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From hptaxis on BV:
Looks like the pullback is in effect on PPO - but it was drastic - right at the open... That doesn't seem normal to me.
Thoughts?
Maybe the Pringles deal is off the table (along with the crushing debt):
http://www.bloomberg.com/news/2012-02-10/p-g-said-to-seek-termination-of-pringles-sale-to-diamond-foods.html
http://seekingalpha.com/currents/post/139981
Dav,
Thank you very much for that information. It appears that things are better than the press release indicates...
Still, there is the question: What is the exact nature of the accounting matters?
Thanks again.
Don't flip while you're at work - it's stressful enough when you're not!
Do you think that it's just an effort by an "analyst" to push the stock down, then?
UPDATE 1-Diamond Foods likely to default on debt covenants - analysts
10:39 am ET 02/09/2012 - Reuters
(Adds more comments)
Feb 9 (Reuters) - Diamond Foods Inc is likely to default on its debt covenants and cancel its biggest-ever deal, Wall Street analysts said, as the stock crashed 40 percent following an accounting scandal that cost the company's top management their jobs.
"Diamond's restatements will cause debt covenant default and ultimately raise interest expense," Janney Capital Markets analyst Mitchell Pinheiro said in a note, adding that Diamond's proposed buy of Pringles potato chips from Procter & Gamble Co was "finished."
On Wednesday, Diamond, maker of Pop Secret popcorn and Kettle chips, said it had improperly accounted for payments to walnut growers, and it would restate results for the fiscal years 2010 and 2011.
It removed Chief Executive Michael Mendes and named director Rick Wolford as acting CEO. It also replaced finance head Steven Neil with Michael Murphy of consulting firm Alix Partners.
SunTrust Robinson Humphrey's William Chappell, who had previously backed the company's accounting practices, cut the stock to "neutral" from "buy" admitting that he had been wrong.
"This is the worst case scenario, not only creating uncertainty around the financial statements and removing a senior management team that directed the solid growth of the past few years, but also likely rendering dead the pending Pringles deal," Chappell said in a note.
Janney Capital's Pinheiro reckons that Diamond is likely to earn about $1.70 a share in fiscal 2012. The company previously forecast adjusted earnings of $3.05 a share to $3.15 a share.
However, some believe that Diamond's stock is a good buy at its current levels of $22-$24, saying the company still has various strong brands.
"They still have good businesses - Pop Secret, Kettle and (Emerald) nuts," a Diamond investor who declined to be named told Reuters on Thursday.
"When cooler heads prevail, the stock should trade back up somewhere in the $30s, probably after a couple of quarters."
KeyBanc Capital Markets' Akshay Jagdale said that Diamond's various businesses were together worth about $44 a share. Janney's Pinheiro believes that number is $31 a share.
The company's stock was trading at $22.00 on Thursday on the Nasdaq.
Comments appreciated.
PPO - Baird upgraded the price, but downgraded the stock???
http://www.streetinsider.com/Downgrades/Baird+Downgrades+Polypore+International+%28PPO%29+to+Neutral/7138121.html
Thoughts appreciated.
Very, very interesting share price increase today with no news...?
Yessir, and your write-up was an intergral part of that! Thank you again.
Even though my covered calls max out at $45, going over that price is a strong vote of confidence.
The real question is "Are your attorneys talking to Ampha/Watson?"
I imagine they'll take a real long time to get back to you on that one!
I only knew you for a little while, but I came to greatly respect your comments and insight.
I too will miss your presence, and I wish you the best.
I hope to see you return some day in the not too distant future.
After seeing what Greenberg, Einhorn, Antar, etc. did to GMCR it makes me disbelieve the whole "PPO is going waaaay down" stuff.
IMHO these guys don't put out information like they have for the betterment of society.
I didn't realize that Dryships etc. carried so little cargo.
Do you favor one stock/ETF over another (for holding or trading)? It's an area I used to be in, via DRYS, but am current out of.
Thank you.
Congrats!
GMCR <> fixed your link: link
PPO
PPO Check this out:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=71590977
"Management commentary:
After speaking with Polypore's management, we believe today's price reaction was over done and that LG Chem's announcement was not unexpected..."
There's much more there, more than I have found elsewhere, but I think the iHub rules say you can't post things to more than one topic(?)
PPO I found this (of all places) on a post on the Yahxx! board, dated Feb 1, 8:36 AM:
"Management commentary:
After speaking with Polypore's management, we believe today's price reaction was over done and that LG Chem's announcement was not unexpected. There remain many important questions to pose for LGChem, including what process (wet or dry) will they use for this capacity, will these separators be for consumer electronics or automotive, what is the time horizon for this capacity to be qualified and sold, and most importantly how successful will LGChem be, given the history of new entrants such as MMM, Dow Chemical,DuPont, Mitsubishi, etc. failing to penetrate a niche market. Polypore continues to be very confident that their process intellectual property is very difficult to replicate. Furthermore, the design in process for the 50 separate vehicle programs with >20 different auto OEMs typically takes 3-5 years. Polypore has received permission from its board to expand capacity, based on reasonable pricing, volumes, and general contract terms, and none of these terms have changed with today's news from LG Chem. We do not doubt that a couple of new entrants will over the longer term succeed in penetrating a separator market expected to grow rapidly on EV demand, but at this point do not see significant negative pricing/margin implications over the next couple of years from today's development.
Our thoughts:
We continue to believe that new competition for Polypore is inevitable in a rapidly growing market, but continue to believe that the company enjoys a handy lead. While our initial reaction was that possibly LG Chem had caught up sooner than expected, our conversation with management helped alleviate these fears. Longer-term, global battery manufacturers will be continuously researching strategies to reduce battery costs; this is a given and required to achieve the reduction in prices for PHEVs and EVs to gain significant commercial adoption without subsidies. While we continue to believe most of the R&D by battery manufacturers will be focused on the electrode, LG Chem's attempt to vertically integrate does imply that the separator is also "fair game". The question is will anyone be successful (we think eventually, yes) and what is the time-frame for new entrants to gain material market share in a highly technical niche product. We continue to believe it is at least a few years away and remind investors that automotive business is typically handed out to suppliers on a multi-year basis given the long technological and engineering development lead times, so we continue to believe that the 50 plus vehicle programs that Polypore is involved in give the company good revenue visibility over the foreseeable future.
Valuation: Our $72 target price is based on a 26.5x multiple on our 2012 EPS estimate of $2.71."
I haven't been able to find the whole text elsewhere on the web, just a portion of it, summarized.
If correct, and it sure seems like they've done some homework to reach their conclusion, it seems like the Axiom analyst is either a) all wet, or b) trying to make money off his short.
Comments appreciated.
PPO nLOD - Almost, but not quite.
LOD was $40.62, most recent low was $40.68
PPO - Thanks for the good wishes. I hope I'm right too.
Needham's report is the biggest reason I feel comfortable being long:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=71572545&txt2find=ppo
Polypore Intl: Recent weakness creates buying opportunity - Needham (38.08 ) -Update-
Needham believes the sharp pullback in share price has created a good oppty for investors to stock up on PPO shares. The announcement by LG Chem that it will produce separators is likely to have minimal financial impact to Polypore as the material will be used in IT/consumer electronic devices (NOT electric vehicles). LG has been developing a ‘wet' processed separator for several years and announced plans to begin mass production in August. Mgmt's objective is to vertically integrate and internally produce 50% of the material by 2015. Given LG's multi-year timeline, they believe the potential financial impact to Polypore will be minimal, as the EV business should have significantly scaled by then; Strong Buy -- $79 tgt.
<double post>
Thank you. I understand why it sank - a combination of an analyst's comments and the competitor angle, but additional information now out there as well as the timing of just when (and how much) competition the new competitor will provide (not much) seems to point to an overreaction.
An iHub search for PPO turns up lots of information supporting my opinion, but of course the market rules!
Thank you.