Wednesday, April 23, 2014 10:21:58 AM
The BAD:
1. Do a Google search for Merle Ferguson and there are a few negative comments, issues, law suits, and other things of that nature.
2. The financials are NOT audited. I spent time digging through the financials and have found a few discrepancies. (This is not uncommon in the OTC. I've seen situations where discrepancies have actually benefited a company in the long run.)
3. It seems that the company has so many "irons in the fire" that they may be spreading themselves too thin. Always seems like there is just one more deal to be made...
4. There are outstanding legal issues that need to be remedied. (disclosed in the financials)
The GOOD:
1. As I pointed out above, Googling "Merle Ferguson" returns negative hits. However, Merle has been in the business of "doing business" since the 80's. I'm actually surprised that I didn't find more negative info. It is a good thing to see that he is making waves in the industry.
2. The company is reporting positive cash flows. Uh, hello? In the OTC, that's pretty much a unicorn.
3. The company has announced their plans to become fully registered with the SEC and have audited financials. (I've seen statements like this before, but GBHD is taking the steps to make it happen.)
4. LOCKED FLOAT! Typically, not having a large amount of volume is an indication of liquidity problems, however, that doesn't appear to be the case. There are buyers...just not a lot of sellers. Any significant push and the volume and PPS goes up.
5. NO PUMP! The company issues PRs, but they aren't fluff PRs. They aren't screaming from the mountain top "HEY LOOK AT US! YOU NEED TO GIVE US YOUR MONEY!". It seems to me that they are focused on organic growth.
6. They are keeping the Outstanding Shares in check. They issue shares for acquisitions and compensation, but they aren't fully diluting (900,000,000 A/S) and have retired shares. Shows good faith.
7. Based on the P/E ratio, the company is currently undervalued.
With all that being said, I put my money where my mouth is. I'm now a part owner of a successful company that is taking strides to remove themselves from the OTC. They appear to be composed of forward thinking individuals who have a desire to succeed. Is there risk? Yes, but I am personally willing to take that risk.
$GBHD
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