Well, it depends where and how deep you look whether you see problems (and obviously - you only will see them, if you want to see them).
For beginners - GXL carry a sh*tload of non tangibles on their balance sheet ... to be accurate nearly 500 million dollars. And it is not even the brand name ... it is "Goodwill" - i.e. basically the filler between what you could sell off and what the market thought at some stage the company is worth. $488.5 million dollars just for goodwill is a lot - maybe the "good will" of the market is just fading away? $488.5 million goodwill for a $700 million company (market cap) - REALLY?
If you want to look a bit deeper - than I'd recommend you might want to do a Altmann-Z analysis. The number I came up with (2.3 - using the numbers from the latest HY report but recent market cap) didn't inspire me with confidence. Yes, I have seen worse, but it is well below the "safe" area (above 3).
Sure - it all can end in happiness, and the market may do whatever the market wants to do - but personally do I see at this stage the potential reward as much less likely to happen than the risks this stock carries blowing - and this is before considering the market risks given experienced ex-GXL management starting a competing company (as posted on this thread).
DYOR
GXL Price at posting:
$6.10 Sentiment: Sell Disclosure: Not Held
