What irritates me more than anything What bothers me the most about this is that I can't figure it out
I have busloads of people asking me why this is what it is, and I don't have an explanation that is even plausible to me.
Market distortions happen all the time, but are usually very brief.
I remember in the '80s when Loblaw's shares were beaten down to a point that they didn't even reflect the value of the company's real estate.
That didn't last long.
I contrast, this situation has been persistent, and is becoming increasingly difficult to attribute to nothing more than undue pessimism.
Consider these comparisons:
Greenlane has $54.8 million in equity and is capitalized at $115.74 million
Cielo has $33.7 million in equity and is capitalized at $119.2 million
Xebec has $289.7 million in equity and is capitalized at $ 137.7 million.
This is becoming increasingly difficult to explain.
I'll point out some more outstanding facts to underline what I see as a bizarre inequity in the market.
Greenlane has $23 million in cash, $11 million in receivables, $21 million in payables, and is trading at 2.167 times book value.
Cielo has $2.54 million in cash, $461,000 in receivables, $1.49 million in payables, and is trading at 3.6 times book value.
Xebec has $24 million in cash, $52 million in receivables, $36 million in payables, and is trading at 0.47 times book value.
Now take a look at the price-to-sales multiples, on a trailing basis...
Greenlane is trading at 1.97 times sales.
Cielo has no sales.
Xebec is trading at 0.93 times sales.
I probably shouldn't have included Cielo in these comparisons because while its tenure here is short-lived, in my opinion, I did so for amusement and to at least partially explain my difficulty in rationalizing what's going on.
I'm experienced enough in the markets to understand that they sometimes go to extreme extremes, but attributing the persistence of Xebec's weakness to bad sentiment is wearing thin amongst the people I answer to.
It seems to me that there's a contingent of people making a very big bet against Xebec's management.
If I was in management, I'd take it very personally.
It certainly isn't going unnoticed.
I keep waiting for the market to correct what I see as a major imbalance, and I'll breathe a huge sigh of relief when it does.
In the meantime, least I can take some small solace in the fact that the Chairman of TD bank remains on the board.