why the company is not taken seriously right nowOn the Q1 earning call in mid May (half way into the second quarter) the previous CEO provided guidance or reiterated guidence that 2015 volumes would be up another 15% - plus, and that pricing conditions continued to improve.
Approximatley one month later,the company put out a press released saying that second quarter volumes had suddenly declined. There were vague references to a management change at CEMEX.
Only a month or so after that, on July 15, the company put out a release stating that the relationship was back on track and that prior second-half estimates were still good. Clearly this was not the case. Essentially the stock has headed relentlessly lower since May 2015 when the erroneous 2015 guidance was uptdated. And, yes, you couldn't have otherwise missed if you were in any other material company over the same period.
There has never been a discussion or reconciliation about that confusing communication, and there have been vague references to CEMEX possibly not being in compliance with the supply agreement ("we continue to work with, eta, etc, etc....). Also during that summer 2015 period there was a change in the CEO, and the confsion was handed to the new guy, but he is not seemingly sanctioned by the BOD to clarify what happened.
In the meantime, PLS has announed the termination of the strategic alliance -- I would have thought a positive development -- though people are so confused about this thing, they're not sure or will assume otherwise unitl......
Also in the meantime, Vulcan has purchased their second largest customer -- I would hve thought that positive, yet until proven otherwise maybe that a bad thing too.
The stock trades at the lowest point ever, excepting the brief period when the company's solvency was in question because of lingering debt maturity related to the first PoLB facility..
Valuations abound that suggests that Polaris today sells for a fraction of an acheivable price in a private transaction. Yet the Chairman of the Board (and he's not the only one) owns less than $20,000 worth of stock. I'm all for patience and letting the stock price find its proper level, but that assumes transparencey and basic credibilty, which is in fact clouded because of what occured back in 2015.
Until 1. The Cemex business is meaningfully diluted by other customers (ie, PoLB, Hawaii, whatever else they're working on), 2. The company can make a statement about an agreement on pricing and volumes on the long lingering CEMEX issue, 3. Insiders make some purchases (I'm not sure what scale) that shows beyond a doubt that they believe what's in the investor presentaion (a stock price that is only minimally prospective is twice todays value), or 4. they come out with a truly surprising EBTIDA number, nobody is going to care. They might as well skip the investor relations, because they don't suffiently address those issues, which is all anyone cares about. The stock acts like there is something wrong with the business. I don't think that is the case, but the people that count (today's sellers and non-buyers fo PLS) do.
I've personally have bought more stock and will contunie to buy more at these prices. I'm not sure I'm right, but its hard to imagine how much worse it could get, considering the underlying asset is indisbutablely a large, stratgically important, and irraplacebale property. Wonder for how much longer I will look like a fool.