RE:Better Analysisretiredcf wrote: When asked if someone should buy, sell or hold. GLTA
STC beat sales estimates slightly by 2%. Met EBITDA estimates but missed heavily on EPS estimates of 6 cents reporting a loss of 33 cents. Sales were up almost double compared to last year due to the Star2star acquisition and the larger than expected loss was due to transaction and interest expenses from the NetFortris acquisition, which did not contribute anything to the quarter due to the timing of the closing. Supply-chain issues continued to weigh on gross margins, but only slightly in the 1-2% range. However, STC has been able to meet all customer orders. Overall it was not the best quarter, but certainly not a disaster. We think the company will navigate supply-chain issues well, especially as its revenues continue to become more service-based. We would wait for shares to settle before averaging down and would HOLD for now. (5iResearch)
In reaction to the comments, I looked at this again and I think people are selectively reading what 5i wrote. In my view, this is a generally positive review. The EPS estimates would presumably have come from the institutional firms that cover the company (TD, Acumen, Cormark, BMO and Canaccord). But as they indicate, the timing was unfortunate because in this quarter, they were hit with all of the costs of the acquisition without getting any of the benefits (which should begin to show up on the bottom line in the next quarter). And It was not "just short of a disaster" but instead "certainly not a disaster" which has a very different meaning.
As mentioned, these are very tough markets which have punished some companies that significantly beat earnings never mind anything else. But the point is that we are pretty much at the bottom of the hole here and barring a complete market meltdown, we should soon begin the long climb upwards. The HOLD recommendation (which is being applied to a lot of companies these days) is understandable until there is some relief from the significant pressure currently being applied to small and mid cap stocks. But unless you need to immediately record large capital losses or have been hit by margin calls, it doesn't make much sense to be selling at these levels. All IMHO of course. GLTA