This is in the 1-4 purgatory price range. It has to prove to the market that it can make a profit at a certain price of Oil. There is an 80 million bet that this won't make it. This is a cyclical stock though. But there is a risk that the cycle could break to the downside.
What McDonalds needs to do is eliminate stores, food items, etc. What they need is a survey system that tracks what food items the customer bought, their survey rating, etc. Then they need to analyze what food items bring in the lowest surveys. Eliminate those that provide little return. They need to eliminate any offensive items. Consolidate and focus on what is profitable. Their competition is no longer wendy's, sonic, burger king, chic fil a. It is the Five guy system. Pie Five, Five Guys, Chipotle, are all companies that have an efficient model that reduces the offensive customer service that runs rampant in what should be quick service. I have been there multiple times and each time the employee is doing 40 things which is all well and good but I want to place my order - they are bagging food, making drinks, and it is a hassle. I go to five guys - What McDonalds was back in 1920 - 1980 and I I get what I am looking for at a price that is worth the less disrespect. The product is not the problem. It is the delivery system. The three critical factors in business is Feeling, Time, and Price. They have the price down. They have somewhat of the timing down. Feeling can be masked by great marketing but there is a lack of quality that has been lost by being a budget focused company.
I think it is actually the creditors. They are pushing for restructuring. Then, when this happens they have made money from the short, then they have the new assets,
This is not ruled out but there are some flaws. 1) there were large purchases from Officers from May until June. 2) The collapse of the share price was largely due the entire market collapsed dramatically and in fact the takeover target last year dropped the law suit because of it. I think they went a little overboard on the debt but they needed liquidity. The asset sale will at most be in the 100 million and I would not expect it to be higher than that. I would expect it in the 50 million range tops. The issue with this company was timing. They did not look forward and are now buying high and selling low. I think if they survive, this company will be stronger and in 3 years pending oil resurgence could be well in the 80s.
There is price manipulation going on 500k transaction was a short cover. What I suspect is that the big short covers by finding a big buyer. These were prearranged and thus I filed an sec complaint as it short hands the price of the stock. It is as you know well undervalued. For good reason as oil has been cut in half.
Just like you said it about HIMX. You good bottom caller. Keep posting and let me know what you are shorting. The time to short this was last year. The time to buy will be after OPEC meeting. June 5th. You might get lucky if the speculators dislike what OPEC does.
Rinse repeat. Oil prices need to converge higher. This is only due to environmental disasters like the oil spill this week. BP was in 2010 near when Oil dropped. Companies will cut corners to stay afloat. That means increased risks as such.
They learned this technique from experience. They keep forgetting though that this is a non-renewable resource that they have a lot of. They have peaked in 2005 with Oil. They have 30-40 years left max for Oil. It won't disappear in one day. They will need to replace it eventually. This should only be a temporary influx to make the main cause of the glut to stop producing as much. If you cut, they will not cut and keep the market share needed. Oil is unique in that a drop in Oil prices creates a rise in Oil prices and vice versa. OPEC is trying to maximize the oil price by not cutting production and placing those who caused the influx of Oil to stop. They are more focused on this than market share.
Both parties run up the debt. What happens is congress has strong incentives to be reelected. They need funds to run campaigns. Then comes in a donor who happens to be connected and can win them in exchange for representation and contracts. This runs up the debt as departments buy thousands of stuff that they don't need to appease people who get huge returns on buying votes. The debt will always be run at capacity because of this.
These companies are waiting on OPEC decision in a few weeks. Most likely OPEC will keep production the same or ramp it up. It may be an opportunity to buy cheap shares. I am thinking that if they do cut production, it would only allow for the $80 a barrel range. If the Saudi's cut production, it would hinder financial companies more than oil producers. But this stock will likely double from June to August even without the asset sale. This is the only positive news that would uncorrelate the stock from Oil in a positive way. And even then, I think once Oil hits 75 dollars a barrel, this will still have to prove it in the earnings reports.
If I had 600 million, I would take this company private. You might get that on June 5th after OPEC's stance on cutting production is certain. This company has an asset sale going on right now. If that news is revealed you have a serious problem. GDP is a better short candidate without the asset sale risk of losing your shirt. SD would also be good as well to play oil shorting. This one is not so much. Best of Luck.
June 5th will determine where it is headed. If OPEC cuts production, Oil will rise. T Boone Pickens stated that he sees $75 dollar oil by year end. Then $90 by the end of 2016. The $90 he seemed not sure. I think we see $80 next year at least.
Big shorts are covering larger and at the end of day for the past week or a big buyer is coming. OPEC will likely cut oil production as there was a change in what the Saudi's have stated previously. Originally they said Americans need to cut production. Now they state that Allah will decide. Anyone who is selling or buying are margin is a fool. Hold this and buy the dips hand and fist. I recommend that you do not short and buy the dips. Any 3%+ should drop off, Should be a buy.
The next inflection point for the company is June 5th and also when they announce the divestitures June 5th is OPEC meeting. If they cut production up. If not, down. Divestitures depend on how much they sell for and the cost. This will trade with Oil now that the earnings has been released. I am holding with my spec account and plan to only sell if I see a greater opportunity.
Wow you must be dreaming as well. This will stay in a 10% trading range until august earnings. Oil price sustainablity will be the drive of oil companies. Earnings will need to show a profit at 60 barrel price. You are now on ignore.
Less Goodwill their net tangible assets increased quarter over quarter. I think the bankruptcy minded shorts will cover after earnings if they see that they have little to risk of bankruptcy. Right now the biggest driver is earnings on Thursday. With Oil going up, and this staying flat, this decreases the risk of huge tank unless there is a major miss.