Why the 3Q Investor ReactionXLY has become an interesting turn-around story, and are on a nice path back to profitability. So why the negative reaction? So as an investor, I am thinking what can be the major disappointments.
First, large debt servicing is a big drag. 2nd, although they are increasing CDN market share, production limitations were a surprise. 3rd, no view for entry to US market. 4th, any hiccup to execution could lead to more share dilution, or increased debt.
Investor buy-in will depend fully on their confidence that the XLY ship will be kept steering in the right direction.
I for one, has a relatively high degree of confidence.