RE:RE:RE:RE:RE:Cohodes says a very bad week aheadThis is all about accounting, not business strategy. Of course they can invest in growth, but performing an engine overhaul on a 30 year old plane is not generally a capital expenditure; it is part of the everyday cost (maintenance) of running the business. Nor are planes capital expenditures when they will be stripped and sold for parts (like your local auto wrecker). Management has used aggressive accounting techniques to portray their business as high growth whereas the reality is that they are operating a low margin, low growth business. And dividend hikes added to the illusion.
EIF is a sustainable business, but the dividend needs to be reduced, which will result in a lower stock price. Technically, the chart does not look good. The massive bearish engulfing candle of last Thursday (on almost 3 times normal volume) is extremely ominous. Based on my model, a close below 27.50 could usher in a swift downdraft.