Savvy Trades and Investments

[hweb2]

SGMA acquisition never made sense to most of us. With those big quarterly numbers they posted last month, SGMA would be trading at least 50-100% higher than it is now if we'd never heard of Wagz. Maybe SGMA would even be in the $20-$30 range. Which is why I don't understand why so many shareholders voted for this deal. They voted for a lower stock price!

On the flip side, if it wasn't for Wagz...we'd never be able to buy the stock in the $8's right now. So maybe we should be thankful Wagz is presenting another great trading opportunity (let's hope). I think SGMA is super cheap down here, even with the Wagz dilution. As their main business is booming over the last 3 quarters. Should have another favorable comp in March.

SGMA looks undervalued even with giving Wagz zero contribution going forward. Since they're not profitable...maybe they're bringing years worth of NOLs to SGMA? A lower company tax rate would help offset the dilution. Although I'm not sure how it works when you acquire a company with a bunch of NOLs, there's probably limits on how much you can use etc.

One potential positive on Wagz is they have a new product launching in March. Called Wagz Tagz. They demonstrated this at CES last week. Maybe it'll be a good seller? Hopefully at least among the $250 dog collar crowd ha

https://www.digitaltrends.com/home/wagz-tagz-give-pups-freedom-while-keeping-them-off-furniture/