Replies to post #40 on Educational Development Corporation (EDUC)

[wadirum1]

And once a stock starts going down, people naturally wait on the sidelines to see how cheaply they can get shares. And others sell to protect capital.

That dynamic reverses once a stock starts going up.

[value1008]

Just to nuance one of your points, Uglytuco-- you expressed it as " the sales team thinks they will do $300M" (emphasis added). Actually, here's the quote from the conf. call:

"The field people, this is not my forecast, but I am telling you the people in the field think that we can do $300 million this year. Did you hear that? I didn't forecast that, that is a forward-looking statement, and if you talk to people in the field that is what they expect this year because the market is there. There seems to be the insatiable appetite for the products and almost never ending supply of people who want to join and sell them."

Obviously, EDUC can and will do $300M in revenues in FY 2018 only if they can logistically supply all the books on time and pay all the sales reps.

Yes, it's a "nice problem to have"-- all that growth-- but it's still a problem for the bottom line if logistics are still a problem.

Btw, does anyone know if Maj Soueidan and his rigorous GeoInvesting team are still in EDUC (they were as of last Aug. 2016) or have they sold out? (One needs to be a paid subscriber to see their research).

[value1008]

p.s.-- over at Stocktwits, i notice that a tweet from late Jan. by Addessiap (who posted in a comment thread at the SeekingAlpha article on EDUC in late August that he had visited headquarters and talked closely with mgmt), gave some estimates for FY 2018 (beginning March 1 2017):

Based on mgmt guidance of $150M for FY 2018 Addessiap sees after-tax net profit margin of 5.5%, so net earnings of $8.25M and EPS of $2.06 based on (what co. recently reported as) 4.085M fully diluted shares.

2.06 in EPS would not be shabby at all. Assuming they're still growing, depending on overall stockmarket conditions at the time, surely that would merit a P/E of 12-15. Do the math on EDUC's s/price.....