Exactly. And a pro-management board made up of family friends is the real problem with this company. An independent, pro-shareholder board would have gotten rid of these clowns a long time ago. The board make-up is the reason the shorts went after this company. Let's hope Baker Street's action wakes up other large institutional investors into also becoming activists for change.
I think a lot of short term traders bailed when they realized SFY wasn't going to become a moon shot to $10 and above. The news about Baker Street is positive, but they will need other institutional investors to join them in pressuring the Board into some kind of action. A 10% stake alone won't get anything accomplished.
Shorts have to be starting to cover at this price. The fact that we are up over 5% on a terrible day would have my attention if I was short.
No question we are oversold. SFY is now selling at under 1 x EBITDA/share even when reducing EBITDA for lower oil and NG prices. This price is really unbelievable. Another Eagle Ford firm, PVA, is in much worst condition with lower EBITDA, higher operating expenses and higher interest expenses is down 50% since Sept 1st, but is still selling for 1.5 x reduced EBITDA/share.
Watching NG prices closely.They are on the verge of breaking below $3.80 mmbtu support that has been in effect since July. Below that it is a quick drop to $3.50 and maybe even lower. That would certainly send SFY below $7.
With prices for oil & NG down some 15-20% since summer they might not be profitable anymore on a book accounting basis. But they are still very much cash flow positive. If the bankers don't call in any of the outstanding financing they should be fine. They just need to maintain their drilling activity.
Who is the idiot that gave me 6 thumbs down for paraphrasing an article that I read. If you don't agree then give me your reasons and not your finger.
That is all the cash that they reported at the end of last quarter. This company lives paycheck to paycheck. They have to keep getting oil out of the ground to pay the bills. But I think a lot of the small exploration companies are like this. But a lack of cash in the bank does raise the risks if cash flow from operations declines further.
Lower oil and NG prices lowers reserve value and thus the amount that banks are willing to lend against those reserves. It also means lower cash flow from operations already up and running. With shale oil/gas well depletion rates of 80-90% after a couple of years, these companies have to keep drilling or they go out of business. The question is, will they be able to finance those new drillings with lower cash flow and higher interest rates demanded by lenders? With SFY's financing already at a high level, they are probably staring down the barrel of a gun if oil/gas prices keep dropping. They might not be able to get the money to keep drilling. Lets hope oil/gas prices find a bottom here soon.
But then Terry would lose his $750,000 a year job. Insiders only hold 2.5% of shares, so he makes more money keeping his job than selling the company. With the board being made up of family friends, a sale isn't likely to happen unless someone offers a huge premium to the current share price.
Both companies have about the same level of debt as well. So high debt levels alone won't stop a deal from happening. ATHL oil prevalence certainly gives it more value than SFY's gas prevalence, but this transaction still shows SFY's ridiculous undervaluation. But ATHL had something someone else wanted.
Selling for almost 1.5 x sales per share. That is very cheap for a medical equipment company that is growing sales volume, even if it is modest growth. However, the chart is a little scary. Next support on the weekly chart isn't until $6.50. It really needs to hold here in the $7.25 - $7.40 area.
Not so sure. We are possibly taking out $72.50 support on the weekly chart. If this really gives way, the next support isn't until $61-$62. So this thing could go either way.
We need consistent order growth of 20% or so every quarter, not just one quarter every now and then. If management expected this kind of order growth to continue, their revenue estimates for next year would be much higher.
A buyout is the only thing that will launch this stock higher. Sales growth is just to slow for much upside. otherwise. Still hoping for a buyout, but just not sure if this business is big enough to really matter to a large, multi-national medical device firm.
My wife's pet sitting business takes her inside people's homes, mostly middle-upper-middle class homes. She says that the majority of homes that she goes into now have a keurig machine. You may not use it, but a large percentage of people do.
The problem with this firm is that it is no longer a growth stock. Expected revenues growth for next fiscal year is less than 10%. Sure, maybe they will finally achieve break-even by the end of next year, but the stock price already reflects this. We need top line growth in the 15-20% range to propel this stock forward. Maybe management is playing it safe with their estimates, but that is a bit of a gamble to think so. I think that their are much better growth investment opportunities out there than this.
What is the possibility of this stock getting to $5 by January? I am looking at the Jan 2015 $3.50 calls. They are only selling for $.30-.35 and would be worth $1.50 or more if this stock gets to $5. it seems like a little downside risk for a good possible upside. But I don't know much about this company and the drillers as a whole are beat up to no end right now.