This is beautiful: PPH is so low, that PHP can buy back the remaining 2M common for only $20M. This leaves another $60M in the new credit facility they can use to buy back most of the preferred. And since they didn't pay any fines in April, and won't pay any going forward, and may indeed get a waiver from preferred holders, April EPS will be blowout vs Jan Q, and year ago. Any interest incurred buying back common and preferred will be offset by lower shares outstanding.
Also, float will have reduced to 3M by earnings release time, and EPS of $0.20 - $0.30 will put PPH at fair value of $15 - $20, assuming 30/35 times trailing EPS of $0.50 - $0.60, and forward P/E of 20 on $1.00+.
This is like VISX a month ago, and MAX last year after a customer went bankrupt. Everyone freaked out, then came to their senses when earnings were released, and they realized there was no real problem. Both stocks went into bottle rocket mode. Start scoopin'. |
