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.566 loose lips sink ships, but what does that have to do with JGPK?
Yep blows my mind. Only a matter of time.
Yeah, 8,600 shares sold for $0.64/share to $0.62/share.
I am a big believer and truly enjoy inefficient markets. ??
Someone sold 5000 @ .62 today. No idea why anyone would sell this less than $1.
Not sure why anyone would sell at $0.70, but thanks!
Yes, I agree.
This partnership will enable JGPK to increase its profit margins, add more customers, and low its risk.
I believe the partnership with Elastic Path could be a potential game changer as well, time will tell.
Yes, that is true.
Let's say company X (trading at $3 per sales) buys JGPK (trading at ~$0.25 per sales). It's immediately accretive to company X as long as they pay less than $3 per sales.
Until JGPK gets their PPS in line with the peer group, in my opinion, they are a "no brainer" acquisition target.
I think JGPK can accomplish this increased PPS by going on the Nasdaq and issuing more shares, but if not...
I think one of the things that has drawn my attention from not investing heavily is the slim margins in this business, and that's not to say that businesses don't excel with them(Amazon), but for me, its a microcap, the margin of error is extremely small vs a 140 billion dollar company in AMZN. I know that many are strictly evaluating on a p/s basis, and I tend to agree that the p/s metric should be used, however I guess I'm thinking out loud here that the margin of error is so small that any downturn in business is going to put extreme pressure on the company and stock given that opex is 98% of revenue.
"Meanwhile, traditional physical retailers such as Macy’s Inc. and Gap Inc. are turning to startups to make same-day or one-hour deliveries for them to stave off the threat from Amazon."
JGPK definitely a buyout candidate here.
Not sure if you guys heard about Amazon's new program in New York where they deliver within the hour. This sounds similar to JGPK developing program where they schedule the delivery time.
http://www.wsj.com/articles/amazon-com-launches-superfast-delivery-in-nyc-1418903192
For sure. If you don't include 2011 the EPS growth was somewhere around 25% over the past 5 years.
Intrinsic value = E X (2g + 8.5) X 4.4/Y
Intrinsic value =.05 X (2(25)+8.5) X 4.4/3.6 = $3.57/share
I believe once the story gets out there and gets more and more hyped up it could top $10/share.
Yeah, me either.
You all know I am not happy it's not a lot higher. I believe just their infrastructure warehouse network is worth more than a few dollars per share even without the software. I have valued this company multiple ways and not one method indicates it's worth less than $1.50 per share. The lowest valuation is based on its intrinsic value (Warren Buffet's number 1 tool) - ~$1.50 per share.
I have been doing this a long time and I have never seen an opportunity like JGPK. I truly believe anyone selling for less than $1.25/share will be really sorry one day.
Not sure why anyone would ever sell under $4/share. Growing, profitable company with ttm revenue close to $60m with a market cap of just over $10m, definitely under valued.
JGPK .769 with some vol. nice to see tax loss selling slide.
JGPK should be trading at something greater than $1.80 per sales versus $0.25.
Options:
1) get acquired or merge
2) move from OTC exchange to Nasdaq and increase its shares outstanding.
Simple steps to increase the share price from $0.72 to $5.4 per share. As minority shareholders we may need to place pressure on the management team. I think it's "low hanging fruit." Just compare JGPK with its peers.
I am amazed someone sold 500 shares for $0.56/share today. Must of really needed money quickly!!
You have to remember that most of the people that post to glass door are looking for other jobs and are unsatisfied with their current position in general. There are likely many more satisfied employees than the average shown on glass door. That being said, no company is perfect, and as long as they continue to perform with increased revenues and eventually EPS, this is a home run. Remember that both Vince Furlong and Daniel both founded paradigm communications before selling it, so they know how to grow a successful business from the ground up.
Reworded:
JGPK has some flaws that I think make it highly discounted. As stated before this is what I think makes it a good opportunity.
We are all searching for a small company with an extremely high growth rate, perfectly managed, low SG&A, great ROIC, low debt, better than all peers, etc.
And highly discounted! Please let me know if you can find one of these.
JGPK has some flaws that I think can be corrected and therefore I believe is highly discounted.
Yeah, this is typical of a really fast growing small company.
Again, if things were perfect the stock wouldn't be so discounted. A whale ecommerce company could solve all of these issues quickly.
From that blog mentioned.. Not Nice.. If it's true that they lie to clients,, then why would they be not the same with shareholders..??
Jan 13, 2014
3 people found this helpful
“Jagged Peak constantly changes their focus because they are a struggling company. ”
Current Employee - Project Managerin Tampa, FL
I have been working at Jagged Peak full-time (more than an year)
Pros
If you are a new in your field, you may gain a few months of experience in your area, other areas and realize what kind of corporation you do not want to work for.
Cons
Jagged Peak has a very high turnover rate, is unstable and burdens its workers with unrealistic workloads.
Organizational culture is always a function of the CEO and his executives, but it is absent here. Whatever they do, however they behave, sends messages down through the organization. Executive affairs, talk of a coup, partner mistrust over corporate spending, and self motivated decision making by the CEO may make you feel insecure about your position.
“Lower level employees are faceless numbers to executives and are treated like pawns in a chess game against each other and to clients”.
“Basically you’ll be fighting real hard to impress a new client and lose an existing client. Jagged Peak is very disorganized, has no respect of rules or regulations and confidentiality. The rules change as they go and decide who is excluded from them and who is not.
Getting caught up in the hypocrisy of Jagged Peak may damage your career more then build it.
Advice to Management
"Make up your mind what you want to do, where you want to compete." Jagged Peaks focus on "activity metrics" and "growth expectations" over "team morale" creates a "hostile work environment." Stop asking employees to lie to clients ignoring strong convictions to do the right thing and give the clients what they are actually paying for.
Yes, I hope so. Management has a fiduciary responsibility to maximize shareholder value - not unjustly enrich themselves even if they are majority owners. Minority shareholders have many rights that we may need to exercise if the share price doesn't converge to a more reasonable share price (based on its peer group).
We may need to take on a Carl Icahn type role. I think JGPK is "exhibit A" in Icahn's book on creating value.
They have to realize the way for them to get rich is by PPS appreciation. I suppose they are just working on growing the business.
Yes, I've read the information you posted - glassdoor, etc. interesting...
My read is JGPK's CEO is a really high tech guy without much financial background - never held a Wall Street investment banking type job. The CFO is an account, CPA not a finance person.
When I look at JGPK's the next steps to unlocking a lot of value seem obvious.
Agreed. I think a part of the reason they trade on OTC is because for the most part they weren't profitable until 2010. Manhattan associates is a similar company I found on the competitors tab of yahoo finance.
http://finance.yahoo.com/q/co?s=JGPK
They have price/sales of over 6, with the industry average of about 3. So yes you are correct. This should be trading closer to $9 or $10. What is somewhat concerning are the reviews of the workplace on glassdoor:
http://www.glassdoor.com/Reviews/Jagged-Peak-Reviews-E13989.htm
From a project manager -
"Jagged Peak has a very high turnover rate, is unstable and burdens its workers with unrealistic workloads.
Organizational culture is always a function of the CEO and his executives, but it is absent here. Whatever they do, however they behave, sends messages down through the organization. Executive affairs, talk of a coup, partner mistrust over corporate spending, and self motivated decision making by the CEO may make you feel insecure about your position."
Another review listed a con as:
"The CEO likes to yell at his employees / accuse them of "stealing their paychecks". He is a smart guy, but he could use some psychiatric medication."
This may sound harsh, but shows that the CEO isn't a pushover. Overall this could be a lucrative find, but may take some time as their costs are currently too high to show bottom line EPS growth.
Yeah, I also think SG&A is too high for their yearly revenue. This high SG&A, lack of liquidity, and trading on the OTC exchange discount is what makes JGPK an attractive acquisition target. Or they can fix these things themselves and get traded on the Nasdaq.
Take away these issues and I think JGPK should trade at a ~$3 per revenue multiple - ~12 times the $0.75/share. If all was perfect then I believe the price per share would likely be much higher and the current $0.75/share opportunity wouldn't be available.
I think it's a pretty easy analysis based on SPDC (and peer group) comparison. When all of these metrics are compared this is a logical conclusion.
Why is the SG&A so high? All they have to do is bring costs down and this stock skyrockets.
I've noticed that if I buy let's say 10,000 shares, in level 2 trading I see something like 3,000. 50. 2,000 50 etc until all the shares are purchased. Just buying what's available in "bucket 1" at price X then moving to "bucket 2".
Personally, I am not sure why anyone would buy/sell less than 100 shares with a ~$10 transaction fee.
Anybody take a look at the level 2 buys on JGPK? I see many odd small blocks being bought especially on 11/21. Any thoughts on this?
http://geoinvesting.com/companies/jgpk_jagged_peak_inc/depth
Yes, at a $3.1 per sales multiple versus JGPK's $0.25 per sales current market value.
http://finance.yahoo.com/news/speed-commerce-acquires-e-commerce-133000129.html
Not seeing a reason why JGPK couldn't be bought out as well.
Agreed. Although rare, uplistings do happen. A prime example would be Kelso technologies. Typically revenues are highest fourth quarter for Jagged Peak, so I am feeling good about my price entry and may buy more.
Yeah, let's compare JGPK's shares outstanding/float to SPDC (analog).
Share outstanding:
JGPK: 16 million
SPDC: 66 million
Share available for public trading:
JGPK: 4 million
SPDC: 16 million
I think JGPK's is being highly discounted due to low liquidity. Most of the 4 million shares the public has are not trading because it's held by long-term investors like me.
Solution: move to the Nasdaq (by being acquired or alone) and issue more shares.
Maybe I am missing something, but it's this large discount and potential option(s) that makes JGPK attractive to me.
I agree 100% and firmly believe the lack of liquidity is due to it being listed on OTC instead of Nasdaq. This kind of growth can only be ignored for so long. A similar company would be Netsuite, which is not even profitable but has a $8 Billion market cap.
I hope that will be the case.
Can you find another ecommerce company with better financial metrics than JGPK? p/e, ROIC, p/s, lower d/e, etc.? Try
Compare JGPK's metrics to SPDC (symbol). JGPK is better on every level and is trading for seven times less. The reason for this is two fold, 1) JGPK only has only about 5 million shares available to the public to trade and 2) it's traded on the OTC exchange - versus the Nasdaq.
Note, the intrinsic value of the company based on its peer group is at least 7 plus more, but is discounted based on things that can be changed. Management is smart enough to realize this and is taking a big part of their salary is stock (step 1). Step two is to make the changes to realize it's true market value.
I have been involved in many acquisitions/divestitures. When getting my MBA (finance) one of the HBS case studies was Amazon.com. Most ecommerce companies follow this business model and focus on increasing revenue and are traded based $ per sales versus price to earnings. Once JGPK gets enough scale, they can reduce its cost or get acquired by a company that doesn't need their expensive CEO/CFO and executives - this could be highly accretive to another much larger ecommerce company.
I could be wrong, but I think JGPK is real bargain at $0.75 per share.
We are not going anywhere until management converts top line to bottom line. I thought when management put up 5.8 percent or 650,000 shares they were going to do this but it hasn't happened yet.
All good questions.
I can provide you my experience working as an executive (another industry) for a relatively small high growth company. We ended up taking the company public, and it was a success.
JGPK executives (many founders) likely can get other jobs making as much or more than $300k/year working for larger ecommerce companies. Within these larger companies, the work schedule isn't your entire life like it's working for a relatively small high growth company. Also, the risks are much lower. Additional compensation (mainly stock options) are given to compensate for the additional risk.
Therefore, in order to retain management (willing to basically dedicate their lives and take on additional risk) and incentivize them, some type of stock is necessary. You want management to have a lot of skin in the game - they lose a lot if the business fails. The CEO needs to make sure his team sticks around (not looking for new jobs) while trying to take the company to the next level. Note, the upside stock potential (possibly trading at 7 times more when compare to its peer group) greatly over shadows current compensation.
Yes, optically the salaries look high, and so do the restricted stock awards, but when you consider all options, it makes sense - you don't want people that have taken the company this far to leave (and then try to take your clients). The bulk of management's value should be on the backend - the stock price.
JGPK recently has entered into partnership agreements to lower the risk of having a big client risk providing a significant percent of their cash flow.
http://www.elastic path.com/resources/news-and-events/elastic-path-and-jagged-peak-partner-streamline-ecommerce-order-process
Hopefully this helps.
Are you at all concerned that every manager makes over 300K? I mean with that high % of ownership shareholders are basically at the whims of these guys that all collectively make close to the ttm EBIDTA of the company.
From my perspective; If I make 300K a year, why would I need to grant myself options for a $.60 stock?
Not chastising wealth or income at all, just a concern of mine in relation to other companies I invest in. Also could be a plus if they were to get acquired as you could get rid of close to $1 Million in salaries right there for the acquiring company.
I agree though on the growth, the space their in, and their competitors trading at higher multiples. An additional concern is their % of revenue concentration to 1 company, any thoughts?
Yes, I agree. For me it's a long-term investment - solid financial statements and high growth rate.
I am looking for: 1) they get acquired (trading at $0.25/sales versus peer group of ~$2/sales) 2) Get on a better exchange like the Nasdaq with a lot more shares trading to the public 3) keep growing in profitability
The high percent of insider shares provides management a huge incentive to increase shareholder value. My guess is their senior executive have most of their net worth tied to the stock price. This is a good thing.
I think the reason JGPK is trading at a huge discount is due to the things mentioned above. Once these things are changed, the stock price will likely be much higher. Management knows this and is why they want to be compensated with restricted stock.
To see what is possible look at peer SPDC (symbol).
I would have preferred an open purchase with his own money rather than options. The extremely high inside ownership of this company and lack of investor communication is the one thing that hinders me from owning a real position in this.
CFO acquiring shares of the stock is always a good sign.
And Jgpk's financial ratios (ROIC, p/e,etc) are much better than SPDC.
JGPK is trading at $0.23/sales revenue. SPDC (peer) trades at $1.69/sales - 7 times more and JGPK has a much better product.
I believe JGPK's valuation is really discounted, and should trade $2/share plus within the next few years.
.75, gee Jan will be more real interesting.
Elastic Path Unveils Industry's Most Flexible Ecommerce Software for Adobe Marketing Cloud
Breakthrough solution eliminates the barrier between ecommerce and digital marketing platforms
Deal with JGPK
JGPK needs some "ink" from the "ilk", as acting like an "elk" running in woods after each rev. increase!
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