Sold my position today. The goodwill write off didn't concern me as much as the reserve increase of $12 million along with the 400 basis point rise in delinquencies. Something has happened to lower income Americans. Look at the other subprime lenders such as CONN and CRMT. All have suffered large increases in bad loans.
Just wondering humane how you get to $62-66 million in the fourth quarter. They mentioned $10 million in new business in 2015, $2.5 million a quarter and are at $55 million now.
I like the cost cutting and trend in earnings before forex.
Revenues were up a little but they really cut back on expenses. Expenses are still up from last year but down from last quarter. They announced two smaller new deals. Looks like they are back on solid footing. However the big cut back in expenses indicates a little less optimism from management.
I liked the big increase in revenues and earnings. Mixed feelings on the stock buy back. On the one hand it indicates confidence by management that things will continue to improve. But it takes away part of the security blanket. All that cash and investments served as a floor for the stock. That floor will now be a little lower.
He and the CEO put MEA into a death spiral by agreeing to unlimited shares to the debt holders based on stock price. The more the stock drops the more shares they get and the more diluted we get.
By my calculation, the increased margin on the 20% increase in sales adds $5 million to earnings quarterly assuming no increase in SG&A. That gets HTCH to cash flow positive after adding back depreciation.
HTCH preannounced better than expected sales and a resolution to its putable debt. The only slightly negative was they only expect sales this quarter to increase moderately. Two pieces of good news should have driven the stock up more than this.
Don't you realize that every time you change your ID the rest of us put you on ignore like I am doing now?
I decided to hold with the stock trading in the 8s. I don't expect a 4 handle. Book value is over $9 and tangible book after the acquisition is probably around $7. That should act as a floor. Management needs to rebuild credibility. I still might bail if we get back in the 9s.
ANGI just announced significant new jobs at its Indianapolis HQ. At first blush this appears to be a negative, ANGI needs to cut sales and marketing costs. A closer look shows that this is in response to local government incentives. The jobs don't start until next year and are added gradually over several years. Probably nothing more than ANGI was already planning. The only difference is they will now add the jobs in Indy instead of elsewhere.
Lawsuits rarely succeed. But you hit on why ANGI is valuable. It's all those contractors paying hundreds of millions to advertise on the website. A big and growing list.
The shorts have been right about ANGI until now. But what they are missing is the value that has been created which is masked by the excessive advertising. There are several ways to unlock this value and ANGI has to be motivated at this point to do so.
Perhaps you didn't realize that ANGI pays out 85% of its revenues in sales and marketing expenses! more than any company I know. Yelp the most direct competitor pays out 60% and is profitable. ANGI just needs to go to Yelp's model and cut its excessive sales and marketing expenses. It will be instantly profitable.
Constant losses and limited liquidity mean they have to do something different. Fortunately, the cash flow stream from their advertisers before a maintenance level of advertising is quite high. This gives them the flexibility to either sell the company for substantially more than it is trading for now, or convert to a free model. Of the two, converting to a free model is more appealing. Yelp, a similar business with similar revenues has 10 times the market value as ANGI. The market has spoken, the free model is much more valuable. Converting to a free model will allow the company to cut sales and marketing costs considerably allowing it to be profitable and growing. It would be simple to do. What are they waiting for?
Ford said they will lose a billion in SA this year, but that indicates an improvement from the $800 million lost in the first half. The recall is just a one quarter issue. So what caused the sell off?