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PHAZAR CORP Message Board

bbrutus08 2 posts  |  Last Activity: Jan 16, 2015 11:47 PM Member since: Apr 13, 2009
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  • Reply to

    PRODUCT RECALL

    by stockmizer2012 Jan 11, 2015 8:37 PM
    bbrutus08 bbrutus08 Jan 16, 2015 11:47 PM Flag

    It's hard to say, but there are a few possible explanations:

    - the stock isn't cheap anymore and risk/reward not as favorable; the upside is probably $30 in a buyout, but a big market selloff (definitely possible) or a disappointing quarter could send this illiquid stock back to the low teens - you could see some quant shorts in this just based on valuation
    - we are several years out from the "hockey stick" growth that should result from a successful DEEP trial
    - some investors question whether the company can ever successfully convert physicians who get paid well to do catheter ablations and have little incentive (other than patient benefit) to refer a patient to a cardiac surgeon
    - investors looking to short small cap or health care stocks as a group may include this in a basket
    - someone with more insight than us is taking an aggressive position against it

    Sorry, I don't have a good answer. I am encouraged that there has been very little insider selling as the stock has appreciated. Hopefully, that remains the case and management continues to execute on their long term vision. I do believe this company could have $1 billion+ of revenues in 6 to 7 years if the trials are successful, but that's pie in the sky at this point. We've had a good run, so it's not silly to take a few profits off the table. Best of luck to you.

  • Reply to

    PRODUCT RECALL

    by stockmizer2012 Jan 11, 2015 8:37 PM
    bbrutus08 bbrutus08 Jan 14, 2015 6:48 PM Flag

    Take it easy, Wes. He's right. Recall was posted on FDA website Dec 30th and was for 19,190 CryoICE probes because there was an issue in packaging that may have compromised sterility. I'm only guessing that they haven't put out an 8-K because the company deems it immaterial. Might be as simple as shipping the items back, sterilizing them and re-packaging, but that's only a guess. Until I learn otherwise, I'll give mgmt the benefit of the doubt here because they are doing a lot right in my view since Carrel came on board. He certainly gave the company a shot in the arm and the market is gradually rewarding us with a higher multiple. You could certainly justify a price around $30 if someone wanted to buy the company today, but a lot more value can be created here through continued organic growth and progression of the various trials.

    Sentiment: Buy

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