I agree with many here that Adam Fuerstein has a motif with his negativity on Zerenex. However I must say I'm disspointed that I've seen no article today countering his position on no likely NCE status for Zerenex.
I have followed GV for years, and I don't recall the inaccuracies you speak of. To give you a recent prediction, which the CEO has been pretty spot on with. He said back in the spring that he felt GV can replace the additional revenues from the CREZ project, soon after the project completed, from new business.
With the CREZ project, GV was posting around $22M-$25M/qtr all through 2013. Revenues outside CREZ in late 2012 and through the first 3 quarters of 2013, were around $14M-$15M/qtr on average. Well CREZ was finished in August, and even with having to finish that(it was part of the sept qtr), they were able to secure $23.4M revenues outside CREZ in the Sept qtr. Therefore it appears as soon as CREZ was finished, GV was able to almost immediately replace those revenues with more short term business. In addition to the impressive showing, GV increased their backlog outside CREZ by $5M in the Sept qtr. As if all that wasn't impressive enough, they then said in the 10Q, that contracts recieved since Sept 30, and more expected to come will significantly augment Dec qtr revenues.
To me, from what I'm seeing, it seems GV is doing great and growing strong(despite the two weak qtrs in Mar and June). Just because they haven't gotton another long term contract like CREZ, doesn't mean they can't keep growing revenues and earnings. Right now I expect $.10+ for the Dec qtr, and hopefully we'll hear of the aquisition they spoke of, or maybe even another large contract.
Either way, the stock is rediculously cheap at $2, as that translates to only a 5 PE or less fully taxed going forward.
Your reasoning is suspect. Valuation isn't based on past qtrs, only on how well the company is expected to do qoing forward. GV could have lost $20M for 2013 so far, and it still wouldn't matter, as long as they're projecting growing revenues and profits going forward. In fact, when it comes to the trend of a stock, the only thing that investors care about is revenues and earnings going forward.
GV has increased there backlog in the last qtr by $5M, and increased revenues qtr over qtr by around $6M. Going forward, they said in the 10Q(page 14) that contracts awarded since Sept 30th, and more contracts expected, will significantly augment Dec qtr revenues. We know that without the one time subcontractor loss for the Sept qtr, that they would have posted $.08 or so, and we know things are looking even better for the Dec qtr. Bottom line is, going forward looks fantastic, and they'll likely double EPS in the Dec qtr from $.05 to $.10+.
However if you feel confident in your view, maybe you should short the stock.
musk, I understand your concern, but taken in context of their muti year history, GV rarely has had much non recurring charges. I doubt they will all of a sudden start messing up every qtr. Right now, I believe what's important is to note and continue seeing is their backlog increasing, and the $5M increase qtr over qtr was impressive. Also impressive was they could do $23.4M in revenues without the STEC contract. The additonal comments in the 10Q of recent contract wins, and the expectation of more to come only adds to my belief that their backlog will continue to grow.
As far as valuation, I believe it should all be based on future estimates. Right now, my assumption is for at least another $23.4M qtr or better for the Dec qtr, and continued backlog growth(based on company comments in the Q). Using the same expenses, margins, tax rate, etc as in the Sept qtr, it seems in the bag for them to post $.10+ for the Dec qtr. Therefore with that potential into 2014, I see no reason not to give the stock a $4 target. This assumes a very conservative 10 PE fully taxed going forward.
I don't agree. I doubt after posting $23.4M in revenues, and stating the backlog outside STEC is up $5M, and new contracts since Sept 30 should significantly augment Dec qtr revenues, that the stock will retrace to it's recent lows. However if it does, I'll load up like no tomorrow.
gasparyan- The proof of the puddin is in the eatin. The only way to know who is doing better, and has done a better job analyzing the stock, is to keep track of how well we are doing % wise at any given time. Everything else is BS. Please state what you shorted the stock at, and when you cover. I will start by stating my average buy is $10.38. I am up approximately 20% so far. How are you doing so far ?
Yes, and most likely GV wouldn't have stated that recent and anticipated contract awards are expected to significantly augment fourth qtr revenue if it weren't going to be higher than the Sept qtr. Being that Sept qtr revenues were $23.4M, I believe they will be more like $25M+ for the Dec qtr. Since without the rare contract loss in the Sept qtr, they would have posted $.07-$.08 in EPS, I believe that they will post $.11-$.12+ in the Dec qtr. Also this doesn't even include the potential of future earnings from the aquisition they mentioned might happen in the 4th qtr, or any sizable contracts that might surprise us with.
I loaded in the $1.90s. It's absolutely amazing to me that, even though the company has plainly stated in the 10Q that backlog outside STEC has greatly inproved, and that Dec qtr revenues will likely be strong, that investors aren't buying it up. Using only the same revenues as in the Sept qtr, using normal margins, tax rate, expenses, etc, GV should post around $.08. However I believe they will post higher revenues of around $25M+ for the Dec qtr, and post $.11-$.12. Either way though, the company is showing strong growth now outside STEC, proving they have replaced the STEC contract with smaller jobs. The company easily deserves $3+, and this only assumes an 8 PE going forward, I continue to add on any weakness.
IMO. With $23M in the Sept qtr, and without the rare $1.1M contract loss that happened, GV would have posted $.075. Average tax rate for the Dec qtr was 3-5% higher than normal as well. Going forward we can see from the 10Q that backlog outside STEC has increased from last qtr and year over year by over $5M. Also the company boasts of getting enough new business since Sept 30 for the say that it will significantly augment 4th qtr revenues.
To me this means more like $25M+ for the Dec qtr. If we use the same expenses as in the Sept qtr, plus assume they have no more rare mishaps(contract losses), using 24% margins, and using a normal tax rate of 39%, GV would post $.11-$.12 for the qtr.
With the same $23M revenues in the Dec qtr as the Sept qtr, GV would post $.075-$.08. However their backlog outside STEC has gone up 31.8% year over year, and they say right in the Sept qtr 10Q that they expect contracts since Sept 30th to "significantly augment fourth qtr revenue" for the Dec qtr. Here is out of the 10Q page 14...
"Significantly, non-STEC backlog at September 30, 2013 increased 31.8% to $24.5 million , from $18.6million at September 30, 2012 . Of our total backlog at September 30, 2013 , we expect approximately 66.9% to be completed during 2013. Contracts already awarded since September 30, 2013 , together with other anticipated contract awards, are expected to significantly augment fourth quarter revenue.
Here is out of the Sept qtr 10Q, page 14. Backlog was way up in the Sept qtr, plus the company states that the increase in business seen since the end of the Sept should "significantly augment 4th qtr revenues" ...
As of September 30, 2013 electrical construction backlog was approximately $24.6 million , compared to $53.6 million , as of September 30, 2012 . The decrease in backlog was largely attributable to the completion of the STEC project, which represented $35.0 million of the backlog at September 30, 2012 . Significantly, non-STEC backlog at September 30, 2013 increased 31.8% to $24.5 million , from $18.6 million at September 30, 2012 . Of our total backlog at September 30, 2013 , we expect approximately 66.9% to be completed during 2013. Contracts already awarded since September 30, 2013 , together with other anticipated contract awards, are expected to significantly augment fourth quarter revenue.
loss, which is rare. Also they had some STEC expenses from last qtr, and a higher tax rate than normal in the Sept qtr. If they keep on posting $23M/qtr, they should post around $.08 in EPS. That would mean $.32 going forward, and IMO a $3 stock price could be warranted.
If the CKD data given for phase ll were so unimpressive, why did 100% of the analysts covering the stock raise their price targets by 50% on average right after the news ? Do these analysts have no idea of the unimpressive results of phase ll for CKD patients that you know is true. By the way, what is your backround in general medicine ? I think maybe hschlauch is a big more knowledgable- no ?
joseph, non of us can time things that specifically IMO. While I agree with you, that analyst targets(which now average $24) are 12 month, I believe the stock is worth at least $15 right now, and positive news of approval in Japan should spike the stock to $20+. Surely analyst targets are not including FDA approval for Zerenex use for pre kidney dialysis patients. When phase 3 trial results are announced, and if positive, I believe analyst targets will go up to the $40s+.