Art
CDIC was first brought to my attention by Dan Webster as I recall, when it was in the 6's. I liked the company and the tech. so began buying. That was in Jan. 01...of course we know what happened to the market in general, so I began trading the stock around those core shares.
In the meantime, the company has increased their sales year over year as well (with the exception of Mar. reporting), quarter over quarter. Also, the company has two quarters of positive cash flow and little to no debt. They do have a 4mm credit line, but have not used any of it to date.
They have increased sales and tech. staff from 120 (Jan. 01) to 131 total company strength, while cutting costs and burning less and less cash each quarter. Presently, the market for the BIO-Z is about 1 to 2% penetrated with sensor sales as the recurring rev. stream.
Now, for the downside. When CDIC was a startup (changed over from another company that was about to go under) they made a deal with Allan Paulson Sr. (if made Gulf Stream, among other companies), as a benefactor. They gave him shares for his private funding as well as a seat on the board. Mr. Pauslon died in June 02 leaving these shares in trust to his sons. Shortly after Sr. died, Jr. began liquidating the shares..(about the time I was buying..LOL) Thus diluting the stock by about 18mm shares so far. Most of these shares were placed with the assistance of the company to institutions. (and not all at a discount to the market at the time). Currently Paulson trust has about 5.5 mm shares left to sell. 1.5mm are on the block (.5mm were just sold at 3.07 last month) Paulson has agreed not to sell anymore shares for 6 months once these 2mm are sold.
The upside of this is that all the while that Pauslson has been selling the company has actually been able to absorb all the shares and make money. Imagine where the PE would be if the Paulson shares were not in existance.
IMO once the shares are all gone the stock will go up considerably. That seems to be the only negative that I can find.
If you need more info. please ask specific questions and I will either post what I already know or get the info. for you, as I have a pretty good relatonship with IR.
Ken |
