Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Crickets... will get more aggressive if we don’t hear anything this week.
Sent a note to Sam this evening checking in on the status of the Q1 financials. Will let everyone know when and what I hear back.
Not worried about the report. I think they will come back down from the monster Q4 results, but I still think the financials will be strong. Last year's report was filed on the 20th, though there was a notification filed that it would be delayed to the 20th. I would expect it in the next few days, if not, then maybe it would be time to start reaching out to the company.
Tragic events in Brazil with the mine dam collapse. Prayers to all those involved.
Will likely mean more regulation in Brazil as this is the second collapse of this type in the past few years and potentially more supply required from other areas.
I have updated the iBox with the latest financial information and included a valuation sensitivity that shows the implied valuation multiples based on various share prices. I would think this business could fetch 5.0x EBITDA plus if it were to be sold to either a strategic buyer or a financial buyer. Obviously higher if to a strategic.
New article on seekingalpha highlights the absurd valuation.
You could be right. Here is a job listing for a regional sales manager for Arcoweld...
https://www.seek.com.au/job/37869078
Alloy Steel International (ASI) is a fully owned Australian company specialising in the manufacture of wear resistant products suited to all industry segments, our locally produced product range includes ArcoPlate, ArcoBlock & ArcoTuff families of products sold locally and exported to over 15 global locations with over 35 years of market leading expertise in advanced tribological technology.
Arcoweld is a start-up division of ASI focused in welding services and products for repair & maintenance of industrial components providing tailored solutions to surface engineering. The company aims to specialise in weld reclamation and cladding overlay of components typical to medium / heavy industrial segments. Additionally, our focus is aimed at growing the retail trade of welding products.
Most of their pretax income is generated in Australia, where the corporate tax rate is 30%, so they will not benefit to the same extent as other US based companies as a result of the tax law change. The key will be to generate as much income in the US as possible, both to use the NOL as well as to get the lower tax rate. I believe some legislation is being proposed to lower that for smaller companies, but not a tax expert...
It's hard to tell, but it could be a variety of things:
1. Mine build-outs at all the major mining companies as referenced in some of my prior posts.
2. Expanded distribution in the US and North America with Martin Engineering. A higher portion of revenue came from the Americas. Actually had positive operating income in the U.S., where they have a nice NOL to shield any taxes for some time.
3. Less concentration amongst customers - top customer only 9% of revenue
4. Expanded service offerings, including wear billets and ceramics in addition to the laser and water-jet cutting services I mentioned a few weeks back.
It does appear as though Q1 should have another healthy sales level as finished goods inventories are at elevated levels and that typically signals solid sales in the next quarter.
Glad to see they are actively working to grow the business and that results are hitting record highs (at least in Australian dollars).
Sounds like there continues to be interest in the Indonesian land, but they need to sell it already...
On an Australian dollar basis, these figures are record results for the company. Congrats to the Kostecki's
WOW! Big quarter from AYSI - $9.6 million sales and $0.125 per share in earnings. Wonder why someone was selling earlier this month, their loss is my gain.
Agreed, I'm not sure what that transaction was about. I'm not a legal expert and wonder if anyone here is. I know they mention in their filings that they received an opinion from their auditor on the transaction, but the filings and audits were never clear as to what the economics of the transaction were...
Has anyone even tried to pursue a legal action against a company on a related party transaction as a minority holder?
https://corpgov.law.harvard.edu/2017/08/30/controlling-shareholder-related-party-transactions-under-delaware-law/
I've been buying more shares here below $1. I think this is all due to tax loss selling. A year ago we were sitting at $1.50 per share. Since then, they've reported $0.13 in EPS for the first nine months. The company will report Q4 results in mid-December and I expect another $0.04 - $0.05 EPS quarter. Cash should rebound nicely here as there is a significant amount tied up in inventory and A/R, which should come down to more normal levels. I'm expecting them to finish the year over $13 million in cash, or $0.75+ per share. Assuming they can sell their Indonesia land at just $2.5 million, you're basically getting the operations which generate $0.15 - $0.20 per share in earnings and cash flow a year for free at these prices.
Of course, the key here is that the company needs to actually provide the shareholders some of that value, whether it be through a sale or through a dividend.
They are not holding pat though, they have been actively looking to monetize their equipment for Arcoplate production in different ways, including setting up a separate business that focuses on cutting metal using their specialized equipment:
http://www.sprintcutting.com.au/
They set up the business name back in 2017 and look to be up and running. Doing a google map search of their headquarters show both the Sprint Cutting logo and Arcoplate logo on their building.
http://www.abr.business.gov.au/ABN/View/98094428887
Looking at this site, it appears as though they've set up another business, ARCOWELD. We'll see what this business will do, but I expect it will be similar to Sprint Cutting in which they use their equipment for other uses.
I checked their website today and I haven't had any issues with malware, etc.
Within the industry, expansions continue, with Vale looking at increasing production from their largest mine in Brazil. Iron ore prices remain strong, so I'd expect AYSI's results to continue to be solid.
RUBI/PERI - It might be helpful to research why it fell off a cliff, why it's coming back, and why investors and management feel it will continue to come back both in the short term and long term. Markets and valuations are forward looking. I'd rather buy a business at the same EV that has a cash pile/no debt and is projected to grow free cash flow with strong industry tailwinds, than one which has debt and has more free cash flow now, but declining.
Appnexus was bought for $1.5 billion, RUBI should be worth more than 5% of that...
This is what makes a market.
RUBI - I've actually been a buyer here since the mid-$2's. There is one simple difference between the two. Growth.
RUBI has turned things around and is anticipating 20%+ top-line growth and EBITDA margins going to 25%+ long-term. With $100 mil in cash in the bank and an NOL worth $60 million, a market cap of $200 mil means its trading well under 1x EV / sales, which for a 20%+ growth, software company is incredibly cheap. Consolidation in the industry and missteps by competitors are going to provide for some strong tailwinds for RUBI on top of overall industry growth of roughly 20%.
I have a target of $7-$10 dollars for this sometime in 2019 if they can continue this great turnaround.
BHP starting work on their new mine... Not sure why this is so weak, I expect profitable results to continue through the next few years as Australian mining continues to grow.
https://www.australianmining.com.au/news/bhp-fires-first-blast-south-flank/
Good point, I closed it out for a small loss. Thanks for pointing that out.
I just sold a $100 call for $48... just a matter of time... thanks for the heads up.
Another solid quarter from AYSI. Revenue up 21.7% and EPS up to $0.052. Increase in inventories lead me to believe that we'll have another strong quarter in Q4. Now if only we could convince the board to return some of that cash hoard...
Iron ore expansion activity ramping up. I'm surprised AYSI is languishing here with what appears to be a motivated seller. I'm picking up shares here opportunistically as I feel this will trade higher. 2nd half 2018 financial comparisons will be favorable to prior year relative to the 1st half 2018 comparisons. Working capital was high in Q2, so that should convert to cash going forward, improving the already solid cash position. While its been a frustrating hold, value is still there, if only they would do something to realize it...
https://thewest.com.au/business/mining/bhps-100-year-pilbara-mines-plan-gets-green-light-ng-b88891390z
https://www.afr.com/business/mining/rio-tinto-bhp-vale-tipped-to-report-strongest-ever-quarterly-iron-ore-exports-20180713-h12nst
https://www.thetimes.co.uk/article/pilbara-gains-put-rio-tinto-on-target-s3qqc2xbs
SBOW - They sold some non-core producing assets that may explain the near term decline in estimates, as the production ramp from the investment of the proceeds will take some time to hit the financials. I think they're also quite conservative in their production estimates, excluding the sold assets, but only time will further prove that out. With production growth expectations of 30% in 2018 and something similar in 2019, the current price seems quite attractive from a multiple perspective (4x 2019 EPS and 3x 2020 EPS).
My take is that it's more of a wait and see if they can perform situation. And with what I've seen management do since taking over, I'm making the bet that they will continue to execute, eventually earning a more appropriate multiple. US nat gas demand will continue to grow, especially with increased export options.
My target price is $35-$40 by year-end (so long as nat gas pricing does not collapse) with the potential to hit $50 in 2019 if they continue to execute and nat gas pricing remains stable.
SBOW - Surprised to see SBOW moving lower her over the past few weeks. Given the strength in nat gas and other nat gas producers, I would have expected this low-cost producer to move higher as well. The company is well positioned for growth with the additional rig drilling this year and ample inventory of wells and acreage to develop. Q2 will be the inflection point in terms of performance with the benefit of the second rig expected to result in strong production growth rates in the back half of the year. It’s been impressive to see what new management team has done to the cost structure.
I would echo your comments, solid report, but below my expectations. The company used cash to build up working capital (A/R and inventory) and we should see the cash balance build for the remainder of the year as they work that down to more normal levels. Cheap down here at $1.15 and I'll be looking to add some shares on further weakness.
Buying more shares here in the $1.20’s. I’m expecting another solid Q2 that will have some benefits associated with currency fluctuations. I am anticipating EPS north of $0.05. Comps will improve on both revenue and EPS for the remainder of the year.
I've been picking up shares in the $1.31 range, including some more this morning. Fair value is still in the mid $2's and the next few quarters will have easier y/y comps. Still crossing my fingers we'll see a sale of AYSI in 2018, or at least the sale of their Indonesian property...
Agreed, I wouldn't expect any comments from the company.
I was expecting a penny more in EPS on slightly higher sales, but things tend to be lumpy from quarter to quarter, and this was just another ho-hum profitable quarter.
Spent a good amount on capex this quarter, which is why cash came down. Inventory balance was also up. Looks like they're investing cash into the biz, hopefully a harbinger of good things to come.
CMTA - Any thoughts on Clementia? Their drug Palovarotene is a retinoic acid receptor gamma agonist (RAR?) targeting the treatment of utla-rare diseases FOP and MO. The share price is down 33% since their IPO lock-up expired on 1/29 and there haven't been any fundamental factors that have changed in the interim. Their original Phase II results were not significantly significant, though when the dosing regimen was changed to daily dosing, the initial results have been encouraging. Encouraging enough to have the FDA grant Breakthrough Therapy Designation to palovarotene for the prevention of HO in patients with FOP. Though the data set thus far for daily dosing has been limited (10 patients), the 99% reduction in new HO volume reported in those 10 patients on daily dosing appears compelling. The company plans to release additional data on the impact of daily dosing in Q2 and if the data is similar to that shown in the initial 10 patients, I believe it will significantly de-risk the outcome of the Phase III trail that began enrolling patients in December. The company is looking at Palovarotene to treat MO, which is more prevalent than FOP, though still ultra-rare as well as in dry-eye.
With an enterprise value of approximately $200 million, this appears to be an attractive entry point, with key data only a few months away. I would appreciate thoughts if anyone has taken a close look at CMTA.
NCNA - this is my pick and far from a pot stock... company is developing next gen chemo drugs to fight cancer. Uses the same tech as Gilead’s Sovaldi in oncology. Phase I results in front-line treatment of biliary cancer sent the stock higher. Acelarin is their main drug candidate with several other drugs in the pipeline. If things go well, I can see this hitting $75-$100 in 2 years. Holding about 75% of my peak position after selling in the upper $20’s last week. Holding the rest LT.
SBOW - Announced capital spending and production guidance and the addition of a second rig yesterday. I think their production guidance is conservative and that growth will be greater than forecast. They are cleaning up some legacy assets and executing on their strategy. Still holding the majority of my position and expect SBOW to have a solid 2018. My target is $45+ at some point this year.
SBOW - Decided to sell a portion of my SBOW here on the latest pop. Holding the rest as I think they will be adding a second rig which will really accelerate the growth in production.
I'll look to update the ibox with the latest financials in the next week.
SBOW - Still holding my SBOW as I think with the latest news of a loan facility will allow them to add an additional rig and increase the rate of production growth. I've read a few articles here saying that the next few weeks will show record natural gas withdrawals. I wouldn't be surprised to see the $30's next week.
Great run so far, but fair value is closer to $2.50-$2.75. I think it can get there and higher under an acquisition scenario. I don’t think BHP would be a buyer, I thinks it’s most likely Bradken, under Hitachi ownership. Lot of financial backing behind it now. I think they have shown interest in AYSI before.
EVI - Laundry systems that accept bitcoin, YUGE market opportunity...
I will soon be launching a new company that makes vending machines that accept bitcoin and other crypto. 1% stake for $1 million... any takers? Should be worth a billion or so once I get it listed...
I don't believe they actually purchased the shares, from my understanding they were cancelled for a reason I couldn't quite find. But the net effect remains, the share count is now 17,042,000. I believe this happened about a year ago. I would check their disclosure statement and their 2016 audit as I think there was some more information in there.
Wade - The ATLS penny stock you mention is not that company. The Atlas that supplies frac sand is privately owned and backed by a very wealthy oil & gas entrepreneur that has started and sold multiple billion dollar companies. It was in the press release you linked to. Did you even read it?
"Founded by Ben M. "Bud" Brigham, who previously founded Brigham Exploration Company, which sold to Statoil in 2011 for $4.7 billion, and Brigham Resources, which sold to Diamondback Energy for $2.55 billion in early 2017, Atlas represents the latest of Mr. Brigham's long-running and highly successful oil & gas related ventures."
HCLP - I had dabbled previously, but do not currently own any HCLP due to the risk factors I mentioned in my post. Too volatile and too many unknowns for me. Happy with other opportunities elsewhere.
HCLP - Risk of new mine openings should not be surprising. I mentioned it months ago as the most important risk facing frac sand companies and that new mines would likely continue to open.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=134900119
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=134939885
I also like how they have now broken out all of the related party items so its more clear on the audit. In addition to extending the royalty agreement to 25 years and buying Matrix, they also got rid of their Team Arcoplate operations, which sure makes it seem like they are cleaning everything up in preparation for something, hopefully a sale...
Another solid quarter from AYSI... There was $432k of impairment expense in the year, but its not clear in which period it was expensed. This adds about $.02 per share to the annual figure and perhaps even the fourth quarter. Looks like they've had some inquiries on their Indonesian property. Hopefully they can finally sell that land and add another $0.23-$0.24 per share in cash to the balance sheet. Ex-cash and excess land, the P/E is now a staggering 1.25x at $1.30...