Or get burned shorty... LOL!!!! Go CEDC!!
July 25, 2011 /PRNewswire/ -- Central European Distribution Corporation (NASDAQ:CEDC - News) will have its second quarter 2011 earnings conference call on August 4, 2011 at 8:30 a.m., Eastern Time
Central European Distribution
CEDC is a U.S.-based company that produces and distributes liquor in Russia, Hungary and Poland. The stock, once a favorite of small-cap fund managers, has crashed from an April 2010 high near $40 to its current level of about $10. Investors lost faith in CEDC’s management last year after the company repeatedly missed already-reduced earnings guidance and blamed the shortfall on external factors. Higher input prices certainly played a part, but the company’s missteps prompted many fund managers to cut their losses and move on. The stock also came under pressure after Moody’s placed it on watch for a downgrade to its credit rating.
Today, investors remain skittish since CEDC continues to struggle under a massive debt load. Still, there are five key points to consider:
1) CEDC is frequently mentioned as a takeover target for a larger beverage concern, and it seems to be only a matter of time before the stock – with its digestible $737 million market cap – is bought out.
2) Three insiders, all directors, have purchased shares in the past four months.
3) In its most recent earnings release May 4, CEDC reported a profit of 2 cents (versus a loss of 34 cents in the same period a year earlier) on improving sales volumes. Importantly, cash flows are on the rise – allaying some of the fears about the company’s large debt.
4) Valuation: the stock is trading at 8.2x next year’s estimated profit of $1.25, a PEG of 0.6, and it stands at just 0.4 book value.
5) More than 10% of the shares sold short as of June 30, providing the fuel for an eventual rally.
CEDC remains a risky stock to own, and it is exposed to the movements of Eastern European currencies. Still, with fundamentals turning the corner and its valuation at a rock-bottom level, the risk-reward tradeoff in CEDC is very favorable.
Look on the bright side only 2 more weeks of this BS...then we get to watch shorty squirm after the earnings :)
Your not asking the right questions... you have to ask who is paying who to keep this stock down....so that when a buyout offer is presented it looks quite generous to us because of the duration of time the stock has been held at a ridiculous 52 week low.