Morgan,
Agree with your comments.
I have no problem with an argument that NUFO will go down from here, but IMO there is a similarly good argument that NUFO will go up over time, or be acquired at the present price, or even over time at a premium. The industry dynamics, intellectual property, capacity to produce, and the "scarcity premium" have as great an influence, if not more, than any traditional measure. Gorillas don't mind throwing their currency around.
I am not inclined to take either side of the fence on the NUFO argument, though I think it more likely than not NUFO, though volatile, trends higher over time. IMO, there is only a slim chance it will trade significantly lower. You could argue that LDP's holding in NUFO is right now significantly discounted anyway, and I think that's what you mean when you say you do an analysis of LDP that considers a base or floor price for the stock. Don't forget the pipeline though. <g>
You mentioned a "road show." The only thing that could be considered a road show has been Whitehead and Mayer in the U.K., perhaps for a short time a couple weeks ago. Trueger was not present, and I will speculate that the focus was mostly on LPA. It appears, given Trueger's comments about LPA, and moving Whitehead to London, that they will in earnest commence an effort to get some significant deals with major players. Can't say the move in the stock is necessarily related to that though. However, I really don't think Trueger is blowing smoke when in pointing out in his Chairman's Statement that LPA "could be very big." By all accounts, management in general is fairly conservative in style and is not inclined to hype. So, we'll see.
That said, I don't think Whitehead will really start to meet with institutions in earnest until sometime in September after the vacation period is over....perhaps after FTSE 250 inclusion. This would be around the time of Trueger's presentation at FBR's investor's conference. As you have pointed out, there is clearly accumulation going on right now and I would agree with you that this is the "smart" money.
Best regards |
