RE:Debenture Arbitrage The Bear CaseAgreed IF, good to have you aboard...with the debenture arbitrage unwound should see the end for any need of the RS and shift the focus to the increasing sales and market share. With all the fuel in the pipeline to be rolled out by year's end, including even better quality product hitting shelf later this year or early '20 your price targets look very doable, JMHO....Opt
IndomitableFire wrote: The bears came out full force on Friday. Their top reasons: debenture arbitrage (old news) and slightly overheated short term technicals. The bears barely have two legs to stand on at this point with the consumer market sending clear signals to investors that Supreme is leading the field in product quality giving them a competitive advantage in the marketplace to demand a $ premium for their product.
This recent dip should be looked at as a buying opportunity and I think large institutions are thinking the same. Hence the overly dramatic downward pressure we are seeing on the stock just two days before earnings are released. It's fairly obvious after researching buy and sell orders that a handful of large entities are pressuring the stock down before earnings to accumulate shares at a lower level. They want a little more meat on the bone for the run that is to come.
Every informed investor knows Supreme has a full pipeline of milestones to be completed mid way through this year which will undoubtedly catapult it to new all time highs. Anyone in the know, knows that 2019 is the year Supreme breaks out. The debenture arbitrage play has been valid in the past but in my opinion will soon be unwound in spectacular fashion. Maybe this week if financial results are strong enough.
Imagine all the new analysts initiating coverage and sending buy recommendations to their institutional clients. This should give Supreme enough momentum and their financiers enough confidence to let the stock rip and cash in their chips.
Quick Capactiy and Revenue Notes:
Current Capacity - 17,500 KG
Current 12 Month Revenue Run Rate: $105,000,000
Capacity by June 2019 - 50,000 KG
12 month future Run Rate by June - $300,000,000
Price Target by June 2019: $5-$7 for SPRWF
Price Target by June 2020 - $10-$15 for SPRWF