There are about 735.000 warrants to be exercised at $5 a share. That makes it a "scenario" stock" until about the middle of this month. To make that "useful", I would presume that the scenario will require that the stock will be nudged to the $6 to $7 area. After that I would not be holding this stock. Note that while they are reporting $.26 or so in per share earnings, the great majority of this gain is from a $4.5 MM settlement they expect to get relative to 9/11 (their headquarter were on the 84th floor in one of the towers, they lost 60 out of 300 people they had there), since they have 7 MM shares or so outstanding, without this gain, they would have lost money (but in fairness their revenues would have been higher without the interruption as well, and despite the interruption, their revenues grew).
It is not such a "bad stock" mind you, they are not selling at huge premium to book or revenue, bu they are a small player in a big business, and as such they can come under pressure. Because they are small (and in the last two years or so reduced their stocks outstanding down to 7 MM from around 11 MM), good performance could get them noticed and being a "street" company, notice could mean very good prices. Right now, however, I am playing the scenario only.
Zeev |
