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Fuel Systems Solutions, Inc. (FSYS) Message Board

  • juliaadams54 juliaadams54 Dec 17, 2013 3:55 PM Flag

    Buy from Seeking Alpha on yahoo headlines


    It is perplexing that Wall Street's reaction to Fuel System Solutions' (FSYS) third quarter report (one that actually met expectations, both on the top and bottom lines) was so hateful, that it mercilessly stripped 30% of market value away, in a blink of an eye.

    Why was the carnage so brutal? Believe it or not, it was because the company narrowed its full year revenue guidance, to the bottom of its previously stated range of $400 to $420 million. So in effect, a potential reduction of $20 million in revenues, extracted $70 million of market value-pretty preposterous when considering those lost sales, would of generated just $5 million of gross profit. I guess the only explanation for the "sell now, ask questions later" reaction, is the market evidently assumed that the business it is slated to lose from both Volkswagen China and Honda Thailand by year's end, can not be replaced.

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    An ironic twist: Did the market even pay attention to the obscure fact that if it wasn't for an impairment charge of $1.7 million, the company's earnings would have essentially doubled? The charge was attributable to the purchase of the remaining 50% of its India based Rohan BRC joint venture. Evidently the company overpaid when it initially entered into the JV three years ago.

    The conference call: the way it was run, didn't help matters either. The lack of enthusiasm, and robotic delivery, amplified the stock's sell-off. Further weakening the call were the participants very strong Italian accents, which were difficult to understand. The analysts compounded the problem by presenting questions that were off the mark, when it came to the priority of the stock price. Why not ask the obvious? "When are you going to begin a sto

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