Until I read the entire cc talk by Roni A I hadn't recognized the true significance of something, and that something is Guidewre.
Here is just one of the statements he made referring to them GWRE:
"So right now we see positive momentum, almost every deal we are competing with Guidewire. But we already announced the deal and we hope to see a few more deals in this year. So, we don’t see any more new competitors but Guidewire is a market leader today but we in terms of the product, we position ourselves"
Take a look at GWRE it is selling at a 200 pe to this year and a 76 pe to next year. And they made 7 cents in the last Q against a loss from last year. SPNS made 9 cents last Q and will probably do 40 cents for the year A 50 pe on 40 is $20 pps price and who knows where next year.
Knowing GB I can't possibly think that $10 will be the top and I don't see with the potential here any sale unless the price is much higher and then perhaps GWRE wants in and why shouldn't they?
It means that in June you will have for every one share you won of ROST you will have two. Keep it forever or at least until they finally have stores in Maine. Probably about another 7 years or so. And at the time the stock should be almost three times what it is today.
I have on my watch list. Already own COLB and also watching MNRK both COLB and MNRK look better to me. Primarily because NW and VA/NC are much better growing areas than W MA. Noting more depressing to be than driving through downtown Pittsfield. Do you think Springfield will benefit that much from MGM?
Okay, okay agree all these deals are too soon to see in real $. And I am not a short in fact have over $100k here. I am merely suggesting, just suggesting, that making money is not something they are accustomed too. Best scientists, best salesmen, best any thing are not necessarily the best at getting to the bottom line.
So when do you "Strong Buys" see that happening? Real eps?.
As many cc's as I have listened to and I would say over 50 I have never heard a CFO voluntarily talk about slow payer as he said for $250 and then say they are allowing $2.1 for bad debts. I just don't like the feel of this one I have seen this pic before. All the news is fantastic except they don't know how to make $.
I certainly understand the considerations as this stage of a companies growth. There is also a thing call looking out for shareholders and taking them into consideration when budgeting. What I am attempting to convey is that $2 ml more would have had an impact on the eps and I don't get the feeling, at all, that they took that into consideration, which is a mind set do not like in a company I have so much invested in. Not even to make the estimated 5 cents shows me that. For now, I will stay and see next Q if they know how to make money but if it's the same bs you will see a lot of jumpers. Where are the novices that were predicting 20 this week?.
Where is the good news when it comes to profits? All the figure are up triple digits expect profits, There comes a time when you need to show the money and 3 cents a share ain't doing that. They know how to grow sales but not profits. This would have been a great time to cut back on R & D and SGA and give the eps some strength. Companies that don't know how to make $ are not given a lot of slack.
I have owned ROST ever since I started selling them in '99 and done, to say the least, extremely well with the stock. However, that multiple is really high not too many retailers pe's are in the mid 20's. And I think this idea of lowering inventories even more could come to bite them. There is only so many visits to a store a customer will make and not find merchandise to buy and keep coming back to that same store. They better be very, very careful with that.