My guess is that the hedge funds and, possibly institutional holders who increased their position in the June Quarter, will be out with their fat wallets Thursday and Friday running BIOL backup towards the 200 day average. Somewhere around $3-$3.50 by Friday afternoon. There must be MMs and their ilk trapped in short positions after the halt. They will balance their books one way or another by Friday.
Before today's melodrama, there would have been a substantial and righteous short position. Then today more shorts planning to cover during the last minutes. So now, one wonders weather they have deep enough pockets to just wait for the widely expected disaster. Or, will just cover to not get caught in some sort of bear trap. We shall see.
Umm. My concerns are hypothetical, but we have seen in the not too distant past that simply relying on the great man is a palliative for anxiety but not necessarily an antidote to risk.
Two unresolved concerns: 1) can Frost stand a margin call and 2) has he simply drunk the Kool-aid as they once said when the past was still the future and, now I think about it, 3) can OPK rise much before the results of the acquisitions are digested and the droppings inspected by the seers? I'll probably end up tossing a coin to decide whether to buy any just now.
I could not resist. This is a momentum low float stock and holders were looking to lighten their positions. The tax question - a Health Care Reform Act mandated tax on half the things Cantel sells - can't be a serious problem over the intermediate term, but maybe it inspired some undecided momentum holders to lighten up. I bought my position dollar limit today and naturally I think everybody who reads this ought to do the same. First thing tomorrow morning. Or anytime before it gets back on its trend.
Sentiment: Strong Buy
You were right. Sterling says:
"Strong Financial Position
Sterling is in sound financial condition. Working capital at December 31, 2011 totaled $95 million, including $61 million of cash, cash equivalents and short-term investments. At December 31, 2011, we had no outstanding borrowings under our credit facility. Up to $50 million in borrowings, less a $1.8 million letter of credit, is available under the credit facility with an optional increase amount of $50 million. Tangible net worth of $161 million at December 31, 2011 is more than adequate to support our bonding requirements."
That said, I am still, as they say, cutting bait. Two issues to weigh while imagining the school of Sterling shares settling into cooler waters: forward PE too rich for the business & management now challenged by unreliable financial controls in a difficult environment.
I am considering bottom fishing STRL.
It is not a little offputting that the coming net loss is from unfavorable revisions to cost and completion estimates on their existing contracts. These estimates are under management's control.
The write downs of goodwill will come on top of that projected loss. It is not unusual for a company to empty its laundry hamper when it has to do the stained sheets anyway - just not exemplary.
Presumably with Mr. Harper headed for the door with enough shares sold to keep him for a bit, they all agreed to let it all flap in the breeze. One cannot help but be concerned that they'll overload the clothes line and the lot will splat into the street. Meaning, for example, violating debt covenants.
Does anyone know anything about what they have promised their bankers?
Most of us prosperous Americans seem to love our cars more than our children. We have more empty houses in reasonable repair than highways. No matter who wins the election next year a burst of road and bridge building will follow. That would be why institutions like Fidelity are adding to their positions.
I'm wondering what low ball offer to make on STRL to begin mine.
I blame US too. Our society decided that federal regulation is bad, and the honest, if gullible, citizens pay for the prosperity of the dishonest.
The razors, swords and axes used along Wall Street are all fairly old-fashioned. By that I mean: double edged.
I'll give you that DDS is doing OK in the circumstances, but I can't see valuing a contracting retailer above 12 to 15 times earnings. If the next 12 months earnings are 92 cents, my PE valuation is $11 to $14.
DDS is managing the contraction of its business well. It is conservative financially. So no disaster is coming. Just a downward price creep in a contracting industry segment within an increasingly competitive industry.
Are you saying that CTIC doesn't need to worry about raising capital because these sponsors pay the bills?
Perhaps Novavax will offer a special dividend to its stockholders in the form of an injection from the first batch.
Would you please take a moment to explain how Echelon makes money on a BELIMO installation?
Here's the Wikipedia link:
ESEA looks interesting to me because of (apparent) low debt levels, but I am wondering about off balance sheet commitments.
I had hoped for a bounce toward Metallico's book value so I could take my tax loss like a man and get back in before the year's out. I can't be all alone in this. Maybe that's why MEA is rolling instead of bouncing.
I was looking for a housing stock to play for a bounce. I worried a bit about TOA's liquidity, but was relieved to see that they are working a deal. Great. Bankruptcy will be avoided or postponed. Now, where's the floor for the bounce?
So I started looking through the settlement announcement, and, oh my, TOA avoids bankruptcy by handing over the company to the financiers. It's an honorable thing to do, but how does TOA avoid becoming a penny stock?
It's beyond me what the value of the existing stock is.
The convertible preferred stockholders get to lick all the frosting off the cake. Dividends are paid no matter what, in stock if there is a better use for the cash, like paying interest on all that debt. The preferred has a liquidation value of $117 million in case TOA just can't make it through these tough times.
Maybe that's a way to guess an expected value and so a bottom. The $117m divided by the current 60m shares outstanding would be, ahh, $1.95.
Or preannoucement market value (with the threat of a liquidity crisis) $4 times 60m shares gives us $240 million less guaranteed equity of new owners $117m gives us $223m divided by the shares gives us $2.05.
TOA is lucky to have such a huge short position. The shorts, if they are not the financiers, might feel like covering after the July 31 settlement date. Otherwise, why would anyone buy a cake with most the frosting licked off.