So one of the smartest financial firms around decides to sell...to me that means this pig is done. High debt level and very cyclical business. Valued at over 10x EBITDA and their savy owners decide to sell - cannot imagine they did this because they thought this stock had a run in it. Sell--
Chip didnt get ripped off. Stock was $39 and he sold it for $43. Stock wouldnt be at $40 now without this deal. Advent and Lulu could care less if Chip feels ripped off.
According to you LULU can push the stock up whenever they want...LOL
One of the dumbest posts in a while.
The price has already been agreed to. It is completely irrelevant what day it closes or what the price is when it closes. Advent paid $42+ when the stock was at $39. So they paid a premium for the stock. You only do this if you are bullish on the stock not to mention it cost them $1b. It is all good.
A 6X EBITDA multiple would equate to a 24% upside - which seems pretty conservative
6 x $43m (Company Guidance) or $258m
Less $90m of Net Debt
Current Valuation is $135m or $33m upside of 24.444%
George Lopez has been selling shares for years. To read anything into this is naive. If you would have sold when he sold, you would missed a great ride.
Improving Gross Margin
Ample Cash and Access to Cash
Orders staying robust despite no PTC
Cheap Valuation 5x EBITDA
Solid sector trends favor growth
Whats not to like?
Clearly some financing activity will occur but that's not new news. Its been priced into the stock for a long long time. this is simply the fact that there is no news to create demand. Shorts rule in such a void.
At an Enterprise Value of $4.9b and about $460m of EBITDA, this seems pretty cheap in a vacuum and especially given its peers multiples. VF is far greater than this.
I agree same store sales need to improve to ever get back to where it was but what if they dont its still a solid $50-55 stock. Brand is powerful - people pay through the nose for this stuff. International growth and growth in male segment alone could be powerful.
They do have a lot of Debt. But they also have a lot of EBITDA. The Term Loan is not due until 2021. They have more than enough time to pay off the Term Loan. Obviously, this all comes down to the Mariano's stores. If they are hit, its a $20+ stock. If they just tread water, its $0.
Dominick's just disappeared and thats a massive hole for everyone else to fill. Yes, Walmart, Costco, Meier and Target are all here. But that is a completely different market. Jewel is actually migrating that way too. Whole foods is also a different market. Instead, you have Mariano's going against Pete's, Treasure Island, Caputos, and Sunset. I like Marianos chances against them.
I dont choose between Target and Mariano's. And I dont think many people do.
How on earth can you say there is a risk for a secondary? They have a $20m untapped line.They also will be EBITDA positive this year. Why would they sell equity as opposed to tap their bank for $20m.
Your ignorance is overwhelming.
How is their balance sheet weak with no debt currently? Their balance sheet is fantastic.
The cost of these lines is already known and is far less than the cost of equity. The cost of equity is about 14-16%.
Whoa. Glad everyone here gets to witness your ignorance firsthand. I guess this is your shtick though. Go around to message boards and talk about secondary offerings.
I am not debating their margins or the quality of the company.
I am taking issue with you spewing nonsense about a secondary offering causing dilution. That was a very ignorant comment. Agreed?
You have to admit companies with untapped lines of credit typically do not go out and sell equity.
Humor us, admit you were wrong.
They also have $30m+ of inventory. They buy the inventory thus creating the payable. It then takes time to turn the inventory into a receivable. Given their backlog and the long lead time to make a tower, this makes intuitive sense.
But forget that. Lets examine your point. So, you are faulting the company for paying vendors in say 45-60 days but getting paid by their customers in 30 days? This is called excellent working capital mgmt. Every CFO strives for negative working capital.
Furthermore, you still fail to acknowledge they have $20M of untapped credit lines.
Wake up. If they didnt have a massive backlog, I may entertain your argument, but this is preposterous.
Rubbish. Please tell me you have something more than this you shorter. They have $11m in cash and $20m in bank capacity. They dont need $31m in cash anytime soon. Dream on, buddy.