Now and again, when I read of a stock that's being commented on, the first place I go to is that company's Income Statement to see the latest Financial performance of that company and how that could likely tie in with the "Market's" assessment of that stock in terms of its price performance ....
So, in that regard I tend to target 5 items in that Statement, viz. Revenue, EBITDA, Pretax Income, Interest Expense and Net Income. .....
In UAN's last 5 Quarterlies ....
OPERATING REVENUE :- So, so .... no ongoing regular increase, kind of up-and-down
EBITDA :- A good percentage ratio to Revenue, i.e. 26/90 = ~29% of Revenue left over after deduction of the "compulsory expenses" of CoS, SG&A and R&D.
INTEREST EXPENSE :- Very high relative to EBITDA, i.e. 15.7/26 = ~60% of the left over Revenue going to service its Debt. Not good IMO.
PRETAX INCOME:- Company is already losing money.
NET INCOME:- Company has been losing money for the last 5 Quarters, which, in turn, is having a Negative Effect on its Balance Sheet. The only positive is that the Quarterly loss could be showing signs of declining. However, no sign yet of declining Interest (Debt) Expense.
And when one interrogates what the "Market" thinks of the company :-
The Market appears to be undecided as the stock trades sideways between a band of ~$3 and ~$4. Which, I'd say, is in line with its financial performance. Once it trades above, say, $4.50 to $5 then that could be a sign that things are improving.
My guess is that this "Market indecision" could be related to the company's high relative Debt Expense which is sucking left over Revenue out of the company. Seems to me that's where this company's management needs to focus their attention ....... |
