I was asked to take a look at FIBR and give an opinion on it. Following are some notes I made after reading the most recent 10Q and reading some of the most recent press releases:
The company has been a fast growing company due to acquisitions. The acquisition phase was phase one of their business plan. As of December 31, 1996, that phase is supposed to have ended, for the most part.
The current assets (what they have to pay short-term bills), is more than current liabilities, but not by a very big margin.
The % net profit margin (earnings after taxes) is small (1%, maybe). Coupled with the current assets not being much greater than the current liabilities. This means the company can not afford much of an earnings disappointment, or they will have to dilute earnings more by issuing more stock.
Earnings this past quarter would have been half of what they were (.07?) if it were not for an extra-ordinary gain via the sale of an assets (or something).
Acquistions can be good, but they can be tricky. The news companies must be successfully digested. Now that FIBR is not going to be acquiring so many companies, maybe they can concentrate more on the bottom-line (profits). They did state that profit margins should be increasing by the end of the year. That is good. However, they are so slim now, that one might be better waiting to see what happens. As a said earlier, any mistakes will be costly to the bottom line so there is a danger that they might not meet projections.
Because of the dilution from the acquistions, the equity per share decreased year over year. That is not a good sign. Equity per share should be increasing year over year, ideally.
Today FIBR sells for just over $ 7 per share. They are in a growth industry, but at this time I don't see any compeling reason to buy this stock.
I also noticed that the company in its three part plan did not mention anything about increasing shareholder value. The emphasis seemed to be on growth and becoming number one. I hope that when they get there they find they can make enough money to justify the new status. I'd rather be small and profitable than big and marginal.
In summary, the numbers look so-so on the balance sheet. The outlook looks hopeful, but I don't think the future is certain enough to put your money into FIBR at this time. . . according to VALUESPEC.
NOTE: I may have missed some key aspect of this stock in my analysis. If I have, please let me know what I missed, or was mistaken with.
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