Hey fellas, First of all, been a long term follower of this stock and think it is extremely underrated at the current valuation. I work in finance and have had a chance to review the respective financial reports.
A look back at the FY20 annual report will show a net loss of $2.5M. However, the financial performance of the company in its first year of operation as "Stonehorse" shows extremely healthy signs: 1. take out the $2.2M impairment expense which related to goodwill upon acquisition(once off expense); 2. take out 300K amortisation expense (non-cash); 3. take out 278K professional fees(Mostly once off consulting/legal/accounting costs as the result of the IPO/Capital Raise) 4. note the Gross Profit already being recognised. FY20 was in fact a really good year for the company, the associated costs of acquisition and re-listing just blurred the lines significantly.
With a large number of these costs considered once off or non-cash, the financial performance in that of revenue growth and net profit margin should improve considerably in FY21. Furthermore, the company has a number of interesting new developments and are continually partnering with bigger players to generate cash flow positive wells, requiring minimal further costs once initially drilled.
Looking forward to hearing everyone's thoughts. Very bullish on this stock. Probably a conviction buy at this price. as always DYOR --
SHE Price at posting:
2.6¢ Sentiment: Buy Disclosure: Held
