I am doing my due diligence on TSNP to see if Tesoro is a good investment. Any comments to my due diligence will be appreciated.
Am I right or wrong?
The company had $42,630 in revenues for the 3 months ending 12/31/2009. Operating loss was $38,069.
They actually had $204,118 in losses but some of that was paper losses so I don't count that.
Shares outstanding keeps going up so that tells me that management is selling shares, probably at half the market value.
If they are lucky they will do $170,520 in revenue (4 times their last quarterly sales numbers) for the next 12 months, but they have losses because their business has $55,258 in operating expenses and their cost of goods on $42,630 of sales is $25,441 leaving them with $17,188 in gross profit making the profit margins a measley 40%. The expenses are so high that they would have to do $685,000 in sales just to break even.
Since the assets in the company are only $53,911 with only $1,547 in cash and they have $227,585 in debt how are they going to buy other companies.
They have a market cap of $150,719 and since they will probably give out more stock to bring in cash I don't see how and when this stock will go up.
None of this makes sense to me.
I think Tesoro is a terrible investment that makes no sense.
Does anyone have different calculations or are my numbers correct.
Any opinions will be greatly appreciated.
I invest in micro and nano cap companies and look for companies that have good business models.
I have about $300,000 in the market and I buy and look to make 35% profit and then get out and move onto the next company.
I am looking at tesoro and it doesn't make sense.
