We shared the same experience this time last year on NFE Krusty and i made the mistake of not waiting for the post bounce consolidation and missed out on an extra $75K……Doh.
There's a gap at 17 cents, the IPO price would be on some peoples minds as would the high of 26 cents and breakout territory. It's very easy to justify much higher prices so it only comes down to each individuals timeframe.
Different sector i know but i've mentioned ADJ on a few occasions when simply looking at enterprise values (Hot air is more accurate for mine), that stock hasn't even made a profit let alone paying a dividend and who knows whether it ever will? Yet it trades with an e/v of $100m……WTH. You can forgive ADJ say $3m as a shell, so it's effectively trading on $97m worth of hot air. Nobody will convince me that SBB can't at the very least, get back to retest the IPO price and perhaps even the high of 26 cents within a year based upon tangible fundamentals. Strip out the cash and 26 cents is on an e/v of $90m and a p/e ratio of about 6.5x which is nowhere near what could realistically be called expensive. If the company continues on it's current trajectory, 20 cents will probably be considered cheap when we look back this time next year.
Based on known knowns, i'd consider a 15x plus cash p/e ratio as unjustifiable at the moment but that's 51 cents per share…….I'm recommending not to buy at that price because you'll be buying my stock….lol.
Another thing to consider is that markets are over valued currently and when the pullback occurs, it's the dividend paying stocks that cash rotates back into.
