Aside from your humorous handle, I must say I feel your pain.
This has been a poorly-managed company for many, many years, and it has
finally started to attempt to move beyond management by egghead founder.
So far, the results have been unsuccessful, though showing period signs
I think the lawsuit is really holding them back at this point.
I must say, though, that you are wrong about it being "as bad as it can get." it is not.
The company is essentially debt free. As a result, it has the ability to be resilient through
hard times. Companies with debt that hit hard times often fail or have equity investors
diluted out of their ownership.
I don't know what your time horizon is, but in two years this could be a much better story;
How, you ask?
1) The pond capacity expansions actually result in increased production
2) The installatino of new machinery (taking forever) is up and running and has cut costs alot.
3) the lawsuit is over and the result was not very damaging
4) management finally decides to stop throwing money down a rat hole (on "branding")
and decides that they will simply earn really good margins selling the premier "organic"
"natural" astaxanthin into the bulk market.
Revenue in a couple of years us up to nearly $40 million, and rising 10-14% annually; they are making a 12.5% net profit margin after tax, or about $5 million. On 6.5 million shares, they've just earned about 75 cents a share, and the analysts are looking for $1.00 a share two years in the future.
With a growing, profitable business, the stock is trading at 14x next year's estiamte of 85-90 cents, or about between $12 and $13.
Will it happen? Maybe.
Could it happen? Sure.
Alot of things would have to break right.
So, do not despair. There will come a time when the shares get too cheap.
Could now be that time? Maybe.
Unfortunately, the lawsuit may cause great distress, management may continue to chase branded windmill, and new competitors may develop
This post identifies you as devoid of any market knowledge.
And I'm a "long/bull" on HLF.
So, does anyone think that all of these firings have anything to do with the fact that the Board recently cancelled the "consulting" contract that Cohen's entity Madison had with the company?
Wasn't that consulting contract, in fact, simply a backdoor, quasi-legal way for the company to pay dividends on the Class B shares and not on the Class A shares?
Can anyone say what, exactly, Madison was being paid to do?
It appears that the company currently is down to only 3 board members. This is the
smallest number of board members I have ever seen for a public company.
Obviously, new board members will be named, but who, exactly, is responsible for
They already told us that earnings in 14Q2 were going to be bad.
There could be additional negative trend developing.
Not sure who would give their shares away below $10, but that's the reason I have been selling the August $10 puts at fat levels.
Well, this board died after the little flurry after the last drop.
I had sold some $15 puts in the days after te big drop in late June.
They were July's and the vols were pumped.
They all expired worthless.
Im wondering if selling the Augies for 30 cents is a good deal.
2% of the strike is nice, but any significant market sell-off is going to put them in the money.
The bounce here in a strong market since the sell-off has not been reciprocated in these shares.
know anything about a company SYNT featured in Barron's this past weekend?
After taking a look at it a bit, it seems to me that alot of people that invest in ATRI
would find the financial profile, growth, and margins very familiar.
Of course, it is a very, very different company.
Barron's wrote this weekend about OPLK having activist investors after it
because management is diverting lots of cash and cash flow to a business
that they think the company cannot develop the distribution for.
Thinks if the company gives up on this endeavor and salvages cash from a
sale of it the company could be worth quite a bit more. Kind of a classic
small-cap activist story.
Any intelligent life here?
Your SYNT was featured in Vito Raccanelli's "The Trader" column in Barron's this weekend.
The stock sounds pretty cheap considering its record of (and current, judging by the recent quarter) growth rate and the cash position.
Why are SG&A expenses rising so rapidly?
Why are gross margins down?
Very impressive net income margins.
~$150 million in debt to $700 million in cash?
Its nice to see those votes of confidence in a poster here (or really on any yahoo board).
of course, when it is said that they are debt free, you are referring to funded, on balance sheet debt.
As a retailer, they own little to none of the real estate in which stores are located, and they instead have many long-term store leases. The rating agencies essentially convert those rent payments into a "debt adjustment."
Even so, you are technically correct that they are "debt free" and I agree that the balance sheet is in fine shape.
The FCF is strong, the equity market value relative to FCF provides an attractive "FCF yield" and it is exactly the type of situation that a HF would probably like to get involved in.
The company's credit rating remains solidly investment grade at the rating agencies.
The company generates significant free cash flow even after dividends and is using that money to reduce debt further.
Perhaps you can also explain why you think the private label business is so different (and apparently more difficult to navigate) than the branded product business?
Maybe one of you guys can explain to a (relative) newbie what exactly is going on here with Madison and the Class A shares. Frankly, I can't remember ever seeing such a screwed up governance set-up.
I mean, I new there was weird stuff pretty soon after I started looking at this name, but I really don;t understand it.
Welcome back to the 13s.
It may not last long for now (we've had a nice run the last few weeks);
heck, it might not last until Noon!
But we will be above $13 in a few months more or less permanently,
This type of income will not be valued at this yield level forever.