Makes no sense. Just goes to show, nobody understands this company. Until there is more clarity on the valuation of this company, who is going to invest in something where the numbers just don't add up? I don't think investors understand this company, and with Smith being so secretive about what is going on, I doubt that helps to provide any clarity about the future. Unknown = Risk. Sure, they might have some decent assets on the balance sheet, but so far they have only shown that to convert these assets into money making opportunities, it is costing them a lot to do so. Increasing revenues have only resulted in decreasing profits. Not a good combination.
Smith is, and always has been, an NBV and asset accreter (sorry, new word - don't know how to spell it.). He takes troubled, mismanaged assets and fixes them - most of the time. He also looks for sea changes in commodity prices and buys into the commodity at price bottoms (Compton, Pea Ridge).
Financial results in such a business are inherently unpredictable. It's just a series of one-off deals, so what's the next one look like? Nothing would surprise long-time investors. Add in tax loss carry-forwards, and earnings are hidden behind "tax efficiences". Analysts hate the unpredictability and few, like Tanaka Capital, will stay with them. Therefore, historically, the stock has usually languished at or below NBV. P/E's have little to do with this company. Ditto for "clarity".
I was actually pretty upbeat after the last conference call. They've got some potentially juicy assets and they seem to recognize that sitting on your hands is not going to monetize what they have. Whatever. When you invest in this company, you have to think longer term and recognize the business for what it is. Sooner or later, the stock price will reflect the book value. For me, we're in a buying zone now. I'm hoping for 12-15 in a few years, emphasis on "hope".
I was pretty upbeat as well. They appear to have a handle on what needs to be done to derive synergy from operations and reduce costs. That was not apparent on the previous call.
Managing such geopolitically diverse assets is difficult even for the best companies, for a smaller company like this it's a major challenge, but one that they seem to have a better handle on now.
Agreed, you will never get forward looking clarity (sometimes hard to even understand previous results without a lot of head scratching).
I am looking to get back to 10 sometime soon (by Q1 2014 would be nice!).
$12 is not out of the question, but I think $15 will require a lot of time or a major catalyst.
Too bad they really don't cater to a few more analysts though.
I just don't see that dynamic changing at all.
They want access to public capital, but they obviously chafe under the public reporting rules and want to run it like a private operation. And this is the end result.