"Hoping" for a "breakout" is not investing. it is hoping.
The stock is overvalued, based on the fundamentals. Any other claim on your part is patently false, and merely a result of your becoming "wed" to this stock, as one of your " glorious multi-baggers" that you want to continue to "milk" the psychological gains from. That is pure psychological hubris.
I added to my short at $19.69, and am at roughly half of my previous peak short position.
Sentiment: Strong Sell
The vaunted and much ballyhooed "turnaround" is yet to be seen. Under Kathleen Mason, the company had a Q1 operating loss, IN RECESSION YEARS, of $6.8 million in 2008, $6.9 million in 2009, and $3.5 million in 2010, for an average of $5.8 million. What EXACTLY has Mssr. Rouleau actually DONE to justify the stock's selling at $20+, versus the $4 it was selling at in the Mason era, when HIS Q1 fiscal operating loss just reported is $5.8 million?? Sure, the results were modestly better than I expected, but what EXACTLY are people "celebrating" here?
Rouleau is a fantastic salesman, and a decent manager, but he lays it on so thick, that his credibility comes into serious question. The notion, as he kept repeating in the comference call, that the company has "low hanging fruit everywhere" is outrageous, and intended to MANIPULATE investors. If Rouleau has been running this thing for 20 months now, he is an INCOMPETENT if there is still that much "low hanging fruit." Sure, you can't build Rome in a day, but the overall improvement, to date, has been MEAGER. And they are guiding for high single digit same store sales growth in the current quarter, NOT double digit.
Also very telling, they are only talking about breaking even, roughly, in fiscal Q4, which pretty much tells you,based on historical results, what their annual EPS are likely to be, and I will tell you...it is going to be somewhere in the vicinity, give or take, of 50 cents. Does such a ROE, and turnaround, justify a $20+ stock?
People are so enamored ot the TRAJECTORY of the same store sales increases, but unless the company keeps up 10%+ increases for at least the next 6 quarters, the current stock price won't be worth anywhere near justified. And Becker Drapking knows that, more than anyone.
The company continues to have a BUSINESS MODEL problem, & despite being a very solid manager, Rouleau is strongly evidencing he is having SERIOUS PROBLEMS moving the needle on merchandising
Sentiment: Strong Sell
I'm not "hoping" on HERO. I am confident on HERO. Declines in prices of stocks are opportunities to take advantage of, if the fundamentals haven't changed. I don't let fluctuations in stock prices dictate my view of value. I let the fundamentals, RELATIVE to the current trading price of the stock. Your classic "i don't want to miss out on more gains, and so I'm going to keep holding a position in a stock, when i could easily find a better one," is what i object to......because i see it as being undisciplined.
.....shows that they are DESPERATE. (Why weren't they referring, as sedulously as they are now, to these opportunities in prior quarters??!) It also is indicative of a CREDIBILITY problem. Specifically, wouldn't a fully competent manager have, by definiition, TAKEN ADVANTAGE of low hanging fruit, which, by definition, is "easy" to capture, after being on the job for 20 months or so??
I believe Rouleau IS competent....but i believe the low hanging fruit refreneces are DECEPTIVE, intended to "keep the music going," and "string people along." The fact of the matter is, considering how bad everyone thinks the merchandising and presentation WAS under Mason, the fact that the improvement has been so modest to moderate, after all this time, under Rouleau, is a mark of failure, and or representative of a fundamentally compromised business model (this latter thing being something Rouleau would NEVER want to admit....even if he believed it to be true).
The business is still in the early stages of a VERY dubious turnaround, where merchandising success remains FAR from assured.....a turnaround that might justify a $6, $10, or $12 stock price, but which is a totally unjustifiable at $22 (after hours). If the company earns 50 cents this fiscal year, and even 75 cents next, is it really worth $22?
Sentiment: Strong Sell
I agree Rouleau is better than Mason, but the proof is in the pudding, and his results, from a profitability perspective, are NO BETTER than those under Mason. Maybe he has already CAPTURED the low hanging fruit, with the sales gains to date, and it will eventually become more difficult to keep those gains going. (Personally, I consider the "flattish ticket size," on increased traffic, to be a rather disappointing commentary on his vaunted lower IMU (initial markup) strategy. And i would daresay it is something they are VERY concerned about themselves, behind the scenes. But they would never tell you that.)
If they can do 10%+ comps, for the next 6-8 quarters, The company MAY EVENTUALLY "grow into" its valuation. But that is a tall order, I am convinced, and in no way does the current risk/reward justify the current stock price. What "justifies" it is Rouleau's skillful hyper enthusiasm, and the broadbased faith in this pied piper, for what he hath wrought at Michael's Stores. i believe in buying a manager, to some degree, but this situation has gotten utterly ridiculous.....especially this apparent sudden discovery of all of this "low hanging fruit," which is purely fatuous flim flam, IMHO.
That is true. but i believe they haven't changed enough, as drilling in the Gulf of Mexico keeps going on, as long as prices are above $50, is what i'm told. (HERO doesn't do fracking or oil shale.)
And they said in the last comference call that rig pricing is holding up.
Now below $20. There are now many more longs that want to ring the cash register, than shorts that are "desperate" to cover.
It is going to get interesting. The stock is arguably worth $10-12. Or even $8-9.
75% of the move in this stock has been pure drama. 25% or less has been because of bonafide results.
What good are new cash registers and clean and well organized stores, and lower initial markups, if people are not buying CONSIDERABLY more on each visit?
The strAtegy, in its essence, is a failure, and the xmas quarter represents the "do or die" time that is likely to send this stock back into the low teens...when all the sheep and Rouleau groupies start all trying to squeeze through the exits at the same time.
Sentiment: Strong Sell
I'm having a bit of fun with it, through a wee bit of farce and exaggeration.....and if that isn't the point of life, i don't know what is.
i happen to agree with you on this one. i'd like to see these effers buying 100K share blocks at these prices. as a result, i am waiting until december to consider adding more....or a further price drop in the near term.
Much higher entry point. I would be comfortable making HERO 7-8% of a portfolio at this point....with 5-6% in PGN. If they drop another 20-30% before year end, bring HERO up to 10% of portfolio, and PGN to 7%.
I think CLGRF is the "must buy" miner, at these levels, as will be evidenced in tomorrow's earnings report (which I am only saying, based upon the spectacular production report they prereleased).
And yes, I am the largest shareholder, and a 5% owner, of CLGRF.
I still think RVM and TC are excellent buys in here also. Among others.
See the latest Form 4 filing. Ominously, he was using a 10b5 plan upon the earnings release, which expired on 11/4.....And then he sold shares outright, "by choice," in the open market, on 11/4.
Becker knows that this company's stock price is a pipe dream, that bears no relationship to the only modest turnaround in the fundamentals....and the very disappointing turnaround in overall merchandise gross margin.
And what digital properties will they still own? and what are those properties worth in a sale?
What is the breakup value of MNI?
Can value be created if they spin off various parts, or do some other form of financial engineering?
Versus $6.6 million a year ago.
As a value investor, i always like TANGIBLE asset value, as a means of creating a "margin of safety." That having been said, the earnings, adjusted for one time expenses, look impressive....especially since they've only gotten some of the benefit from the acquisitions...and little of the expected follow on synergies yet. So as long as the cash flows and profits justify the acquisitions, going forward, rather than turn into some of the "klinkers" they've had in the past, goodwill or not, the stock looks undervalued, and the timing of my "forced sale" very unfortunate for my purposes.
I will be happy for friends and nonaffiliated relatives who are in this stock, though, who will be able to profit.
Like 30% of assets, vs HERO's 5% of assets write off.
I'm now waiting for lower prices in december on this one, and prefer HERO to PGN, at this point.
Not totally out of the realm of possibility....But you'd need gold at $1400-1500 US for that, I'd say, and a run rate of probably 65,000 ounces, through the end of 2015, at least, to get that. Is that your expectation?
I think a 12-18 month target of 40-75 cents if more realistic....assuming, maybe, $1300+ gold, at some point during that period.
I believe wage inflation is going to pick up in the US, as is economic growth, making for a more favorable backdrop for gold. I also suspect a "reversion to the mean" on commodities prices generally.
But that doesn't mean i couldnt be wrong and gold will stay around $1200....or go down.
You're comparing market cap to ebitda margin and fact that company has a bottom line loss? That's hardly a sound analysis. If PGN took a huge 30% of assets writedown, you can be certain those ebitda margins are going significantly lower. I prefer to look at price to book and price to sales, and HERO is cheaper on those measures. They also have a $200 million firewall of cash, nothing drawn on their revolver, and no material near term debt maturities, or covenants to bust. The insiders have also bought "all the way down."
As if that ONE stinking fact is "deterministic" in whether to choose PGN over HERO??
Good luck with your investing "regimen." You'll need it.
Paragon's debt to equity, adjusted for cash, is now higher than HERO's. Yes, it is has higher ebitda margins, but those look like they are going south. Also, are the PGN insiders buying stock in the open market like HERO's are?