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Schneidku, If I could buy you lunch for that post I would. A truly excellent look back.
If you are the TASR CEO, how can you not be looking down the highway at VirTra HQ and studying the numbers and say to yourself that "I gotta get me that company."
It is about the only way TASR will ever get back to previous stock highs.
Good to see a smile! I just hope long time holders are smart enough to keep open and realize what is happening. The stock hasn't even moved yet.
Give VTSI the same PS, PE valuations as TASR and VTSI would be at 80cents to $2.00 right now. VirTra has better growth, better profitability, similar balance sheet, and better forward prospects.
Conservatively VTSI is worth 60cents right now. And it will get there soon.
Mad Catz has turned an important corner and MCZ stock has bottomed and turned as well. Easy double over the next 6 months.
It actually doesn't look so bad with respect to sellers. Sure, there are a few but the buying strength is stronger with deeper pockets (bigger bids). Also, if there weren't silly people willing to sell $1 for 50cents then the rest of us wouldn't be able to buy $1 for 50 cents. Or is this case, buy 60cents for 20cents. I really cannot fathom anyone selling this stock at this point in time.
That's almost real money! Why would anyone sell though? The company and stock are worth 2 to 3 times this price right now based on trailing results and will be 10 - 20 times the current price in 3 or 4 years.
Look what happened to HSKA daily trading volume after they did their 1 for 10 reverse split. I was in on that one....happily.
weeble, Normally I would agree with you that a reduction in outstanding shares would hurt liquidity but there are times with tiny company stocks when that is not the case. I've been through it a couple times where it worked great to actually increase daily volume (and valuation) after a RS. With VirTra, my thinking is simply that a RS would suddenly make all their earnings growth visible to the investing community and make their stock look like a viable investment. It could also help with an uplist if they want to go that route.
Few institutions or funds will buy an 18 cent stock with EPS of 2.x cents. Many will buy a $3.60 stock with EPS of 45 cents that will soon become 60 or 70 cents. Many would happily pay up to $12 to $20 with this sort of earnings and growth.
All that said, I am still expecting some sort of surprise (and likely a good one) in late July. This team has shown the ability to be smart and creative.
Good thing you added that last line!
There are really only a few things that will improve the company valuation and result in increased liquidity for shareholders:
1. A buyout or tender offer by somebody.
2. A reverse split.
3. Uplisting to a national exchange.
4. A reduction in the number of outstanding shares.
We all tend to get sidetracked on these boards with discussion points to fill time between real news and earnings reports. I enjoy speculation so I throw lots of stuff into the wind.
My basic belief (which is 10X more important than all the speculative stuff) is that Ferris is doing a fantastic job and is focused on the most important thing for both the company and its shareholders. Those being revenue growth, earnings growth, balance sheet strength. Very few companies and CEOs have a 10 year track record and future prospects as good as he does. I am happy to own some shares.
Hi Bill. On VirTra's website, click on NEWS near the upper right and it says proxy statements will be mailed to shareholders in late July.
Another thought I had is maybe they will do a large buyback of shares, even to the point of going into debt a bit. It would actually be super smart given the low borrowing rates. They could buy back $10mil worth of shares and take the share count down to 118million by offering to buy any and all shares at 25cents (for example). They could do it via tender rather than open market? With their cash generating ability they would still be debt free in 18 months.
Just some crazy talk while we await the proxy info.
Exactly right natstocks. They said "shareholder liquidity". That too struck me as a little odd. It is common to hear CEOs talk about shareholder value or benefit of shareholders but in 20+ years of investing/trading this is the first time I have heard "liquidity" in this manner. And it has been said twice in relatively short timeframe. Then, combine that with the annual meeting being moved from early May to mid-Sept and one really has to wonder.
To me it suggests some sort of MAJOR action or event that will provide an opportunity for shareholders to both enter and exit. Sure it could be something small and incremental like maybe a reverse split, maybe simply doing some investor road shows, an uplist to the OTC, but I doubt if it is any of those things. While a rs could accomplish everything, I doubt they will try again.
Thankfully, the problem is not revenue or earnings or cashflow or balance sheet or forward prospects. All are spectacular.
The problem IS the market undervaluing the company AND the very small daily trading volumes. And no doubt these two problems are intertwined.
The more I think about this, I truly believe a really big significant change is coming....buyout/merger/reverse merger? We will all know soon enough I guess.
billpr, I believe there is a very substantive reason for the meeting being in Sept rather than May. Personally I doubt if a reverse split will even be proposed. My guess is it is something really big and significant for both the company and shareholders. Perhaps we will be voting on a management-lead buyout, maybe a buyout by a bigger company, perhaps a merger with some other entity? I don't think the timing of the meeting is an accident or due to not having the time to do it in May. The market cap is only 28.4million and enterprise value is 25million so many possibilities exist.
Proxy package/info should be out in late July. Then we will know.
My guesses:
If Modern Round is a hit (I give it a 50/50 shot) then VirTra will benefit greatly simply from the money they will receive quarter after quarter. I would view it as frosting on top of the cake. Sort of a nice "kicker" each quarter.
The Gander Mtn thing never worked out because it wasn't a good fit for either company. Gander Mountain is in business to sell guns. That is the only thing they sell that they make money on (really!). VirTra's systems never had a chance there because they didn't help GM sell guns. Simple as that. VirTra AND Gander Mtn should have been smart enough to figure that out before even starting down that path.
Now my real wild speculation.....If Mod Round is even a little bit successful, they will do an IPO and become a public company on a major exchange. Then VirTra will merge into Mod Round and all our liquidity, valuation, uplisting issues are magically solved....and we all laugh all the way to the bank!
Have a great weekend Bill. (I am sort of serious about my last paragraph.)
Exactly right jmodified, I do the same (except I never sell VTSI). I look at VTSI several times a week. If I am in a buying mood and I happen to see a significant number at the ASK then I simply buy those shares by entering a limit order at a price slightly above the ASK.
If all I see is the 5000 at the ASK I typically will not buy. So I agree with your counterproductive comment.
Ruffieruff, I don't understand what you are saying or what you see to make you believe it and say it. My opinion is that almost every single VTSI trade is done via an ECN (electronic exchange) and that no so-called market maker (like NITE) gives 2 hoots about a tiny thinly traded stock like VTSI. If VTSI avg trading volume is 300k shares, that is only a dollar value of $60,000. No way would NITE or anyone else care about that since there isn't any money to be made on transactions or spreads on that tiny volume. 1/10 of 1% of $60,000 is $60.
VTSI-the stock is where it is purely due to supply and demand of/for shares. If I wanted the stock to be 21 cents tomorrow, I could get it there - easily, simply by buying and buying some shares, maybe 300k, maybe 500k, maybe 1 or 2million. Likewise, if I wanted it at 14 or 15 cents I could do that in a heartbeat (maybe) by dumping 1 or 2million shares at the market.
My point is simply that the price of VTSI stock is due entirely to buyers/sellers, people like you and I.
Exactly. As many say, "it took my stock 5 years to triple in a week."
Truly awesome post weeblewobble! Thank you for taking the time to write it.
I admit up front this is none of my business but do you own several percent of the company? Just curious.
Your post sort of also explains today's Modern Round connection in that it is a way for the S&W CEO to get a piece of VirTra, albeit a small piece. This too benefits VTSI shareholders.
weo1998, You sound like a bitter little poor person who has no understanding of company performance or stock performance.
The greatest thing any CEO can do for shareholder value is to consistently and profitably grow the company. That is exactly what Ferris has done and continues to do. Revenues and net income have been marching upward relentlessly and aggressively and balance sheet remains pristine.
If you don't think the CEO cares about shareholders, ask yourself who is the biggest shareholder and what is his CEO compensation. CEO owns a little over 10% and his salary/benefits are so far below market that it is assured that his interests align perfectly with shareholders.
And why do you post on the board of a stock you say don't own and imply that you don't want to own? Do not answer, we all know why.
Well said!
I think we are all simply going to have to wait until July to hear the plan that will be proposed. All we do know is that within the last month the CEO has mentioned improving shareholder value and improving market liquidity several times. That is truly a great thing and shows an understanding that the company is worth far more than current market cap. I think it also shows the CEO is concerned that such a low market cap (relative to company performance)leaves the company vulnerable to a hostile tender or takeover.
I do agree with you that the current share price has not seemed to be an impediment to winning contracts, orders, sales. Although none of us even know that for sure either.
Liquidity is a real issue. Look at today, less than 1/10th of 1% of outstanding shares were traded. Total dollar value of less than $30,000. That is a problem for MANY potential buyers of the stock and is reason enough not to buy shares for some investors.
I personally think talk of a RS is premature as their are many other ways to improve shareholder value and improve liquidity. Perhaps the biggest clue is the timing of the meeting. Maybe VTSI will not even exist by about November 1st? Maybe we will be voting on a takeover or merger at a valuation of $100million or so?
All good points. Sorry I missed the baseball reference, yet another reason I shouldn't read/type while sort of drunk.
Changing technology and competition and those sorts of things are not as big a risk as one would think. VirTra is certainly already among the industry leaders and who better to see what is coming than the industry leaders. Maybe it will be VirTra that puts everyone else out of business with the next great thing. Maybe VirTra will be big enough soon to simply snap up the next up and coming competitor. All sorts of positive outcomes are possible.
You are right Bill, companies this size do not belong on Nasdaq. However, VirTra continues to grow and it appears likely they will be over $50mil in sales in several years with net income that most $100mil revenue companies would kill for.
At this point, a double in VTSI wouldn't even get it to what I believe is fair value. It will be over 60 cents a share before you hit your 80th birthday.
Improved market liquidity can be achieved in several ways. The quickest would be receiving 1 share of TASR for each 30 or 40 shares of VTSI that we own. Another would be to uplist and make the rounds at 2 or 3 investor conferences. Could also buy back and retire 20 or 30mil shares even if they had to use their credit line.
Exactly right lolabean, the most important thing for the company and the stock is for management to continue to execute exactly as they are. Sure, it is fun and passes the time for many to whine about all sort of related but ancillary topics such as communication, uplisting, quarterly conf calls, etc. But really, the most important thing is continued strong profitable growth. That cures everything.
Now, just for fun.....
If VTSI was 50 cents today, the market cap would be $79million and the enterprise value would be $76million. So, what sort of company numbers would justify that valuation? I believe VTSI deserves some combination of PE=25 and PS=3. This suggests the company would need to deliver 2016 EPS of 2 cents and/or revenue of $25.3million. It appears likely they will actually deliver over 2 cents for the year and likely under 25mil in revenue. So, a strong case can be made for the stock being worth 50 cents RIGHT NOW. Before anyone starts pounding me about the PE and PS being too lofty, compare VTSI to TASR. I also give VTSI bonus points due to the quality and visibility of their customers and the timeliness of their product. I give them a few demerit points for not being on a major exchange and not having conf calls.
When will VTSI be worth $1.00? Same sort of logic. Here is my SWAG at what revenue and EPS might look like over the next several years:
2016 - $20million, 2.5cents
2017 - $25million, 2.5cents
2018 - $35million, 4.0cents
2019 - $42million, 4.5cents
2020 - $55million, 6.5cents
So, it would seem to me the stock price gets to $1 in 2019.
The problem with all this is so much can happen to change it. The good news is most of those things are good things...uplisting, Mod Rnd working out well, company buyout, stock buyback, retirement of shares, etc.
What is remarkable is that VTSI is still at this level when VirTra has left this level far behind in the dust. One can argue a bit about what the sustained growth rate is for VirTra but it is obviously in the +15 to +35% range and yet the stock is stuck with a single digit TRAILING PE. EV/EBITDA is so low that one cannot even find comparable situations. PS is a more respectable number but still below 2 and that is with +3mil (2cents/share) of cash on the balance sheet.
Trading volumes remain remarkably low. I will never fathom why it doesn't trade at least 1.6mil shares per day as that is only 1% of outstanding shares.
Eventually all these things will change for the better and we will all look back at 17 cents and wonder why we didn't buy more.
Nearing May-end. Time to check if Mod Round is now open. Positives abound.
So about 2 or so hours before the close I saw 7500 shares at the ask at .166 and the bid was .165 at the time. I entered an order to buy 10000 at .167 and I got the 7500 shares immediately (at price of .166) and I never got another share the rest of the day. Immediately after I got the 7500 shares, the Ask popped up to .171 and the bid showed .164 even though I still had an open order to buy 2500 at .167 for the rest of the day! Not another share traded after my 7500.
(I know, 10k shares is nothing but I simply throw them on top of the ever growing pile. Just thought it sort of interesting.)
I think those are the clowns that sold today. They jumped in Friday in the .17s and then when it didn't immediately keep going into the 20s this am they bailed out. Even the volume supports this argument. None of those clowns had deep pockets, maybe 500 or 600k shares bought/sold this way.
I agree! and I'm not a 99%er. ha ha
Today is the perfect example of why 1% of stock market participants make 99% of the money. Some fool wakes up today, yawns, does a double take and says "wow, I can bail out of VTSI today and pocket a couple thou!" Then he proceeds to sell.
Probably doesn't have a clue about company performance or valuation of the company/stock. Really dumb.
Hey there greens12, I didn't think IHUB allowed someone like you to post. You might want to be real careful about crossing into defamation land.
But anyway, I hope you do realize that most all of VirTra's sales and dollar amounts and customers and installations are easily verified since they are all public customers....police departments, cities, State governments, US Federal government, US Customs & Border Patrol, Secret Service, etc. Easily verified. Also has systems in a half dozen Gander Mtns for the public.
And a note for Bill. Work on your math, 158mil divided by 100 is 1,580,000 and not 1500. I voted FOR the last one and they needed 66.67% or more FOR votes to pass and it failed by a couple percent. It was stupid of them to go for 1:100, should have tried for 1:20 or 1:10.
No fears, VTSI will be well over 45cents within 2 months as every valuation method such as PS and PE and EV/EBITDA easily support share prices of between 45 cents and 1 dollar. Current share price is a gift, take advantage. Also consider this, if VTSI is not at a much higher share price within a month or two none of this will matter because they will get taken out by either a larger fish or private equity. Ferris and insiders do not have enough shares to stop it.
natstocks, That is a really great well thought out post and echos my feelings perfectly although I will likely be buying even more shares over coming weeks.
While a $6mil quarter with $2.4mil net income seems huge right now, I think within 2 or 3 years it will seem small.
Your point is a good one and correct. The good news is what the CEO stated in today's PR right near the top: ".....market liquidity." Seems clear what he is saying.
My take is that he cares about shareholders, understands that not being on a major exchange is holding the company/stock back, and that he is planning to address this soon.
Oops, me bad. For sure Ferris didn't sell any. Likely just a shift to another family member or into a trust or something....or maybe a typo (copy) from last year's mid-May report.
I love your enthusiasm and agree with about 95% of what you are saying. I apologize if I tossed a pebble! You can throw a rock back, my head is hard.
Your info is old, he owns over 16mil shares. If you read the reports on the VirTra website, it is always an easy to find number near the very end.
Then "break it." Simply enter a market order to buy 500k or 1mil shares. It costs about nothing as 500k shares is less than $100,000 dollars. Peanuts.
Sorry, but I think you are mis-guided if you think Nite owns any shares and is selling any shares. Nite is nothing but a middle man computer that executes trades that others enter. There are no longer market makers for these (or just about any)stocks.
VirTra has just about never had any debt. But anyway, I suggest everyone go back and reread the PR and think about what was said.
First: tremendous revenue
Second: tremendous bottom line profitability, 1.5cents/share
Third: look at the cash generation, well over $2mil for the Q
Fourth: Read the what the CEO said...market liquidity, says to me he cares about shareholders.
Fifth: They did not talk about a "one of" quarter and made no effort to downplay forward expectations with talk of lumpy quarters.
I could go on forever but you get the drift. Newcomers to this party don't realize that VirTra is the real deal company with audited financials and consistent sustained year over year profitable growth for a decade now.
The other thing to keep in mind is who VirTra's customers are....cities, states, police departs, fed governments, international. Point is, all is in the public domain and all have the money to pay. No secrets with this company, everything is in the open.
They are sort of like Taser before anyone heard of Taser.
That net income is 1 1/2 cents per share FOR A SINGLE QUARTER. And look at the cash generation!
Stock is now worth over 50cents.
Buy buy buy. Anyone selling is a fool. Q1 net income was 1 1/2 cents on tremendous revenue growth AND CASH GENERATION. PE of 20 on this single quarter says stock should be 30 cents......x4 quarters and 1.20.
Wow wow wow.
I sort of thought the Canada order was just a wee bit under $1mil, something like $967,000 which is maybe why no PR, but I really don't know for sure.
Earnings should be out either before the open tomorrow or else on Monday before the open since the 15th is on a Sunday.
Pretty easy comparisons verses the year-ago Q1 so that should help. Good luck to all of us.