QEPC.
An opinion was asked on another "Value" Board about this stock.
Here's mine .....
In its last two Annual Results the company reported Increasing Bottom Line losses. That’s bad enough. But if we look at its EBITDA we see that it only has between 2.5% and 3% left of its Turnover.
And then, when we look at its Interest Expense, we see that its Debt is eroding more than 40% of that minimal EBITDA !
Not surprising, that when we get down to its Bottom Line, we see that the company has made a Loss.
If we go to its last 4 Quarterlies we see the aggregate of its EBITDA is $11mil. which is less than 5% of its Aggregate Turnover of $221.7mil. This is an improvement on its recent Annuals, but not enough, I suggest, to really improve its Bottom Line.
And once again we see its debt cost erodes its EBITDA by 26%.
This, in turn, leaves a gross Bottom Line, for the past 4 Quarters of $2.3mil., which is only 1.04% of its TTM Turnover.
The way I see it, QEPC could have got more for its Gross Turnover by putting it into the Money Market, despite the current low interest rates in the USA.
The problem with QEPC sits between Turnover(To) and EBITDA, and in the size of its debt, especially its short term debt.
The company needs to drastically increase its Turnover, improve its CoS/To and SG&A/To ratios, and work on reducing its debt to reduce Interest Expense.
That should ensure more Turnover ends up at the Bottom Line.
Otherwise we’re likely to see its price chart going nowhere, as it has been doing in the last 2 to 3 years.
Even if conditions in its market improve, it’s still a case of how efficient QEPC is at keeping its basic expenses of CoS and SG&A as low as possible.
As I mentioned above, when looking at its numbers 2 years ago, when things were much better in its market, it still only managed an EBITDA Margin of less than 3%.
Can we now expect this company to reverse that previous capability when conditions improve ?
IMO, the time to buy QEPC stock would be when one saw definite improvements in those critical areas of its Income Statement and Balance Sheet as discussed above, otherwise one is speculating on what may, or may not, happen.
Anyone like to express their own opinion about QEPC ? |
