FormerXBC Inc XEBEQ

RE:Xebec. Unduly punished by circumstance and timing?

[tamaracktop]

tamaracktop wrote: Very possibly.

Among the heavyweights in C/E, and a couple of small caps in the sector often mentioned on this board, Xebec was the very first to reach its all-time high.

Xebec traded at $11.55 on January 18th 2021.

Plug peaked on January 26th.
Ballard peaked on February 9th,
FuelCell and Pyrogenesis both peaked on February 10th.
Greenlane peaked on February 17th, a month later than Xebec.

When Xebec announced revised guidance on March 12th, it dropped from $7.94 to close at $4.06 on March 16th. That was 3 trading sessions. 
It was essentially cut in half in 3 days.

On March 16th, which was at the neonatal stage of what has been a protracted bear market in this sector, Xebec was already off 65% from its high due to company-specific news.
It had already been severely damaged when the real trouble for the group as a whole was just beginning.

On March 16th, Xebec was off 65% from its high. It has fallen a further 47% since then.
On that date, Ballard was only off 25% from its high. It has fallen a further 58% since then.
On that date, FuelCell was only off 48%. It has fallen a further 71% since then.
On that date, Plug was only off 43%. It has fallen a further 47% since then.
On that date, Greenlane was only off 38%. It has fallen a further 36% since then.
On that date, Pyrogenesis was only off 18% from its high. It has fallen a further 65% since then.

Xebec was already in the penalty box on March 16th, a date that has been followed by damage to heavyweights and pseudo-comparables ranging in magnitude from 36% to 71%, and averaging 55%.

It would have been near-impossible for Xebec to recover in an environment where those around it were seeing their stock prices being bisected.

Xebec stock was already off 65% in mid-March, before the others had yet to be halved.
It had already been severely discounted by company-specific news.
News of a temporary nature that has and is being addressed, as has been demonstrably proven by improving margins in sequential financial releases since then.

Q4 will be a big one.
Despite their lukewarm prognosis, TD has acknowledged that Q3 "may have been an inflection point."


Xebec actually hasn't done any worse than the others over the last 10 months, but it was already off 65% at the beginning of this grueling period.

Personally I think that's enough.

Xebec is now trading below book value, with 100% revenue growth and a clean balance sheet, and is about to report record ebitda.

Xebec has already been thoroughly chewed up, and what hasn't been digested has
been spat out.

In the big picture, Xebec has gone from a small compressed-air company in Quebec to a company with a worldwide presence in a few short years.

Xebec is clearly a tremendous opportunity here.

It's time for rational evaluation of what's happened here.

It's time to realize that the risk/reward parameters here may well be once-in-a-lifetime, if you're
investing with a timeline of more than a few weeks or months.

It's very likely a tremendous opportunity for traders as well, although I'm not advocating trading this.

There comes a time when it really does pay to be a contrarian, and there's no question that being bullish on Xebec today is taking a very contrarian approach.

Green lights aren't going to start flashing and horns aren't going to start blaring when Xebec makes its low, if it hasn't already.

We may not be there yet, but we're very very close.

The downside here is infinitesimally small compared to virtually unlimited upside over the next 5, 10, or 15 years.

The upside over that time-frame is literally unlimited, and is constrained only by how long you hold it.

I'm not suggesting people should necessarily rush out and buy it, but for God's sake don't sell it.

It could turn out to be one of the worst decisions of your life.