Finance theory states that dividends don't matter, that investors should be indifferent between a dividend, a share repurchase or a capital investment in a new asset that will earn a rate of return that meets the investor's requirements. For that matter, they should be indifferent between paying a dividend or paying off debt. As an example, Berkshire Hathaway has never paid a dividend. But always keep in mind one of those famous Benjamin Franklin sayings: Everything in moderation.
Well, if you listen to the 15Q1 conference call or read the transcript you know they guided down pretty badly for the quarter that will be reported.
If they give bad guidance on the 15Q2 call for 15Q3, then this kind of price level is what we might expect.
Also, there has been a short seller hedge fund involved here. They put some bearish posts up on the Seeking Alpha web site. Not sure if they are still available for free or if they got moved behind a paywall.
So, when you have a very small company, this is the kind of volatility you can get.
here's the maker/breaker: If the digital signage market is still growing rapidly and they are at least maintaining their market share, then the stock seems to cheap.
For what it's worth, B. Riley and Lake Street expect a "breakeven" quarter, Needham is looking for a penny per share, and the fourth analyst also is at breakeven. Guidance is shown on my Bloomberg as "breakeven."
It would be nice to see some insider buying here, but they are locked out by the blackout period until after the earnings report, when we will see option/share grants at that day's market closing price.
A reserve can only be taken if management believes a loss is "probable." if a loss is not "probable" (based on management's judgement, then a reserve (which reduces tax liability) is not only not warranted, but could be construed as a form of tax fraud.
Given the failure of the trial court to apply the evidence to the law in the case, management is probably right, despite the fact that betting on an appeals court to overturn a trial court is often a fool's errand.
Indeed, the company's rationale on the conference call for winning the appeal, as enunciated by the new General Counsel, was pathetic. The new general counsel apparently believes that the appeal court will overturn the trial court based on "facts." The reality is that the trial court is the determiner of facts, and appeals courts overturn only if the trial court erred in matters of application of the law.
You should have sold a long time ago if that is representative of your viewpoint and reasoning capabilities.
Yes, when the earnings come out on 8/6 they have promised to announce the company's dividend policy.
Isn't he the guy that was short for months and spammed the board regularly about how #$%$ TRN was, then he flipped to bulllish and started spamming the board about how great it was? Now he's out?
Very useful stuff.....
So, how are they impact by oil and gas prices?
If the price of a commodity goes down, what happens to demand? Does it go down or up?
Will we really be needing to move LESS oil and gas around in the future?
Also, they spent years with no dividend increase then started increasing it because....they were going to have to cut it?
The new CEO is wisely changing the company's name and ticker symbol and moving trading to the NYSE.
Only the latter seems questionable.
Thanks for the nice response.
I should caveat my prior post as saying that those numbers are for illustrative purposes only. I would need to do quite a bit more work on those assumptions in order to come up with an actual valuation estimate. Probably,
The capitalization rate of 10% is what I refer to as the FCF Yield, with FCF being formally defined as the Cash From Operations less the Capital Spending. I do not equate it to a "Weighted Average Cost of Capital" in the formal, academic sense of that "metric."
One would have to make an assumption about a company's cost of borrowing and its sustainable Debt/Total capital ratio in order to derive a WACC from its current equity market valuation.
Unless I am mistaken, with a company able to borrow at say, 5% for long-term debt, and having a sustainable 50% debt/total capital ratio, the WAC of Equity Capital would be a direct function of the investor's required FCF Yield.