TX Rail Products Inc (TXRP)

[greasemonkeyshoes]

Quiet period for a waterlogged stock and work in progress company.....
Next progress report is on e7/23/2019."Can the management take advantage of price inflation and raise the long overdue margin expansion by 2+%??" are my questions,and hope says yes.
or
next milestone:
eps=.0015*4=.006(annualized) and pe=1.6
odds:
50/50.

[gadmo]

Back down to no volume again, can anyone post an update

[greasemonkeyshoes]

Give it few more weeks.....
we see what "price discovery" would bring us,hopefully in the low teens with plenty of liquidity and brought in new investors.Impact of trade war should have a strong bearing on the cost margin of txhg,can it passes on to customers somewhere between 0%-25%?Million dollar question to be answered next ER.
odds,margin increase:
-2%-0% delta,25%
0%-2% delta,50%
2%+ delta,25%
or
75% vs 25% in our favor to see a 2%+ margin improvement.A wishful thinking?50%.

[bb72mo]

Volume really picked up.

[greasemonkeyshoes]

Liquidity,liquidity,liquidity............
Around 1c,spread narrowing,"price discovery" at work.

[greasemonkeyshoes]

What you observed and the same perception has been going on......
for quite some times.What different this around is,we have at least one dynamic trader who believes the stock is worth @1c+.The question,will bid of 1c be driven back down to 0.6c,like the last round?don't know the answer,but i love the "price discovery",long past due.

[philltee]

Someone is trying to prop the price up at the bid...this stock is going to zero very soon imo. Only sells since the Q was released - I wonder why..

[greasemonkeyshoes]

Price painting contest between.....
0.66c,first painted,and 1.29c,currently painted with only few shares.
ps-bend over and make room for MM is OVER.WOOWW.

[greasemonkeyshoes]

ooopps.....
liquidity @1c,not @10c.

[greasemonkeyshoes]

I believe........
txhg liquidity has gained traction @10c,a good sign vs no liquidity,period,of past ERs.

[bb72mo]

I saw over million shares bid at 0.0089 today. That’s $10000 bid

[greasemonkeyshoes]

Drill down the q/q ER........
2q 2019/2018:
revenue
rail $1063k/$889k 20% increase
tool $45k/$206k 78% decrease
margin(cost):
rail 17% vs 24% 7% decrease
tool 21% vs 1% 20% increase
2 macro thesis applicable in 2019:
1 production comeback of "high quality coal";
2 trade war inflates price and improve margin
correlation so far:
1 yes,20% revenue q/q jump support the comeback:production of coal is on a move in the Appalachian region;
2 no,shrinkage of margin disproved "trade war inflates price and improves margin".
Is 7% basis cost increase here to stay(83%+ of revenue the new norm) or a temporary hiccup(before backing down to 80%-,historical norm)?how soon we see a 200+ basis point margin expansion??the million dollar question asked again and again.

ps-i can smell it opportunity is near,and "buck" has given his hardest fight waiting for a major margin break,will the macro thesis "trade war inflates price and improve margin" finally materialize and give him the eluded margin expansion he had been seeking since 2016?50/50 chance likely it starts next q.

[greasemonkeyshoes]

A solid q........
revenue up 2%
cost 83%(need work) vs 81%
sg&a 10%(woowww) vs 12%
operating income 7% vs 7%
net income 4% or eps=0.5c vs 4%
again,everything is looking good,with the exception of the 200+% basis point cost improvement still missing.

[greasemonkeyshoes]

A better question to ask....
I am willing to share my view,are they any good?And if not,why not the company any good??Plus,tell me something I don't know about the company,the good,the bad,and the ugly???
ps-in the land of junk stock,expect the unexpectable,any dynamic trader can move stock price either way,based on perception and before fundamental(later price-discovery) catches up.
or
ignore price action,focus on the merit of the company,to gain an edge on your wager.

[philltee]

Are you by any chance trying to push the share price up so that you can sell your shares?? It seems someone is doing just that...no other reason for this sudden spike then drop back down to original price.

[greasemonkeyshoes]

another tailwind/trigger.............
on the non-cash-inventory-gain(or loss) re-evaluation.
https://www.zerohedge.com/news/2019-05-10/trump-pulls-trigger-begins-process-raising-tariffs-all-remaining-300-billion-china

[greasemonkeyshoes]

"coal become the like of the new tobacco" macro view of Russel Clark.......
Horseman Global's Russell Clark podcast:
listen in at 1:02:00
https://www.zerohedge.com/news/2019-05-10/get-popcorn-ready-why-worlds-most-bearish-hedge-fund-thinks-biggest-crash-almost
ps-"specially the high quality coal".wooowwww.

[greasemonkeyshoes]

Cheap.....
pick up few more shares @1.5c.

[greasemonkeyshoes]

Last q/q comparison paints a different picture.....
q/q improvement:
400 basis point in cost
200 basis point in sg&a
My hope for this q/q improvement:
200-400 basis in cost
100 basis point in sg&a
Million dollar question,will it continue(at least 200+ basis point)??I believe so and my wager is on.
ps-your are correct,price actions agree with your prognosis,are you spot on or is general consensus behind the curve??We should know how wrong we can be sooner than later.

[philltee]

One salesman (with a huge proportion of profits going to his bonus) will never make enough money to even break even, never mind make a profit and even start making a dent in the debt owed to Buck. The coal industry is not something anyone would choose to go into at this point. There is nothing to suggest this company will make its shareholders a profit. Ever.
The bid and ask are already retreating once again.

[greasemonkeyshoes]

petite correction.....
"Buck now has one salesman, who takes over 50% of all gross profits he makes."
Your were sort of right(if you meant operating income) up to end of 2018.In 1q 2019,it dropped down to 46%( $38k/$82k) based on operating income, or 21%($38k/$180k) based on gross profits.
notes 1q 2019:
$82K operating income(mine)
$180K gross profit(yours)
y/y commission vs revenue:
2015 8%
2016 5%
2017 5%
2018 4%
2019 e3.5%??

[greasemonkeyshoes]

if there is material improvement of 200+ basis......
i believe you are most likely be wrong and miss out on an opportunity of long time in the making.

[greasemonkeyshoes]

I agree with you.....
"Buck" have had plenty of blunders in the past,at least he tried and thought he was thinking outside the box;it just that his strategy was so amateurish,all his past ventures ran aground except the rail/tool brokerage.
What is important going forward is he circled his wagons(rid of non-performing assets),regrouped,brokerage business only,persistent operational improvement,and positioned the company to fight for another day.No promises.
I am certain under performance of the brokerage business model was not self-inflicted,and rather due to horrific macro environment of 2015/2016/2017,he had no control of;now the worst is over and high calorie-coal is the king,"green shoots" are the coking coal,and the miners of Appalachian region are the biggest benefactors.
Summary:
I believe "Buck" learned his mistakes in the past,and most importantly he has learned the discipline to "SIT-TIGHT" and FINE-TUNE his brokerage business,without more blunders,and at the same time the tide/macro has turned into his favor.BIG TIME.
Hope:
Armed with CHARACTER,DISCIPLINE,"SIT-TIGHT",PERSISTENCE,plus TAILWIND,guess how strong his punch/offensive can be!Look to the future my friend.

[philltee]

In other words, don't assume that because Buck has put millions into txhg, that this is a wise investment.
I will be amazed if this isn't back below 1 cent within a month.

[philltee]

Buck thought it was a good idea to chase neuhaus for years, wasting hundreds of thousands of dollars in the process, even worse it took vital time away from focusing on txhg.
Buck also thought the bag rack would be a money spinner.
Buck spent years digging for oil, and managed 2 barrels a day at the peak of extraction. Txhg never made it as an oil company.
Buck now has one salesman, who takes over 50% of all gross profits he makes.

[greasemonkeyshoes]

ooops........
from
"monetary cost of each of his shares is 50c."
to
"monetary cost of each of his shares is 19c."

[greasemonkeyshoes]

who has the most incentive.....
and most money to lose if the company run aground?
"Buck",the ceo.
numbers,numbers,numbers:
shares owned 10.5 million
ceo put up $2 million bucks
or
if the company run aground,monetary cost of each of his shares is 50c.

was "Buck" blind and stupid to commit his own money to save the "unsavable" company?
Mantra from his company:
"Leadership is a combination of strategy and character" by General Norman Schwarzkopf
i believe the ceo/company always had more character than strategy and since 2016/2017,the strategy had finally caught up,and crushed the "unsavable" image,and all ceo effort prevails/appreciated.50%+ odds in our favor.

[greasemonkeyshoes]

hard data point i thought important to share......
from 10-q/10-k:
item 11: executive compensation
(1) Represents salaries paid during the years ended September 30, 2018, and 2017. Mr. Shrewsbury has elected not to receive salary in 2018 and 2017. Mr. Fuentes receives an annual salary of $104,000.
(2) Represent lease payments payable pursuant to a lease agreement between the Company and Mr. Shrewsbury and Mrs. Shrewsbury. Management believes that the current rental(of $24k) is below market value for similar warehouse and land space.
following is a new disclosure,more transparency,added to the last ER,
note 6 - revenue class
December 31, 2018 December 31, 2017
Revenue
Rail Products$ 904,783 $ 916,008
Mining Products 103,961 83,468
Total $ 1,008,744 $ 999,476
Direct cost of revenue
Rail Products $ 735,489 $ 778,452
Mining Products 93,207 81,002
Total $ 828,696 $ 859,454
or
q/q margin expansion
Rail Product 85%-81%=400 basis point(to 90% of revenue)
Mining Product 97%-90%=700 basis point(to 10% of revenue)
or
its business model generates higher margin for every accretive dollar in.
plus
Inventory realignment:
Year Ended 9/30/2018 9/30/2017
Mining $ 729,169 $ 878,628
Rail $ 1,069,371 $ 811,722
Total $ 1,798,540 $ 1,690,350

ps-again,my hope is to see a 200+ basis improvement,well overdue and well deserved to the longs.
ps2-is txhg a hedge(likely benefactor) from the impending trade war?i think so.Another 15% non-cash-adjustment gain from its inventory likely.wooowwww.

[greasemonkeyshoes]

my posting going back to 12/15/2017..........
"ER is out......
Work out the numbers for 2018 and upgraded its eps=1c,or pe=2,at the current price of 2c.Wooooowwwww.
ps-I'm buying."

More the change,more the same.Woowwwww.

[bb72mo]

Nice. Maybe news soon.

[greasemonkeyshoes]

pick up few more shares......
between 1.812c to 1.89c,based on price actions,and front running the ER.

[greasemonkeyshoes]

otc site.....
https://www.otcmarkets.com/stock/TXHG/disclosure
last 10q:
48 million shares
@14c,mc $670k
ps-dcth is a money losing dog,stay sway.
ps2-cmgo is comparable with txhg,adjusted for share count,but their earning is from other income(derivative),not good.

[poincianamike]

What’s the share count? Thanks

[greasemonkeyshoes]

this is no more..........
and hope for "BUCK",ceo of txhg.
https://app.hedgeye.com/insights/73348-cartoon-of-the-day-splat?type=cartoons

[greasemonkeyshoes]

I believe....
there are multiple buyers(5+?) this time around, instead of one or two,unable to sustain the last few breakouts and retreated.can we see 2c before ER?50/50.75/50 after a good ER,and may likely go as high as 3c+ into next ER.Wooowww.
ps-perception change is what i am looking for in this ER(most important that is),a must for our money making wager to work in 2019
ps2-perception of txhg is a dog with flea,will it change soon?the million dollar question.

[bb72mo]

For some reason this move is different then before.

[greasemonkeyshoes]

a better question....
would i add as margin improvement confirmed?YES.

[bb72mo]

Nice. How large is your position? Thx

[greasemonkeyshoes]

picked up few more shares....
between 1.5c to 1.7c to make my position whole.

[bb72mo]

Someone quietly adding shares.

[greasemonkeyshoes]

tailwind.......
for the Appalachian coking coal miners.
"HB 3144, also known as the North Central Appalachian Coal Severance Tax Rebate Act, creates a 35% investment tax credit for the coal industry in a form of a tax rebate that would offset up to 80 percent of the coal company's coal severance tax liability."
https://www.loganbanner.com/opinion/editorial-impact-of-coal-related-tax-breaks-starts-to-emerge/article_ec371709-d91f-5b1c-8a59-fc80c4dcb23a.html

"The company(Arch Coal) plans to sell the output from the Leer South complex principally into the 300-million-metric-ton-per-year seaborne coking coal market. Steel market consultants expect solid demand growth for seaborne coking coal over the next 10 years, driven by substantial steel sector growth in India and other rapidly emerging Asian economies. At the same time, we believe that global coking coal markets remain under-supplied following years of under-investment, with few large-scale projects – particularly in high-quality coking coal reserves – contemplated in coming years. Premium High-Vol A coals, such as those produced at the Leer complex, face a particularly tight supply outlook. With average seaborne coking coal demand growth projected at 1.5 percent per year, and assuming a modest annual depletion rate of 2 percent at existing mines, seaborne coking coal markets will require the installation of 10 million tons of new mine capacity annually, or a total of more than 75 million tons between now and 2025."
https://www.prnewswire.com/news-releases/arch-coal-commences-development-work-on-a-new-world-class-coking-coal-mine-in-northern-west-virginia-300795437.html

[bb72mo]

I agree.

[greasemonkeyshoes]

question....
what's different this time?i believe this ER would likely change the perception of most investors,based on earning growth,with 51%+ odds in our favor.

[bb72mo]

I remember

[greasemonkeyshoes]

just in case you're forgotten......
all breakouts in the past 2 years were false breakouts and ended in tears.

[greasemonkeyshoes]

i like that number.....
i am shooting for 5c or pe=5,eps=1c my hope.

[bb72mo]

Well I definitely hope this goes to 10 cents where was few years ago.

[greasemonkeyshoes]

I think this is what you missed......
turtle paced transformation(restructure) of the company since 2016/2017,e.g. rack-bag write-off and a lot more.

[bb72mo]

Interesting. Nothing for years and suddenly buying

[greasemonkeyshoes]

not sure......
a likely surprise of 200+ basis point improvement in gross margin?This is my hope.