OGN
Sold OGN this morning and puked out in the mid 14's at big losses, as best used as tax loss after that awful quarter.
Here the price move was warranted. My whole investment thesis was destroyed after that quarter.
Number 1 I thought revs would grow 3-5% consistently next fy and rev growth was picking up. Wrong Revs were down y/y this quarter and the 2nd quarter looks like an outliar at this point.
Number 2 Expected EPS of $1.15-1.20 in q3 and q4, Analayst I think were expecting like $2.06-2.07 combined for these two quarters, Now they would be lucky if they do $1.75 combined (I think they will do less), In fact I expect another sequential decline in q4. And I have my doubts with there medium term comment that FY 24 will be a year of growth now.
Number 3 Margins; GM and Adjusted Ebitda Margins declined significantly, in fact they fell off a cliff. This is the thing that bothered me the most, and for the most part I'm wondering if lower margins are here to stay, than forget EPS of $5 Next year which I believe is now off the table. I'm thinking $4 is likely and $3.50 is very possible. Given the fact that growth if anything is negative here it doesn't deserve more than 5 PE and I might be optimisitic after this lousy quarter and guidance. hence My FV estimate went from $35, to about $17-18. But feel there is even risk to that. I think q4 earnings will be a slight sequential decline to q3. Which once again will be another horrible comp. I don't see the upside here, and at this point, I think it is more useful to use as huge taxable loss, which is why I sold today. Wipes out all my taxable profits for the year and give me a buffer to book a few gainers, and not have to pay any taxes on those. All is just my opinion, and I could always be wrong though.
