It looks as if the business end of the company is holding up. Sales are increasing, as are the margins. I think we'll need a large increase in sales and profits to offset the new shares that are going to come out over the next 8 months. Big jobs come and go. The company needs to be able to continually spread the business around so they don't get hurt, as has happened in the past, by the loss of a large customer.
IMHO we'll see double the number of shares outstanding a year from now. I know many of you do not want to hear that. But it is my humble opinion. Just add up the conversion stats. Now some of these shares will result in the company receiving money, such as the IR deal, but it still dilutes the earnings. The company issued options on 1.9 million shares for a $100,000 job. Seems like a lot of shares for such a small dollar amount of work. However, if it results in a stock price increase, everyone will be happy over the short run.
I do not like to see dividends and interest paid out in stock. The company, at its discretion can do so and already has. If they are profitable, maybe they'll see the wisdom of paying in cash.
Remember, these guys have been in bankruptcy before, overseen by their current CFO. I continually need to remind investors that the most dangerous words in in investing are "this time it's different". Bear in mind, that I get paid to be skeptical, but the secret to investing, over the long haul, is not to lose too much. I understand that to some, my posts will be construed at negative, but I play the devil's advocate primarily because no one else is.
You guys can formulate your own investment opinion. |
