Post by
FormerHedgie on May 02, 2024 2:27pm
CAUTINON - The last time the stock ran, ended in a FINANCING
A NOTE OF CAUTION - I have seen this pattern before.
I have owned this stock in the past and there was always so much promise but the stock was always range bound. The last time the stock had a good run like this off of the back of improving revenues / profitability the did a financing.
Following the financing, the stock sold off and was range bound for quite some time. It seemed to me that in order to make it look like revenues / profits were going up that they pulled forward sales from susbesquent quarters (often referred to as channel stuffing).
The problem is that when you pull sales forwared to the present, they don't need the product in the subsequent time frame so a good quarter is followed by some weak quarters.
I looked at the balance sheet and I was suprised to see the dramatic "improvement" in working capital items, especially inventories year over year. It declined by 50%. This suggest to me that the company was reducing working capital to support its case needs. I suspect that after these attemps, they still need cash.
I will not be suprised at ALL to see a financing come imminently. I think the last time it was lead by Cormark who bagged people using the same strategy.
Again just a note of caution.