4wd, Portnoy has been doing damage control since
the loss of Commonwealth. His move to consolidate
SIR into GOV is an example. You can bet he is manipulating
behind the scenes to delay and procrastinate the
shareholders meeting because he knows the angst
felt for him and the BOD. IMO he will continue to kick
the can down the road until his hand is forced.
This could be done by an activist shareholder group,
an unsolictited hostile offer, or SNH intervening.
Portnoy is in a corner, and its just a matter of time.
All he is doing by his obvious malfeasance is
alienating more people everyday.
Last weeks Form 4's showed board member
Aylesworth sold 1600 shares to acquire
5000 option shares at $4.60.
The former chairman has been acquiring
swap shares over the last 2 years.
There are many reasons to sell, but only
one reason to buy!
Form 4's filed last week show 2 insiders
purchasing a nominal number of shares.
Frank Russomanno purchased 3476 at $3.78,
and Phil Soran 4,600 at $3.78.
There are a lot of reason insiders sell,
but only one reason they "buy".
Last summer HSKA announced the sale of non core
assets (Bovine and feline vaccines) to Eli Lilly's/ Elanco
Animal Health. Heska produced these vaccines at the
Diamond Facility in Des Moines,IA. As part of the sale
Heska agreed to continue manufacturing the vaccines
at Diamond as a subcontract manufacturer. Elanco could
elect to change the agreement by a buyout of the 10 yr contract.
I believe this move was Heska's best option to exit the
OVP business. By partnering with Eli Lilly, Heska gives
Elanco a honeymoon period to do due diligence on the
operations at Diamond. I would be a bit surprised to see
an eventual sale of the Iowa plant and equipment to Elanco.
Sears, With or without restated financials, you would
think VTR, and others can do back of envelope math.
It would be nice too see Ventas make an unsolicited
offer for FVE. Many felt VTR stole the deal you mentioned.
Heska is finally starting to show growth and
still trades at a dramatic discount to peers.
IDXX trades at 15x book, while ABAX is at 5x.
Little HSKA trades at 1.5 x book value, and has
a lot of room for multiple expansion.
I expect CEO Wilson to continue to expand on
revenue growth, and profitability.
Wilson IMO executed the biggest coup of his
career parlaying his little company Cuattro into
a takeover of Heska. Who acquired who?
Wilson now has double the shares of any
other insider including the founder Grieve.
He has no emotional ties to Heska, and is
in a position to dispose of non producing assets.
A sale of OVP facilities and land could add $4
per share in cash.
I expect to see Heska trading at $20 and above
by year end. I wouldn't even be a bit surprised
to see Heska acquired in the next year.
Db, Many years ago I had a girlfriend that had a
perfect pair. I used to call her "double nickels".
I will defer to your expertise if you're an accountant?
However, I used to have rental properties which I
would elect to depreciate on a 10-20 yr schedule.
Looking at Heskas balance sheet they show equipment
as a depreciable balance sheet item and it has grown
from $4M to $9M in the past 2 years. I assume they
have added new equipment but this does not reflect the
value of the underlying Real estate in Iowa. Last year HSKA
announced selling the proprietary patents and rights
to several vaccines, and entered into a 10yr agreement
to continue to produce the afore-mentioned vaccines.
It is my contention that the manufacturing business was
never in Heskas baliwick and should be spun off.
I see the OVP as a dying entity. Heska can easily subcontract
to have the heartworm preventive mfg'd for resale.
dbldeal, Heska purchased the Iowa land and Diamond
nearly 20yrs ago for approx $12M plus assumed debt.
The company has upgraded the facility over the years
with production and packaging equipment to be FDA
compliant. This is the only real estate Heska owns.
HSKA leases their headquarters in Loveland on a triple
net lease arrangement. I see no place on Heska's balance
sheet where they give a value to this property. Do you?
There are several catalysts that could give
shareholders a positive surprize.
CVS pharmacy has been pilot testing Abaxis
POC analyzer for several months for use in
their in store clinics. The breakthrough of
a large order of the analyzers would bring with
it a steady recurring reagent stream.
Abbott is also partnering with Abaxis to
place the POC analyzers. The large marketing
reach of Abbott through their existing salesforce
should increase sales.
Up to now veterinary sales has eclipsed human
diagnostic equipment sales by a 80-20% margin.
That should change with placement of the Piccolo
in acute care clinics, pharmacy clinics, and other
alternative hospital settings.
Heska has shown solid momentum since
newcomer Wilson took charge.
For the first time sine 2007 the company
is on track to show revenue growth.
What show the faithful expect over the next
Heska has a history of seasonality. It performs
better in the last quarter of the year, and first
quarter than it does in spring and summer.
What is different this year is the new product ramps
that are boosting equipment placements.
(the handheld analyzer is an example)
The "RESET" marketing program has been well
received by customers. And with every hardware
placement, comes a steady stream of reagent sales.
Operating margins are improving. Heska is finally
able to show profits that can be sheltered using
the NOL's (operating loss carry forwards)
The imaging "Cuattro" division is growing sales
and offers ccustomers a compelling reason to
bundle with HSKA.
Wilson has brought an upbeat attitude to employees.
Happy employees are vested in the companies success.
Heska also has some undervalued assets I expect will
be disposed. The OVP division is not an essential core
business. Diamond Animal Health exists only to mfg and
distribute vaccines, and preventives, for third parties.
The Carlylse, and Des Moines plant and real estate
acreage is worth $15-$20M by my estimate. Heska has
depreciated these assets to zero. A sale of this property
would add $5/share IMO.
Wilson has many options and has only begun to unlock
the value in Heska. There are many reasons to be bullish
going forward. Buy the dips.
WD4, I like your astute observations.
I don't put anything past Porknoy after
the backdoor deal he did with SIR to GOV.
However, There is no way shareholders
would vote positively for a take private deal
without a substantial premium. A lower
than book value bid would invite competing
offers from others.
SNH doesn't have enough juice to veto
a competitors offer, and would be faced with
getting into the mix to protect their own interests.
Heska has some intermediate weakness following
a positive earnings report and forecast.
If you missed the boat earlier? This is a good time
to avg into HSKA.
As I suggested a week ago, another shareholder
meeting postponed and continued further delay
in filing SEC required reports.
The company now states for the 3rd time, results
from 2013 and 2014 are in process and will be
forth coming? What about honest communication
with share holders? When will that ever be forth coming?
No one has received a proxy statement. FVE knew
weeks ago that the August scheduled meeting would be
postponed and confirmed by not mailing proxy info.
The disingenuous attitude of Portney certainly doesn't
make for building trust and credibility.
Our best hope for disposing this BOD and RMR
is to have SNH come to their senses and realize
that a bigger REIT like Vestas is salivating over
this disfunctional situation. A hostile bid for
FVE would likely be received positively by shareholders.
Five could conceivably be had at a discount to NAV
just to spite the present management.
Rb, Having been on board since the depths of Dec 2011
when SRT dipped as low as $1.55. I see no compelling
reason to sell, and like you, share a strong conviction the
best lies ahead for Startek.
You have to like the progress Chad and his team have
made in transforming the company. It is also positive that
insiders continue to elect to accumulate share.
Over 32% of the company is owned by insiders.
These parties, as well as, institutions have strong conviction.
SRT has always been a low float, low volume, equity.
I expect if one waits on results of the next couple quarters,
they will be chasing SRT.
I've been buying FVE hand over fist from $5 down.
These low life sluggo's have to worry that they do
not control enough of the float to deter a hostile offer.
If Ventas or HCN offers me $6 for my shares, i'm a
happy camper. Any operator is better than one who
asks shareholders to bend over, and like it.
Portnoy's intransnagense invites his own demise.
I agree 100%. And while we're ready too depose Mackey,
how about adding CFO Hoaglund to the slash pile.
Hes the one in charge of the financial reports.
Maybe the auditor Ernst & Young should also be fired.
This company is full of self serving insiders that are
tied to the hip with the Portney's. Its time to clean house.
Every shareholder should be writing a letter to the
auditor to inquire why this outfit cannot produce quarterly
reports in a timely manner.
4wd, I have to agree. The continued delay and self dealing
by insiders calls for a shareholder lawsuit IMO.
Everyone of these breaches of fiduciary duty only furthers
the distrust of this gang led by Portnoy.
It seems apparent without the consideration of an
announcement. There will likely be no shareholders meeting
in August, or update timetable for the restated earnings.