Value Microcaps Motherboard

[cliffvb]

HOM... I am wary of the CEO there, Frank Fradella. He used to be a CEO/COO of American Eco and USIS. AmEco went bankrupt and USIS is gone as well although I'm not sure what happened to them.

Fradella's Bonus and option plan with HOM is based on meeting thresholds of EBITDA. If he continues to acquire profitable companies by issuing more high interest debt and stock, EBITDA will surely rise but EPS could well go nowhere. In the acquisition of Cornerstone, I calculated that the APR of the financing they arranged was 20.75% (includes the market value of the warrants the lender was given). It will be even higher if the note is paid off before its due date in 2010.

HOME does seem cheap based on the booming FL market they are in and their projections. I had bought some stock earlier this year but as my reservations grew about the CEO, I had been trying to close out my position for some time. I finally closed it out on the small pop earlier this week. Good luck to you guys.