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Monday, August 24, 2015 2:28:48 PM
1. I personally don't think that the stock is currently overvalued, but I think for any stock at any price a case can be made that it should be selling for more or for less. Calling anyone who disagrees with one's own point of view a fool or troll or whatever else really doesn't move the ball down the field (and being a troll absolutely doesn't accomplish anything).
2. In the case of VHUB, the bear case for the stock begins with remembering that what one thinks of the company and what one thinks of the company's stock can be very different. Even if one knows from personal experience as a vendor that the products are cutting edge and top quality, the stock price may be either more than reflecting that fact or less than reflecting that fact.
3. The bear case for VHUB revolves around three points, I believe.
First, while sales growth probably has been strong recently(we don't know for sure about the June quarter but we've gotten all sorts of press releases about individual products and weeks), we don't have a history yet that the company has controlled its costs (whether cost of good sold or administrative & general costs) such that the company is yet profitable. In the end, what good is sales, if they're not profitable?
4. The second factor in the bear case is that while the company has trumpeted that debt and related interest have been paid back in cash rather than in dilutive stock conversions/issuances, given the increases in overall loans, one could just as easily make the case that debt has more been rolled over into new loans rather than repaid.
5. And the third factor in the bear case is that this is a family-predominated company without the benefit of substantial external consultation at the board level (though I think they have fine consultation as regards investor relations and legal matters). Unfortunately, they found themselves in the realm of a pump and dump by Investor Edge and related entities around April of last year. It's hard for a company which has been a P&D to regain the trust of the investing community.
So FWIW that's my version of the bear case. The bull case, I believe, is a better one right now, but I think I've already intruded enough for one afternoon. As I've mentioned every few months when posting, I don't hold a position in this company - I got interested to see what would happen after I got bombarded with the P&D material last year; I became pleasantly surprised that this actually sure looks like a legitimate enterprise (as our seller and wholesaler have so well pointed out) and just have enjoyed following the company, its stock, and the conversations on this discussion board when they've been civil.
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