50M$ MB is currently asking the Gouvernement du Québec either a loan or a subsidy of 50M$ in order to build a new plant.
That plant will have modern equipment and will be able to reduce (except for raw material costs) production costs.
Reduction in production costs = a higher gross margin.
In 2015, if the warrants are exercised, current shareholders will be diluted but, if MB uses that fresh money to buy back bonds, 15 to 16M$ of interests will be gone, increasing our earnings. EPS ratio should stay the same despite the dilution.
Since 2011, MB has positive cashflows from operations which is in my opinion more important than earnings. Why? Earnings are a way to know if a company makes money by accounting standards. Cashflows from operations are a way to know if the comapny makes any money at all.
Victor has been buying shares with his money last september.
In spring 2012 when the stock hit a year low, a anormally huge volume of bonds have been traded. Afterwads, stock price rose until end of 2012. In the end of Jan and in the begining of Feb, another anormally huge volume of bonds have been traded again. Since then, the stock price is rising.
IMO, we will se Q4 and Y2012 results over analysts' predictions.
Sources :
https://www.lesaffaires.com/secteurs-d-activite/commerce-et-produits-de-consommation/mega-brands-veut-obtenir-une-aide-de-50-m-pour-une-nouvelle-usine/554716
https://avantgarde.lesaffaires.com/bourse/analyses-de-titres/mega-brands--victor-bertrand-achete-4-m-d-actions/549013
https://tmx.quotemedia.com/charting.php?qm_symbol=MB
https://tmx.quotemedia.com/charting.php?qm_page=33108&qm_symbol=MB.NT