Analysts are going to have to take up next years estimates soon. Fuel costs may be less than this year. Cost synergies continue to come in. And the revenue looks to be at least flat.
Looks like a solid 2xPE will be in the cards soon. Unbelievable.
They sell many many goods in USD. Much of that content is also USD. Therefore it makes them less competitive. If you disagree, then I guess there is nothing I can do. But its basic math. If they price and source in foreign currencies no effect, but that is not the case.
Also, there is a massive EPS impact. Profits overseas are not worth as much. This is also a fact.
Converting any of those currencies into USD is a problem for earnings but also not all of their products are based in local currency especially food service.
The new activist investor owns less than 10% of the company. He is a canary in the coal mine.
Management during several conference calls has stated their desire to complete a transaction. Go back and check Q3 and Q4 2014 and Q1 2015.
Even if they don't, take a look at convertible debt they issued. Not only is it the most costly of debt that they poorly negotiated, but they most likely did not even need to issue it. So even if they don't do a deal, there is a high likelihood they will find a way to harm and dilute shareholders. There is no end to ways this mgmt. team has bungled things historically.
$20 bucks, the Q4 CC has them issuing blow out numbers with the stock then checking up 10% by close of business. Either a corrected press release, poor explanation of results, non-recurring items not properly highlighted, or poor forecast would be my guess. Again, plenty of examples to pull from.
That's just sheer lunacy.
First, mgmt. will screw something up in the next couple of years. Count on it. More diluting of shareholders via new equity or costly acquisitions. Book it.
Two, there is nothing at all in this mgmts. track record to suggest they can do anything of the sort. Throw enough #$%$ against the wall and I guess something will stick but that is simply na�ve.
How do the converts continue to push the stock lower? They aren't. There are a lot of companies with convertible notes that don't trade at 3x EBITDA. My goodness, you have been saying this for months but you are simply wrong.
Explain it to us all.
People bought the converts and then did a massive amount of shorting to lock in the risk free rate. They aren't continuing to short the stock everyday. There are a 6m shares shorted due to the notes. That happened once. It doesn't happen each and everyday.
Please enlighten us all, you B&B apologist. .
I know I am beating a dead horse. But this stock will not move until mgmt. departs. Simple as that. Until they depart, I no longer believe this stock can move forward. Sales are strong, earnings, are compelling, valuation is absurd, and still it doesn't move. That only leaves one variable MGMT.
You know they are going to try and do another acquisition and they will decimate the stock. I sold my shares this morning. I will be looking to short on any run up to $8.
I will gladly get back in if mgmt. is terminated.
Someone justify the Mr. Skala scenario. For a board member to have his firm collecting millions of dollars and then claim to be exercising fiduciary responsibilities while approving their pay packages and allowing them to remain in power despite their track record - just shameful. Very shameful for all involved.
A few things:
1) Despite all these positive things you cite in your prior post, we still trade at 3.7x EBITDA. What does that tell you? All wonderful things and the stock still is in the dumpster.
2) I have called at least 8 former large investors and asked them why they sold. I have also contacted numerous large activist shareholders to encourage them to take a position. The feedback I get is mgmt. is incompetent and they wouldn't touch this stock.
3) Saying the company has performed nicely over the last 8 mos (which is highly debatable) out of more than 10 yrs of performance is just naïve. The fact is since B&B came into power this stock is down. Mattel and Hasbro are way up. You have to look at the totality of their reign. They have failed. That is an objective fact. Forget about stock performance, the stock trades at 3x EBITDA - are you kidding me? That's like buying a new Ferrari for $25k. Cmon.
4) Finally, the only reason this stock even moved from $6 to $7 is Oasis. Not B&B.
If you wish to defend B&B I wish you luck.
I will be shorting JAKK this week. $4-5 is coming. I just cant understand how 2 men who have destroyed so much value continue to make millions off of shareholders. It is a real shame given the potential of this firm.
Not sure how you can say that when a year ago we were at $5.80. Nothing has changed.
Plus, if they buy something - which they have stated they are inclined to do - by definition it will be dilutive. We will have to pay 6-8x EBITDA but those earnings will only be worth 3.5x when they move to JAKK. (which begs the question why don't we sell ourselves!!!!)
The stock needs demand to go up. The investment community for multiple years now has said they detest B&B. Call some of them. I have. And they all say the same thing, current mgmt. is over their heads. I have also heard several say they will not coinvest with Dr. Pat since he is an unknown quantity. This stock will not see $9 with B&B on board in 2016. Take it to the bank.
If you are Fidelity or someone of that ilk, would you want Murray Skala representing your interests? His law firm is making more money off of JAKK than any investors are. So how can a money manager give his clients money to JAKK mgmt. and the BOD? You cant.
There really is no way this spin will happen. Even the analysts seem surprised this was still happenening.
Crane needs a light at the end of the tunnel before they can go levering themselves up. And if you put all the debt on Enodis, its highly unattractive too. Not too mention your adding a massive amount of costs to make both stand alone.
I think the stock may actually go up.
If we don't get a new mgmt. team, sale, or massive buyback then we go to $6 in Feb after announcing a good Q4 but Bennett f's up the call and leads everyone to think 2016 will be poor (when in fact if you trade at 3-4x EBITDA, a positive EBITDA forecast at all should be enough). .
Wild card is if they announce an acquisition in which case $4-5/share is possible.
I am now actually talking myself into shorting this stock. I need the weekend to think it over.
Crane business in the US isn't the issue. Crane business overseas is the problem. If commodity pricing remains challenged, people will not buy cranes. Survival of the fittest and if you put that much debt on this business stand along, then they will have problems surviving.
I certainly hope you are right. And yes I can hope we get a new CEO soon, but having Berman as Chairman is no solice. And that would probably mean Bennett remains as well. I am not sure which is worse.
Its encouraging that Oasis will have a Board seat as well. But we also still have the rest of the Junior Varsity squad on the Board. I saw on another forum that our director Mr. Skala's law firm is making millions off of JAKK. No wonder B&B get their pay packages approved each year, they have Board members making $$$$'s off of these guys staying in charge.
It just isn't this hard. Have some good conference calls. Don't overpay for assets. Always listen to potential buyout opportunities whether you like it or not. Be opportunistic with buybacks. Don't dilute shareholders unless you are looking down the barrel of a gun. Be transparent. Don't have conflict of interests. Focus on shareholder value maximizing strategies. Don't screw up press releases.
These guys tomorrow could say we are going to explore strategic alternatives to help increase shareholder value. This wouldn't obligate them to do anything but at least we would know they would see what other buyers would value JAKK at. And if no one wants this for $10+ then continue on as is. Or borrow some more money and keep buying back shares. Do something.
But if someone said hey Ill pay 6x EBITDA for this business which is $11.75 share and far less since there are at least $10-20m in synergies if they went private or went to a competitor, then you do it. This will not see $11.75 anytime soon on its own.
This stock now cannot go over 4x EBITDA until there is a change in leadership. So why fight it - it is painfully obvious. Nothing to relax about until change occurs.
Note holders get an extra 10% in bonus shares in the event of a buyout. Another wonderful gift from B&B. Even despite this fact, we are woefully undervalued - but if you have a CEO/CFO tandem who have yet to create shareholder value after 10+ years, I guess it is to be expected.
The stock would be forced to go up if this was the case since all the noteholders have short positions on.
It would be great, but highly unlikely. Why would any of these give up their risk free 4.5% with a call option to boot if they so choose. Makes no sense.
The problem is with B&B and board members like Skala and Poulsen, we're not dealing with a lot of horsepower. These guys will probably overpay for those notes given its not a very efficient market. Anything that requires judgment in the financial markets is very dangerous for the rest of us. They have yet to underpay for anything since they have been at JAKK. They would bungle this as well.
Just buy back the common and move on. Whats done is done.
Also, check McDonalds, Chipotle, Sonic, Shake Shack, Popeyes, Yum, Burger King, Starbucks, Darden, etc.
You might want to check some data before you post.
Why would either man invest in a company they cannot get control of? With Advent owning 72% of company, there is no change they can cause.
And frankly, what change would you advocate? Company is kicking butt.
Can you name any restaurant stocks that trade for a PE below this?
PE is a function of growth. If you are growing at 20% plus then you should have a PE north of 20 too.