So you proved my point. So why the discount to market? Do they expect Mu's earnings to drop 50% to equate to the same PE as peers?
If so, how realistic is that?
At some point, considering Mu's favorable cash flow wouldnt someone with a higher "multiple" come knocking? I mean, wouldn't Mu's business at an 8 PE be highly accretive to someone with a PE of say 25?
Makes little sense to me.
If they want to play big boy company. They really have to evolve their image. Plenty of opportunity to make $ in their shops. Just need to refine the process. Who knows in 5 years this could be worth something; if they survive.
I have no position in this Co and have no plans to any time soon.
To do that ... an SO would have to be in the range of 400M raise. Which the only way that to occur would be to buy an existing lessor. Also, hard to grow capital for investments when paying healthy dividend.
Take a real good look at the income statement.
These guys have a gross margin of under 7% and Net income % to revenue of under 1/2%. What this means is simple. For every "bad debt they have or insurance charge back of say $100 they have to Gross $20,000. Put that in perspective. For every time the President, CEO meet with their attorney's to discuss pending litigation or anything where they incur a $5,000 bill they have to sell $1,000,000 of product.
Folks that is a recipe for disaster.
From their press release...
" For the full-year 2015, we expect revenue between $2.8 and $3.1 billion, net income between $12 and $14 million, Our expectations assume 59,000,000 weighted average common shares outstanding throughout 2015"
So... on the high end.. That's about 24cents per share. At a robust multiple of around 25x (20% higher than current market multiple) you get expected share price of around $5.93 based upon 2015 full year revenues of again on the high side of $3.1 BILLION so that's about 1/2 of 1%.
ULTA - selling cosmetics.. in 2013 did $2.6 Billion of revenue and had an after tax profit of just $202 Million. Or 7.7% on Revenues.
Sorry, DPLO, if it were me and this is it. on nearly $3Billion of revenue. I'd find another line of business. Seems like this pharmacy business was a hobby you couldn't get away from and somehow made it a business. But, its too much effort for too little reward. From an investment stand point in order to justify $30 a share they would need to be doing $20Billion of revenue to create $1.50 a share and have a 20x multiple. As it is now their multiple on 2015 is around 129.
Its not sustainable.
Sentiment: Strong Sell
An end one way or another.
a. an end to the conservatorship and a path to freedom. or
b. an end to american society, culture, and the rule of law.
It was good to break this resistance level. But, it will probably be short lived. The overall market is getting frothy again. So look for a pullback across the board. This will take Fly down $2 bucks or so. Yes, I know fly hasn't paticipated in the recent feb recovery. But, expect it to suffer as always.
I know what you mean. I had to pay tax on phantom gains I didnt have because i still have not sold since i acquired Royce Labs shares in 1992. Sucked paying 25% tax on $140 gain i never realized!
I believe the cause for that was Actavis taking the company "off shore". Thus, it won't happen again.
It'll be a tax free - name change for you and me - i do believe. Oh, forget about calling investor relations - they are useless.
Sorry, but i don't know of many stocks that go from 30cents to $2.50? That's not a bad %.
I can think of no settlement opportunity that involves allowing the government to take or keep what they did not honestly earn nor are entitled to. Therefore the warrants are garbage. Berkowitz and Ackerman are wrong on their position regarding the warrants. The greedy government should not be allowed to keep what is not theirs.