There is no recovery of their business short of a buyout
Should move nicely from here.
...since we seem to be bringing up irrelevant valuation points...I thought I'd throw one in the mix
In an environment where it seems almost certain that interest rates are going to rise, I would expect a couple of large regionals like RF to get bought by a PNC or JPM...we'll see...in any event the valuations of these regionals are going to rise rapidly in 2015.
Sentiment: Strong Buy
Sadly, in the next 2-3 quarters the company is going to have to do another financing...too bad they couldn't get financial help with the upcoming trials. The winners in ADXS won't be known for several years, and I don't think any current shareholders will be among them. There really doesn't seem to be another way around additional dilution (heavy).
Earnings per share: $2.26 for yr ended June 2014 vs $2.20 in 2013 (almost no growth)
PE = 23x (why?)
Book Value: $63 million at June 2014 vs. $149 million at June 2013
Tangible BV: -$89 million at June 2014 vs. -$3 million at June 2013
Market Cap = $3.3 billion (why?)
Expected free cash flow $180 - $190. (again how does this justify $3.3 billion market cap?)
Answer: Company keeps the market cap inflated by borrowing money to pay dividends and buy back stock. Not a good business model. The big boys won't hold forever.
Sentiment: Strong Sell
Don't get it - but I'll take it. Thanks!
Well - eventually the premium currently priced into the shares for an imminent take-out will go away. How much is the company worth estimated to earn $2.59 per share and grow earnings at 10%ish? A lot lower than $67. I suspect it will head back down to the $50's until the next round of rumors (planted in the foreign press by the fund managers wanting to unload) cough-cough.
The latest round of rumors were back in July (and earlier). Volpe's buy out price is too high, and I guess Siemens doesn't have the stomach for a hostile bid - and maybe can't afford it with the stock price already at $69. I should have figured when Valueact cut their DRC stake by 60% in June/July that a deal wasn't going to happen - they would know...oh well.
Interesting when I search for the latest news I saw this cached piece from Reuters that I previously didn't see (or didn't read correctly):
Siemens CEO says to focus on restructuring, not M&A
Reuters Jul 31, 2014, 02.07PM IST
FRANKFURT: Siemens plans to focus on restructuring rather than acquisitions for the moment, Chief Executive Joe Kaeser said after the German engineering group reported third-quarter financial results on Thursday.
"We just laid out our 'Vision 2020' concept.... the focus is clearly on operational improvement," he told analysts and journalists during a conference call but added that Siemens would have the financial firepower for acquisitions if the right target came along.
Well you see some of it...$18 in 2015 from here is a nice return. But if you look at comparables in the M2M business with ESYS's growth and profitability - the 1 year target should be in the mid-20's. The takeout value today is even higher. The main problem with this company is that the share float is too small. I wouldn't be surprised to see a $10 million+ offering in the near future - I think it would actually benefit the share price. A split might also been beneficial at some point. Anyway - if management continues to deliver on growth and product offerings, I could easily see the market cap reaching $200 - $400 million over the next few years - from the current $40 million.
The after hours activity (low volume) and the lack of news today make me think this action is a newsletter pump & dump...unfortunately.
I appreciate the entry level in the $12's...I'm half way where I want to be on this investment. I wouldn't mind getting the rest a little lower, if you don't mind. Congrats to those who got in at sub $4 and sub $8 over the past year and a half. I wouldn't mind a little dip to the $8's between now and year end - that would still be a double for you $4 investors - don't be greedy.
Thank you for your attention to this matter.