Value Microcaps Motherboard

[abh3vt]

Curlews, you are absolutely right to point out that current shareholders are not diluted by this action. However, an increase of 20% of the share count will have some impact on future eps ratios and y/y eps comps if net income doesn't rise as fast. Potential new shareholders must weigh this and may decide not to buy as a result.....is that what you want as a current shareholder?

Once a stock starts posting flat results, it can often drift for months at a time. I'm not saying that will happen to LTFD, but management's actions today didn't make it easier to sustain their earnings momentum. VMC'ers tend to use PEs as the primary measure of value, so that's why I point this out.

Cash flows aren't impacted by this, and there are certainly many other methods to value stocks other than PE. I could be way off base with my concerns, and given the easy comps coming up for LTFD in Q1 they are really in a sweet spot of their earnings cycle right now.