come early-to-mid November, if institutional holders don't move quickly. The tax loss selling season coincides w/PRCP's reporting of its normally seasonally weakest Fiscal Q1, and it is often a loss for the quarter. Look at the margins. They do not make a profit. They are giving away business to stay alive. No wonder they win contracts. I'd buy from the guy offering 29% gross margins instead of the guys doing 55%-78% gross margins (FARO and CGNX).
It's tough being tied to the commodity cycle. It's tough playing small cap home run type stocks. Look at a company like VZ instead, from $38 to $55 and still paying a Divvy over 4%. No one turns off the taps on VZ, unless everyone stops using their phone for text, call and data.
Never seen that before, by any company. Geezus, six weeks from now they will have to announce it again because everyone will have forgotten about it. Maybe they just wanted to assure everyone they will still be around in two months, they will report the quarter as per usual, they will not be pushed around, nobody is going to take control of the company or their entrenched positions and they wanted to make that perfectly clear. Of course that would be just about the worst outcome for shareholders. These are the last guys you want driving the bus. The technology has always been great. The management infrastructure (or lack thereof) and Board oversight has been at the other end of the continuum. What's the gross margin on the new business awarded? Orders mean little unless you know the profit embedded in them.
The time for "constructive" discussion is over. It has been at least four months since Moab acquired its initial stake. Stop diddling around. The Reporting Persons need to get on w/the coup. Marz and the BOD will never cede control. Just go about the business of removing them before more shareholder value is lost.
To be fair, the other legitimate take on all this is that the reporting persons have pretty much "scrubbed" all the alternatives available w/other shareholders, competitor companies, industry analysts, investor professionals and......nothing has come of it. No one is stepping up to take out the company. Now, of course, it would be formally up to the Board of Directors to decide to explore strategic alternatives and we have no announcement of that, only that discussions w/the reporting persons have been constructive. If they could really sell the company, why wouldn't they just do it, or at least announce they are exploring various alternatives to enhance shareholder value. The sentiment remains that executive management and the BOD may have to be dragged "kicking and screaming" into an alternative solution that enhances value for its shareholder owners. The pressure to do so has definitely been turned up a notch, but after two decades of fumbling the ball on the goal line time after time we'll have to just wait and see.
It is run like a private entity. Shareholders are irrelevant to them. Mr. Friedman is irrelevant to them. Fiduciary obligation is a curious theoretical construct to those overseeing this company not a practical consideration.
Nice catch wiseinvest. That's good news. But as I recall, when Moab first disclosed their initial stake some months ago, they also at that time had thought they had struck a constructive tone w/Mr. Marz. What is different now as some more time has passed could be three things: 1. The market, as evidenced by the stock price, has shown an utter disregard and lack of faith in the new CEO and Chairman 2. Relatedly, the CEO/Chairman and BOD's personal stock holdings and option values have all progressed on a glide path toward oblivion and 3. Two activists are now involved and they have also talked to other shareholders, industry analysts, competitors and investment professionals. All that said, it may be time that Mr. Marz will finally give up his "death grip" (w/multiple meanings intended) on the company and will acquiesce to the best interest of all shareholder owners. That is a completely rational and high probability interpretation of what is occurring, though no certainty that reason will prevail. This should have occurred two years ago, but we are where we are and I'll take it.
And again I ask, what are they waiting for? Why have they not replaced the CEO and BOD after nearly two decades of undermanagement? Surely they have enough of a stake to stage a coup. Surely most other retail investors would follow their lead if only they would put forth an alternative slate. How many CEOs. CFOs, COOs, CTOs, Controllers have left in just the last couple years? That pretty much tells the story here. Look up the definition of the word "entropy" in the dictionary--you will find the word Perceptron next to it.
I thought it was mostly a teeth thing w/the Brits, but have you seen Boris Johnson's hair? Dude is still in a 1965 "Rubber Soul" time warp. Can't wait to see him get hung up on a zip line again. Olympics are right around the corner.
I'm glad too. Gonna buy me a nice little cottage/guest house in Scotland real cheap over the next 12-24 months to spend a chunk of my retirement time there. Probably on Isle of Skye when the Pound drops to under $1.00 U.S. and the housing market crashes. Would love to buy in Iona, but nothin ever becomes available there.
just love them. Going to begin to see portfolio managers shift asset mix in this direction in a big way. Small U.S. based companies w/100% of sales derived from the U.S. Globalization, geographic diversification simply spell RISK--in all caps--foreign currency translation risk, geopolitical risk, revenue risk, margin risk, default risk. Just give me good ol' Billy-Bob or Billy-Ray spreading asphalt from 7:00 A.M. to 4:00 P.M. on the highways across the good ol' U.S.A.
You might want to own this at these levels w/the WilPhoneix going back to work. But it begs the question: when was the last time Greenspan was right about anything? And wasn't he the guy who got this whole mess started nearly a decade ago for which we still have to "pay the piper"? OK, that's two questions, sorry.
PRCP still faces: unresolved litigation, a long deteriorating Chinese economy, the multi-year overhanging VW mess and associated reduction in cap exp,, the U.S. Auto Cycle having peaked, Latin America diving lower still, Europe well below trend line growth at the macro level with or without Brexit and despite negative rates, and the U.S. below historic trend line as well. Japan has been in a decades long recession/depression. Still, if you hold the $1.5 million of debt mentioned in the last CC and it happens to be secured by company assets---those assets gotta be worth at least $10 million despite all the headwinds, lack of management infrastructure and lack of a coherent business plan as a standalone. That's a nice multiplier return if this company takes a digger, potentially much better than the return for equity holders. Of course you want to be first in line w/the debt as there is possibly more debt yet to come.
The market is putting Enterprise Value (giving the company the benefit of its estimated net cash position) for PRCP at a little above $30 million. No one is stepping up to buy it. What is a company worth that cannot make a profit despite market leading technology and an historic Auto Upcycle? Someone could buy it and end up singing that old song from Porgy & Bess: "I got plenty o' nuttin". Great technology. Can't make money. Look at the track record.
Walter Brown Pistor and the former CEO could all potentially lose their entire investment in the company due to "benign neglect". Everyone seems to be sitting on their hands doing their best impression of Alfred E. Neuman---"What Me Worry?" (for all you Mad Magazine mavens out there). Less than $2 per share left to lose, but even that amount is "phantom money" if they tried to exit in the public market. The stock could quickly trade far below that level. They could take this whole deal private for less than $10 million, but apparently no one has even that amount of cash available or could not borrow that much in a buyout. That kinda tells you we are dealing w/small time "players". The total company is worth less than a moderate priced home in the Hamptons. Average daily trading volume is a little over 1,000 shares per day, and yet they still absorb all the attendant costs of remaining public despite being an irrelevant entity to almost all investors. None of it makes sense, except to the insiders and management who still get paid year after year.
For all practical purposes, one cannot exit any significant volume of stock in the public market. The stock is near worthless for the largest holders. Insiders are still being paid however. For insiders it's like an annuity as long as they remain debt-free w/ a small cash balance. Nice gig, getting paid for running in place.