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wadegarret Member Level  Tuesday, 08/13/19 11:44:59 PM
Re: hweb2 post# 63816
Post # of 64175 
Hweb- WSTG

Yes they had a great June qtr 2019 of $.41, but let me point out that the Dec 2018 was $.40, and the stock only went to the $12s. I went to the 10K to see what it said about seasonality. Here is out of the 10K...

" Our quarterly financial results may fluctuate, which could lead to volatility in our stock price. Our revenue and operating results have fluctuated from quarter to quarter in the past and may continue to do so in the future. As a result, you should not rely on quarter-to-quarter comparisons of our operating results as an indication of our future performance. Fluctuations in our revenue and operating results could negatively affect the trading price of our stock. In addition, our revenue and results of operations may, in the future, be below the expectations of analysts and investors, which could cause our stock price to decline. Factors that are likely to cause our revenue and operating results to fluctuate include the risk factors discussed throughout this section."

So it appears to me no one qtr can be counted on to mean a lot, unless there is guidance, which there wasn't. A big problem I also see is, that because margins are so tiny at around 16% overall, that sales must consistently be at least $50M/qtr to show $.40 consistently, and judging from the past, that has never happened. Also this is a micro cap with anemic liquidity, making it hard to trade.

So for those reasons, I believe this should not be a very high PE stock. I mean the company might be worth $15-$16, but I doubt it gets higher than a 10 PE based on the June qtr annualized. Balance sheet is ok, but almost all assets are from A/R, so important to keep track of the turnaround time to make sure the quality of the receivables stays high.

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