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Stonepath Group Inc. Message Board

  • stopdemadness2003 stopdemadness2003 Apr 21, 2004 6:08 PM Flag


    the problem with buying stocks like this that trade relatively low volume at relatively low pps, is that you get days like this where you get whacked for 10% and nervous nancy's start asking all kinds of questions.
    if you take the time to look closer, there is so little real short interest in the stock its hilarious that anyone would even mention it. i'm not sure the shorts could cause a trap here if there was 10X the short interest in play right now.
    as for the company, for now, no news is good news. they've just built a $250-$300M run-rate overnight by gobbling up a pile of companies. if you are an investor - you should be ecstatic that they're taking the time to get the integration of these businesses right. i don't want to own a company thats announcing a new deal every second day of the week. acquisitions are tough at the best of times...... roll-ups are extremely difficult!!!
    these guys are doing a good job of merging and streamlining the business base. it takes a bit of time, so hold your stock, sit back and relax.
    if you care to, read the report and see that it keeps all previous guidance in-line, and at the end of the day, we have a very healthy company, growing at a very respectable clip, generating real profits, and generating returns (using virtually any metric you chose) at-or-near the top 10% of the non asset based 3pl industry.
    so what happened today? nothing. same company. same growth story. and you still have a big chunk of your investment riding on pelino. so far - thats been a pretty good bet. buy stock at under $4.00 and 12-24 months out, you'll look back on a day like today and just laugh at the weak sisters and day traders that went hopelessly looking for the next get-rich-quick play.
    good luck folks.

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    • Have you read the 10K in detail. They have 50+ million shares fully diluted and earnout "debt" of $45 million payable over the next 4 years, that is off balance sheet financing. They don't get to use the cash flow for the next 4 years--it all gets paid out--at least most of it. The market value at 3.5/shr is 220 Milllion. Divide the EBITDA estimates into that and see what the multiple is. Something like 16 times EBITDA for acquired growth--on this years estimates. They will just keep having stock offerings and dilute you out. They have a $50 million shelf registration to piddle out every time the stock gets up there--so you are topped out--that is another 15-20 million shares. They may be able to use the earnings in '08 but that is a long wait. The EBITDA per share estimate of .28/shr is dubious as this is not net to the company it is before earnout payments which consumes most of it. This type of creative accounting should be policed by FASB as it does not really show the true financial condition of a company. Yes they are building a company but don't get too excited as the multiple will come back down to earth and combined with the dilution--the return will be mediocre by my estimates. I'm out and I have been there since .50/shr. Good luck.

      • 3 Replies to analyst112
      • In your analysis, you use 10 PE for a company with much higher rev. growth. Why????

      • The 10-k has been out for how long ??? ...... and now you take issue with it ??? You might need to check the SECs' website to get more timely data.

        Unloading your position and then talking smack about the company fits part of your Yahoo ID ..... "Analyst".

        Thats what analysts do best. Talk good about something they already bought or talk smack about something they already sold.

        No balls. Your post is nothing more than a means to help justify your sale.

        This is a company in growth mode. Diluton is part of the game. Take your profits and move on.

        back to lurking.

      • the earnout debt is not automatic.... in each case there are hurdles and IF all hurdles are met (not that ALL will be met), the eps number goes up substantially. so your comment that none of the free cash is usable is not correct. as for the shelf and the dilution - why would you care, if they keep with accretive acquisitions that drive eps higher-yet. imho, the share price increase will outstrip the dillutive effect of new stock so either way - you're better off.
        i am curious though why you - and others - that are "out of here" still hang around message boards where you don't own stock? seems a bit of an odd way to spend your