RE:Large disconnectIssue is not coming at the low end of the guidance ( many companies have missed revenue - PHO atleast came in within range) - issue is guiding lower 8 to 9. That too is ok, but what will be the guidance for Q1 2019? are we going to 6 to 7M or 10 to 12? that is the uncertanity i foresee. Again that is not in their hands - depends on cycle turning up.
Couple of ways to overcome that:
a) acquisition - 43 M in cash in hand with zero debt. They can buy out a 100 to 150 M company with very good growth prospects. Any bank will be ready to fund them, i dont see any issues.
b) new products - will it generate revenue fast - i have no clue, probably it will make up for the lost rev, but this is coming that is for sure.
c) China deal - they signed the deal in aug 2018 - Jan onwards we should see revenue trickle, will take time but this is going to happen.
Mr market does not like Uncertainity hence you see the stock being sold off.....
Pretty normal for cyclical companies - does not mean PHO will go bankrupt , it is a good little company which pretty much needs some time to prove themselves - they were almost there but hard luck. In about 2 to 3 yrs time we will see this at $3 +, in the short run i have no clue where this will settle down.
Cheers!!! GLTA