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WEX Inc. Message Board

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  • red_wombat80 red_wombat80 May 4, 2007 8:14 AM Flag

    Its going DOWN !

    I don't think the loss was HUGELY unexpected, although I had harbored some hopes that the last quarter would have been the bottom. They have still done an admirable job of diversifying their customer base and maintaining, even growing revenue. They are making investments in the future and we will only know the results of those efforts 1 to 3 years down the road. That said, I see no compelling reasons to buy more at this point as it is unlikely that there will be any positive news coming out shortly. In my view, based on the tone of the cc, I suspect they will likely have another loss in the next quarter or at best a marginal profit.

    We'll see. I'll likely still be holding shares in a year or two. I hope they are worth more at that point than a tax write-off.

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    • Seems they made some effort to get all the bad stuff in the last quarter -- increasing reserves for inventory obsolescence when earnings would not have been stellar anyway. I was surprised to hear (probably I had forgotten) how little of their revenue comes from proprietary products. Contract manufacturing doesn't seem like the business of the future, so I hope the proprietary stuff continues to grow faster.

      • 1 Reply to ericvann2000
      • WEX has been around long enough that it will work it's way through this transtion period, but after listening to the CC yesterday I sold my position. The CEO acknowledged the problems they are wrestling with, which included having to layoff folks because, among other things, customer orders shifting around. He did not offer any timeline for returing to profitability and provided no significant insight about improving margins.

        Unfortunately, there were enough unknowns that I question how long this turn-around is going to take. I suspect The stock price will neither not drop much below the $3 range or move up much past this point either, also known as securities stagflation.

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