current game plan calls for running out of one plant, placing the chips on the house brands and praying one of the majors (Kroger or Wal-Mart) becomes a customer.They promised a press release if and when it happens. I'll go along with that but the share price is going to take a real beating in the meantime. I'm holding 18,000 shares and at this point will "let'em ride" till the end of '07. I'd like to attend the Spring shareholders meeting, are you planning on going?
With oils recent drop and capacity not being an issue, I have to question the need for an eastern plant.
While many insiders did sell into the rise, Ralph bought 80,000 shares last time the stock was at this level. Admitally, this quarter dissappointed me greatly but I cant help but to think my same case arguement still holds true. Ralph has been somewhat shareholder kind but his interest has clearly been with his board and employees first.
True Blue is growing nicely and the price to sales ratio on this company is ridiculously low to peers. Its always been cheap to peers but one has to expect at least $50M in gross revenue for this year (we are at 40.5 right now after 3 quarters)
That means True Blue is a faster growing product than Monster (growing aroudn 60% yoy and slowing), Jones, or any product that a major beverage company has out at the moment.
We cant even get 1x gross revenue despite having a product growing at 100%+ that is now in 14,000 chain stores and likely going to grow to 20,000+ by the end of year. I fully expect them to get into one of the big two.
Lets face it, if sales continue to grow at this pace and they do get into the green, the company should be worth 2x sales. We're still growing at a clip faster than Jones and thats with losing a bunch of co-pack revenue, ect.
I think we'll consoldate in the low $3's, perhaps see as low at $2.70 but likewise, this stock tends to do well in the summer. There is a reason in 4 outta 5 years it hits a high in July and I suspect we'll see a high in July again. Right now we need some positive momentum, a big signing will give it to us. That is the key for McRae and where he will be judged.