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Microcap & Penny Stocks : Qurate Retail
QVCGA 11.84+5.4%Oct 30 3:59 PM EDT
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To: HomOeconomicus who wrote (21)5/20/2024 12:27:25 PM
From: Sean Collett1 Recommendation

Recommended By
sixty2nds

   of 85
 
I agree with the statement the crux of the investment thesis is based on them generating cash which they failed to do in Q1. They finished 2023 with strong FCF but Q1 was not great.
I stand behind my original analysis that core QVC/HSN revenue declines are likely starting to get behind them as customer counts show life. It is the Cornerstone brand that worries me and will drag revenue down for the company as I don't see much life in the home categories. Either way if core QVC/HSN customer counts don't continue to show life the whole thing fall apart anyway.
I do believe the selloff was less of a cash analysis and more revenue declined again + debt grew because they used the revolver and no cash. I again really did not like that they went this route as I expected some combo of cash + revolver since using all revolver just turned existing debt into a higher interest payment for now.

So combo revenue decline + debt unchanged and then you have the fact it was already < $1.00 and that's all she wrote. Hard to justify holding a penny stock when you're managing real money and risks are high.

Again though I see $0.73/s as a critical zone and if broken (looking likely) we're setup for a return to $0.40/s which is the floor on the last zone.


The risks of investing in a turnaround though, sometimes she don't turnaround. I remain hopeful they succeed but data comes first so I am sitting out until I see support form.

-Sean
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