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When will people learn not to sell shares unless they see a bid? Hopefully that person learned a valuable lesson.
Of course, as silly as it sounds for a penny stock, from a chart perspective the dip today was a beautiful thing since it filled the gap!
Always a bright side.
Well it would certainly help. There are more money managers that can buy OTC stocks than pink sheet stocks. And it really doesn't take too many to make a difference. Even if only 1 fund wants to take a position, it is likely they will buy at least $500,000 to maybe $1.5 mllion worth of stock. That is between 2million and 6million shares. It would create steady buying interest for awhile.
The more eyes on VTSI the better.
Whoever sold me 32,200 shares at 9cents today I thank you.
Exactly right Bill. No one has heard of VirTra and no one has heard of VTSI. Furthermore, even most of those that have heard of VTSI (namely brokers/fund managers/small cap managers) are forbidden from buying it due to share price, pink sheets, etc.
Schneid, How many shares have you bought today? That's probably your answer. I did add about 20,000.
And this has nothing to do with the 40mil IDIQ! All I can say is the only objective of anyone with VTSI stock right now is to buy as much as you can so you own as much of the company as you possibly can.
You do know that the Donna M or whatever the name is of the person filling the CFO role that it is just a part-time position as she fills a similar role at 1 or 2 other companies I think.
I think it is good for them to have a full time dedicated controller. Especially given the nature of their business. Big $ systems in all parts of the world and big multi-year contracts. Easy to mismanage the money if not careful.
Not just maintenance/upgrades. The one contract also includes one new 300 system.
Good post Schneidku. I just look at this sort of stuff as a necessary part of being in business and taking your own business seriously. I would worry (a lot) if VirTra wasn't doing these types of shows/demos. There are also many intangible benefits to being at one of these shows - they (VirTra) get to see the competition, get to hear first hand feedback, meet other professionals. It is also a great chance for employees (like engineers) to be on the front lines of the sales cycle and see first hand what the marketing and sales guys deal with every day. If some engineers do man their booths, the credibility level jumps up tons.
I mostly agree with you.
In the case of most stocks, I consider LIQUID to be avg daily volume of 0.5% of outstanding shares or more. So, in the case of VTSI, that would be daily volume of about 790,000 shares. I really like it when avg volume is 1%.
I will agree with you that PFIN, SGMA, RCKY, EMMS are each well below even my definition of liquidity. That said, of these 4, about the only one that is really NOT LIQUID is PFIN. It is relatively easy with all the others to accumulate a position equal to 1% of outstanding shares over a very short time with only moderate care.
I just grabbed those tickers from my portfolio lists. I should have opened my spreadsheets for better examples but I think at this point we have each made our points and understand the others position and views. That is helpful to me. Thank you.
You can answer your own question with any good screening program. Here are just a few that I have owned/traded on and off over the years along with # of outstanding shares:
PFIN 3.6mil
SGMA 4.2mil (good buy now if you have patience)
BNSO 4.9mil
NAII 6.8mil (own now, great buy now)
HSKA 6.9mil (8 bagger for me, check out their reverse split - $$$)
RCKY 7.4mil (decent div play right now)
HH 8.7mil
EMMS 11.0mil (own now, decent buy right now)
I don't mean to argue with you and I generally like your posts and viewpoints as they are helpful to me regarding how people view VTSI.
ztect, I understand exactly what you are saying. You simply need to understand you are wrong. As long as a company has more than about 3million shares outstanding there is no significant correlation between number of shares and liquidity. The R-squared on the correlation for the 3000 stocks in the Russell 3000 is way below the statistically significant level of about 0.9.
It really was a crazy good day for me. NAII, CNAT and a few others.
ztect, Perhaps you mis-spoke but you said..."Then any R/s wouldn't be for price qualification........more favorable share structure (less diluted OS) and....."
I understand the point you are making but I hope you understand that a reverse split or forward split does not change the percentage of the company you own with your current number of shares. In other words, if the company forward splits to have 300million shares or reverse splits to have 40million shares, you will still own the same percentage of outstanding shares as you do today.
Someone that owns 1% of the company today will still own the same 1% of the company after any stock split. Splits do not dilute.
Spectacular post Nicole. Very nice that VirTra is named within the heart and soul of the article. They should be able to get a little marketing mileage out of it.
The new elephant in the room is yesterday's earnings report. Grand salami! This elephant will quash all. NAII is a $25 stock.
I agree with your conclusion and there is also some truth to it being a hated sector. But again, that is why there is an opportunity. With every company and every stock there is always something to hate. With VTSI it is the size of the company and the fact they trade on the pinks. With NAII it might be the sector and somewhat fleeting nature of those types of products. However, that is why we can buy VTSI at 20 cents and why I was able to buy NAII at 6 less than two years ago and then more at 10.3 last week.
Enterprise value at today's close is $27million which is about equal to 2017 revenue. Trailing PE is now sub-8.
Everyone unhappy about the CEO failing to "promote" the stock should be grateful the CEO is focused on what is important - running the business and growing the business.
You should also be happy you have the opportunity to buy the stock at this sort of price. I was off-grid the last couple days but will most certainly add some shares tomorrow if any are for sale.
By the way, if you really want to see a mispriced company and example of how even a stock with decent volume and on a national exchange can be grossly mispriced for a very long time read the NAII earnings report released after today's close. Then, guess what the stock price should be based on that report, then look what it actually is. I'll give you a hint, less than half of what it should be. Sound familiar?
Meant 1mil at 20cents vs. 50,000 at $5. Apparently I too am math challenged today - sigh.
I will never understand why people like so many outstanding shares. Seems to me that many here (IHUB) feel richer owning a 1million shares at 20cents than if you owned 50,0000 shares at $3? The most excited I get when researching a new stock is when I love most everything about it, especially when it has less than 10million shares - like an NAII for example.
And why do you guys believe shareholder liquidity has anything to do with the number of outstanding shares? It doesn't. That has been proven over and over in the US stock market. The only exception to this are the very extremes, share prices above $1000 and below 1 cent.
And it also seems some here really have no idea how exceptional the company is performing now and has been for a number of years. That sort of performance is rare in the stock market and deserves to be rewarded with valuation multiples that are better than market.
I guarantee (wish I could) there are many buyers out there chomping at the bit to buy VTSI shares but cannot due to the reasons I mentioned. After the split and after the uplist the stock is simply going to go up and up and up to levels few can imagine.
Hi weo. Interesting opinions you have. My opinions disagree with most of yours. The split ratio has nothing to do with trading liquidity. You can see that today in crystal clear terms since the company has 158mil outstanding shares and daily volume is essentially zero. The problem is not the number of shares or the performance of the company. Read that last sentence again because it is important to understand. The company's track record over the last 8 years is really good, current performance is spectacular, outlook has never been better. The reason the stock is at 22cents and not 60 cents is because funds and institutions and money managers cannot buy it. They cannot buy it for mostly 3 reasons.
First, the share price is well below $5 or $2 or $1. Many institutions/funds can't touch such a stock.
Second, the stock is not listed on a major exchange. Many institutions/funds therefore cannot touch it.
Third, the company's market cap is sub-$500mil or sub-$100mil or sub-$50mil. Many institutions/funds cannot buy a stock in a company this small.
Getting it listed on the OTC or Nasdaq via improved BOD/SEC reg/reverse split will solve the first two problems. The third problem will get taken care of by the first two problems being solved and ultimately over time via company performance.
There is no uncertainty. No CEO is ever going to put out a detailed milestone plan with dates. Ferris outlined the path in crystal clear terms yesterday in more detail than most companies would provide. They are obviously committed to carrying out this plan. I disagree with you regarding an insider posting on this message board. I have read every post on this board for over a year and have yet to read anything close to insider info.
Whether RS makes the share price $2.50 or $5.00 will not make a ton of difference. That said, it is easier to make a stronger case why a $5 price will result in more daily trading volume than a $2.50 price.
I own 4 or 5 other stocks that have revenue in the $50 to $200mil range yet have total outstanding shares in the 3mil to 8mil range. Each of these have trading volumes that average about 1% of outstanding shares per day. That is a healthy volume and I believe that one way or another it is going to happen for VTSI as well. I have also been through 5 or 6 reverse splits over the years and even though none were done for reasons as good as VirTras, every one worked out extremely well. EMMS is the latest example. HSKA was one of the best as was OTIX.
As long as it is 1 for 10 (or higher) then I am all for it. 1 for 5 would be sort of silly since you lose some of the benefit of making EPS a more visible number and lose the advantage a higher stock price may have on some customers. 1 for 10 sort of feels right to me since they would end up with 15.8million shares which is about right for a company of this size. I would also be fine with 1 for 15 or 1 for 20. Though it really doesn't matter to me. Remember I voted FOR the 1 for 100 a number of years ago. If I owned all the shares then that I own today, it would have passed! Really.
No, they would not say what the ratio will be.
The "6 to 9 months" is my estimate based on what I heard today and what I've experienced with other stocks I've held over the years. Perhaps it will all happen sooner/faster? I am guessing that timeframe because he did seem fairly certain of attending investor conferences in 2017 and the fact they will start with the quarterly cc's when full year 2016 is reported.
It is also meaningless in my opinion whether a person likes or dislikes Ferris. All I truly care about is increasing revenue, increasing EPS, and keeping a pristine balance sheet.
That is what they just did.
Bill, Someone has to physically do the work of filling out the forms and making the submission and follow-ups. He said as much as he could today on a number of topics and did a nice job with the questions. Companies never ever issue a PR/transcript of annual meetings. It is extremely rare that one is even webcast as VirTra was nice enough to do today.
Think about everything more we know right now than a few hours ago. The most important of which is that VirTra is going to uplist and pursue institutional ownership of their shares. This also tells us business is good and the outlook is strong for the business. What more could anyone possibly want.
And I forgot. They did say there would be some road shows/investor confs in 2017 in order to boost institutional ownership. I think we just learned that the reverse split and uplist are gonna happen within 6 - 9 months.
Wow, we learned quite a bit in the just completed shareholder meeting! Awesome really.
- Quarterly conf calls will start in 2017 with the late March FY2016 report.
- BOD is close to greenlighting the SEC registration.
- They will reverse split and uplist to OTCQX.
- VirTra owns 5% (1.7mil shares) of Mod Round today and value it on the VirTra bal sheet at $137,000 which is likely soon to be too low. VirTra has options to purchase 1.8mil more shares at 20cents each.
- Did I understand him correctly to say VirTra will get a royalty stream equal to 7% of Mod Round revenue? Holy Smokes.
- Sounds like most of the 40mil IDIQ stuff is in the next 3 or 4 years since not much awarded yet.
I wish some of those in attendance had asked questions. Then Ferris would have had to go off script a bit. Maybe during the social hour right now someone will learn something and post.
The 750,0000 shares you mentioned were options with a strike of 21 cents. Not open market buys.
Mad Catz sold one of their brands to Logi for $13mil cash which wipes out all of Mad Catz' debt so that together with the RB4 buy out puts them in a decent cash situation and in a great situation for the upcoming Holiday season.
MCZ is worth about 50cents today, not 23cents.
It's probably in yesterday's press release. I sent mine to vtsi@finprofiles.com and also cc'd the CEO Ferris. When you do send them, ask for a reply to indicate receipt.
Good catch bborden!
Also great to see VirTra issue the late day PR today with details on how to watch the Friday shareholder meeting! They definitely want eyes and ears on this one. Bodes well I believe.
I just wish I could type as concisely as you. I am far too wordy, good thing I type fast. Every quarter VirTra tells us exactly what the expenses were for the just completed quarter or fiscal year. Expenses are actually lower now as a percentage of revenue than they were when VirTra was half this size. This is clear if you simply compare the GAAP net income numbers. Your point though about .40 and .04 is a good one and I think it is a lesson everyone should heed with respect to VTSI. Right now VTSI is at ".04".
I don't personally know Ferris and have never met him. What I do know is that he has delivered on everything since I started following about 7 or so years ago so Yes, I do like him. Also, I believe Ferris is a much smarter savvier CEO and better manager today than when he founded VirTra. He has learned a lot from several mis-steps. No way would he ever do the Duchess financing deal again, the way the Modern Round relationship is nailed down shows he learned from the Gander Mtn fiasco. His communication to shareholders today is better than it was even 5 or 6 years ago. The steps he recently had the company take to ensure the outcome at Friday's shareholder meeting shows me he learned from the failed rev split effort of several years ago. I'm not saying he walks on water, simply that he is obviously smart, has built a strong company, and has learned and improved from his mistakes and successes.
With respect to stocks, I factor many things into my buy/sell decisions and am probably more of a "gut feel" guy than my posts would lead you to believe. I have had many expensive lessons along the way, especially back in the day when you had to trade through a broker. I place a ton of importance on what a company says in its press releases, earnings reports, and ccs and I always believe everything a company says. I am a big believer in PS and EV/EBITDA as valuation guides. PE is not very important to me. I also am a big believer in charts and believe they are the best indicator of sentiment and NOT self-fulfilling prophesy. I've been a stock picker since about 1990 and followed the markets on a daily basis since about 1973 when I was very young and my great Uncle would pay me one dime and one KitKat bar for sweeping out his tiny garage-sized sheet metal shop. No one else in my family cared about stocks/the market so I haven't a clue as to why I did - other than my love of money. Holding it, feeling it, counting it, stockpiling it, now spending it, etc. I still love money - but get far more excited about deer season and bird hunting starting 1 week from today.
Yea, it's sort of a crummy weather day....one minute sunshine, next main rain from a dark cloud, then repeat. I agree with you that it is due at least partly to no one hearing about VirTra AND the fact that most people are lazy and see a stock price of 20 cents and that is the end of their research. But it is also due to very very few funds/institutions being able to buy a stock with a 20 cents stock price and this small of a market cap.
It is always a puzzling thing why a stock is undervalued. It is until is isn't. Right now I can find a number of good quality companies trading for valuations on par with or perhaps even lower than VTSI. One good example is NAII. Then there are bizarre situations like STRI where the company's net cash is worth about 4X more than the company! But with STRI it is because their business seems to be fading. But with NAII no good reason. A company like RFP is trading at an EV/EBITDA of 4. Crazy. UVE trading at a EV/EBITDA of sub-1 for many years until it suddenly went up multiples. What was the trigger? In that case, management buyback and retirement of shares and an obvious dedication to shareholder value. Same sort of story with FIZZ from a few years back.
Ok, sun back out. Now have to figure out supper.
Just think about it: VirTra blew through the $10mil rev hurdle LAST year (FY2015) and will blow through the $20mil rev hurdle NEXT Year (FY2017)!
And they were/are able to do it profitably, with even expanding profits, and while growing cash on the balance sheet!
Correct Bill, there is no guarantee of consistent growth. However, every single shred of evidence in front of all of us strongly suggests that 20 - 30% year over year growth IS going to continue.
The $40mil contract provides a nice foundation and makes it easier than pre-contract.
The 3 Modern Rounds that are going to open each and every year for the next several also help.
The fact that VirTra has now had significant wins with key important customers (US Customs, Secret Service, Canada Military, some Mideast countries, Key police forces, etc.) and delivered on those wins makes it easier going forward.
VirTra has blown through the $10mil/year hurdle that many companies seem to struggle with and looks like they blow through the $20mil hurdle during 2017. The next hurdle after that is $50mil.
VirTra continues to innovate as their product line grows and evolves and improves. Their IP portfolio continues to expand. Easy to read the filings and promo sheets.
Then look at the breadth and scope and number of the jobs posted on the VirTra site.
Ok, I'll stop. Point is, all the evidence in front of us says VirTra growth is far more likely to continue and maybe even accelerate over the next 5 - 10 years verses the previous.
That is the power of a consistent 20% grower and why it is rare for any company to pull it off over the long term as VirTra has and is doing.
One looks at 12 to 33 and says 'wow, that almost tripled'. Yet that growth rate was only about 22%/year for those 5 years. That is why if VirTra simply continues to grow as they have been growing, there will be zero worries/concerns about the stock. And it will not matter what they do in terms of uplist or rs or cartwheels or anything else. Consistent, relentless, profitable year over year growth will take care of everything. Always has, always will.
Going from 12 to 33 is a little over +20% per year growth. There's that pesky 20% number again.
Twister, There is no uncertainty. Every 3 months VirTra announces revenue, earnings, and full financial statements for the quarter and year to date. Even if they did nothing more than continue to do what they have been doing for the last 8+ years (growing revenue and earnings at 20% per year and building cash at the same time) the stock will do extremely well going forward.
Hi Bill, The questions you alluded to in your post I have submitted via email for the shareholder meeting and I asked them point blank. A guy from Fin Profiles replied and acknowledged receipt of my questions. So if they are not answered it isn't because they were not asked.
I do take a bit of offense at you saying my revenue and earnings predictions are pie-in-the-sky. I simply used 20%/year, same as they have averaged for the better part of the last decade. Had I used 50% per year then I would agree with your characterization. Had I used 10% per year that would have been stupid based on the proven track record. VirTra at $20mil per year has a far better chance to grow at +20% per year than they did when they were sub $7mil in revenue and couldn't even get people to listen to them.
As far as stock price, it is going to happen. They simply need the split and uplist and a few phone calls/visits/presos.
When you look at the pace of revenue growth, earnings growth, and balance sheet improvement over the last 5 years and extend that same sort of performance forward for several years it really makes today's valuation seem silly. As the CEO said, VirTra is at least a "20% grower", +20% for 5 years gets one to about 40 - 45mil in revenue in FY21 and net income of about 7 to 8 cents per share.
It is also pretty easy to put together a case for why the next 5 years will show even more growth than the previous 5 so I believe 20% might be conservative.
This is why I believe the only objective of any investor right now is to buy all the shares they can regardless of price as there is no practical difference between a price of 15 cents or 30 cents at this point.
VTSI right now reminds me of another tiny company I worked with back in the early/mid 1990s called Stratasys. When they were about $15mil in sales they came in and gave their pitch and pushed their stock a bit. I bought some but figured by that point everyone in the world knew about them. I had it exactly backward, no one knew about them. I gave up on the stock a year or so later for a small gain only to watch it go up and up and up over the following years. Could have made 30X my money instead of +30%. All of us here are very familiar with VirTra and VTSI but I guarantee it is an unknown company and unknown stock. That will change. The steps are in progress.