What's astonishing is that we have come full circle. For a long time, fundamentals didn't matter. Of course, that was when the squeeze was supposed to happen. Well, the squeeze, as predicted, has failied to materialize. So now it's off to fun(damental) land. I should repost all the "fundamentals don't matter" posts here. It would be quite a joke now. These guys own what appears to be 90% of this fine company and are stuck with it good, bad, or indifferent.
So now the only talk is about water. Interestingly, the merger has not been consummated officially, since there apparently has been no physical cash infusion that has been formally announced.
What the longs here seem to be ignoring is that this company is still solely in the garment business. And we know that another company has been operating in the Hialeah facility for some time now. And there is another company operating in Nicaragua. The impact of what this could do to the balance sheet is unknown, but it affects about half the assets and about 3/4 of the employees of this fine company.
It is difficult to imagine the company does not consider this a material event. Where is the press release? The company was quick to point out that Bancentro had not taken over, while neglecting to mention JEM III had. And they did acknowledge a lawsuit which was previously undisclosed, anywhere I have ever seen. The suit involves a large percentage of this company. I'm assuming Riley properly reported the company's official posture.
I am having a difficult time understanding why no one else seems to be the least bit concerned.
Yet another promise is being expanded in the water business. Even the size of the orders I am hearing may add only marginally to earnings on a fully diluted basis. And the company's record of hitting targets announced in news releases is, at best, a mixed picture. The potential of an economic slowdown in the far East makes the prospects of commanding premium prices for the water marginal at best, IMHO. And the local business is highly competitive, read: lower margins.
And none of the shareholders seems the least bit concerned that the financials are very, very late. I remember when the company promised financials in late 96 and delivered the end of March. It is simply amazing to see posters making excuses for management, like they're too busy to fulfill their fiduciary duties to the SEC, and shareholders, for whom they work.
A long time ago, I mentioned fundamentals would be of paramount importance here. Now, another aspect is emerging. The word of management and the accuracy of what is said in the press will also loom large here, as it does in any company.
Like the Pilar del Caribe: (9-4-96)
"Mr. Morgan spent the Labor Day weekend in Jamaica where Olympus Ventures shipping line CEA is finishing the refurbishing of their flagship 'Pilar del Caribe'". "By promoting the shipping line, our presence will be felt throughout the Caribbean" says Mr. Morgan". Owning CEA gives us the competetive edge we need in the garment business. Consistently visiting all of the major ports gives us an accurate pulse of the market place, which greatly influences the pace at which we want to grow. I think North America is just beginning to take advantage of the manyh resources available to us in the Caribbean and Central America."
Mr. Morgan said he thought it might be best to walk away from that ship in the 10-K, perhaps for good reason.The unconfirmed rumor is that it is a rusting hulk, half-sunk around Kingston Harbor, with water up to the gunwales.
Is the stock worth $2 a share?...................nope....it's worth $500 or so. Just ask Riley. |
