Post by
CSIGroup on Aug 05, 2015 6:38pm
Clifton Star drops to half its cash value
Clifton Star drops to half its cash value
In a recent letter to shareholders, Clifton Star management referred to themselves as seasoned industry professionals pursuing a long-term plan to increase shareholder value. But what does that really mean? The stock is trading 40% below its twelve-month high, and at barely 50% of the company's cash value. A dissident group led by a prior company executive bowed out from their challenge against current management. Despite the fact the battle is over, shareholders show no confidence in current management as indicated by the steady erosion of the stock price in recent months. Looked at in a different way, Clifton has no reason to support the stock.
Recently, Clifton said, "...the board wants to assure all shareholders it has remained steadfast in its commitment to execute on its business plan and create long-term value." It stated it had $13.7m dollars in mostly cash assets as of March 31, 2015. Now is a good time for them to explain, in specific terms, what is the long-term strategy and the steps they have taken (and will take) to fulfill that strategy. This is shareholder money and is not to be looked at as a long-term annuity plan existing solely to benefit Clifton management. Now would also be a good time for management to be more transparent about the details of their cost-cutting efforts.