It's been nearly six months since my last post on GNC. However, most of the bearish issues have been dispelled.
Potential Issue: Malt business will have write downs and the assets are not great.
A: Malt business has performed up to expectations, even exceeding most analysts' estimates. Don't expect future writedowns of the business given the way it is performing.
Potential Issue: GNC's tangible assets are not worth much.
A: NTA is approx. $4.80/share, which is conservative. NTA of approx. $950 million gives us a clear indication of what replacement value for GNC's assets are. Replacement value should be more than $950 million since GNC carries the value of their assets at cost and they don't re-value them upwards on a constant basis.
Potential Issue: Might not get enough rain.
A: Well, we had loads of rain for the year to date. We just need some decent winter rains to get a great planting season.
Potential Issue: With all the above listed issues, GNC might come in with a major profit downgrade.
A: GNC actually came in with a profit Upgrade. Yes. A profit upgrade, not a downgrade.
Potential Issue: The stock and sector has been shorted regularly as there is no interest in the sector.
A: Given the profit upgrade and strong performance from Malt, I am still amazed at GNC trading under $6. The instos. are starting to warm to the agri. theme and there will be a point in time when GNC will be accumulated. It has already started with the 4mil+ turnover a few days ago. As for short sellers, I hope they know what they are doing shorting GNC. I would not be shorting a stock like GNC. Definitely not under $6.50, given their recent profit upgrade.
If you read through my previous posts on GNC, I mentioned that it will take a while before GNC even thinks about surpassing the $7 mark. I mentioned they needed a catalyst and they have just provided the best catalyst to the markets with a great result.
All things being equal, GNC should be outperforming the overall market for the next 12 months.
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Last
$9.07 |
Change
0.140(1.57%) |
Mkt cap ! $2.034B |
Open | High | Low | Value | Volume |
$9.00 | $9.13 | $8.99 | $11.29M | 1.244M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
3 | 5233 | $9.04 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$9.08 | 1759 | 1 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
3 | 5233 | 9.040 |
1 | 2757 | 9.030 |
2 | 6909 | 9.020 |
2 | 4528 | 9.010 |
3 | 12000 | 8.980 |
Price($) | Vol. | No. |
---|---|---|
9.080 | 1759 | 1 |
9.090 | 5233 | 3 |
9.100 | 20551 | 5 |
9.110 | 5028 | 3 |
9.120 | 2860 | 2 |
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