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Goldfield Corp. Message Board

  • ddbikessamsara ddbikessamsara May 23, 2013 3:37 PM Flag

    Thoughts for growth

    I don't think anyone will dispute the fact that the electrical grid (along with roads, bridges, water pipes and other infrastructure) is old and seriously needs upgrading/replacing. GV has proven they can do large scale projects and has a seasoned team of people running things. They are moving outside their historical core area with stated intentions of expanding operations into the mid-Atlantic region. It seems the market is definitely there for sustained growth over many years - they just need to capture their share of the bidding.

    I've been thinking about the financing and the huge insider buys last fall. Regarding financing what lender in their right mind would agree to loan money if they did not feel the income would be there to be repaid? They HAVE to have seen business plans, revenue assumptions etc. before they would ever make the loan. The new loans have come even with the CREZ project nearing completion. The lender(s) HAVE to have seen revenue projections to justify the risk, just as the company has to feel comfortable taking the risk. Neither party would have done the deal if they didn't think the business was there to justify the loans. That's just real world business.

    On the insider purchasing (as well as other executives who own stock) - why would they not have sold over $5 if they did not feel a better price would be available later? If they thought it was all grinding to a halt after the CREZ project they undoubtedly would have sold every share they had over $5 but there are no forms filed and no indication at all they have sold a single share.

    This all makes me feel very comfortable taking a position at this price. Most of the downside risk has already materialized and it won't take much to send the stock back into the $4's or better.

    Sentiment: Buy

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    • The real problem. It simply has no following. That will come in time, hopefully in the next 10 months. I see Companies with major negitive PE's that move up with this market. These Companies financially are dog poop as compared to GV.

      Sentiment: Strong Buy

    • I have to agree with that. I'm looking for a nice bounce off of this downturn

    • ddb- Some good points, but here are my concerns. One is that margins went from 31% in the Dec qtr to 22% in the Mar qtr, and well down from the avg margins during 2012. Also last year, revenues outside CREZ were $17M for the 2012 Mar qtr, vs $14M for the for the 2013 Mar qtr. Revenues outside CREZ were pretty much flat from the Dec qtr as well. Personally I was stunned by the huge margin drop and flat sequential quarterly revenues outside CREZ. I understand about all the equipment purchases, and insider buys around $2, but investors need to see growing revenues outside CREZ at the very least.

      • 2 Replies to dalton880
      • tom_carver May 28, 2013 10:26 AM Flag

        If crez is a huge project and they're able to work on that while still doing the same amount of business outside of crez, that tells me they have significally increased their capacity to get work done. That, along with their big investment into new equipment, tells me they're gearing up to take on new and larger projects, while keeping a nice steady workload of smaller projects to keep themselves busy. I'm holding on to my shares of GV, even though there sure are a lot of misinformed panicky people selling lately.

      • dalton- I believe the drop was the result of delays on the CREZ. Obviously GV was planning on working on the CREZ project and did not have other work available when the delays hit. If there were no delays, I believe the quarter would have been a duplicate of the previous one. Revenue and margins would have been roughly the same. If a company is planning on doing a particular project, and then that project is delayed, it is very difficult to scramble to fill in the gap. This affects the bottom line too. The question is....what caused the delays. CREZ revenue has been a little over 11 M per quarter the previous 2 Q's. The CREZ backlog is 15 M and is due to be completed by Aug. I think they were planning on 11 M+ rev from Crez this Q and only put up 8.7M. I see the company as being committed to growth. Statements and actions from the company are signaling this. We just need to see the fruit of their actions in some PR's detailing contracts won to build their backlog. A PR could hit at any time. When/if it does, the stock is primed to pop. If the company fails to land any contracts, then I see GV going lower. Looking at past price action, even 2-4 years ago, GV was trading in the .20 - .50 range when it had no earnings (losses of (.08) and (.01) for 2009 and 2010. It earned .03 in 2011. P/e for 2011 were anywhere from 8-15. If we get the same multiples for even steady .07 - .10 Q's, then we are looking at 2.50' to 7's depending on sentiment. Bottom line....GV just needs to PR some contracts.

    • Excellent post. Great back up data to your assertions. GV will languish at this ridiculous price range for a while. Big money will eventually come back to GV. The market eventually corrects an over sold or over bought situation. In the mean time, the short pirates will continue to play their games within this tight, low price range. Referencing your above logic, this is a very risky game for the shorts. I will have no sympathy for them when they get their heads handed to them.

      Sentiment: Strong Buy

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