FormerXBC Inc XEBEQ

RE:RE:Oftentimes valuations don't make sense, take advantage of it

[Winston1]

Xebec is the cheapest stock in this sector, by far. Sure the company has issues with profitability right now, but which company in this sector doesn't? They all do right now, and they're all trading at much much higher valuations than Xebec. The reason is sentiment. Everyone and their mother hates Xebec, but eventually people start to realize that it's been punished enough, the downside risk is minimal compared to its upside potential, and people start buying, then more people start buying, and all of a sudden we're in a much more reasonable $2-3 range. Seperating emotions from investment decisions is the hardest part about investing, but when you can do so, you can pick up some real bargains. 

tony08 wrote:

Winston1 wrote: In January 2021, Xebec was trading at over $11.50/share with a market cap of $1.75 billion. Their 2020 revenues were $56.5 million. That's an absurdly high 31X sales valuation. Today, Xebec is trading at 84 cents with a market cap of $130 million. Their 2021 revenues were $126 million. That's about a 1X sales valuation. Much more reasonable than last year, perhaps even unreasonably cheap. You decide. 

 

Indeed, I believe there was a lot of speculation when Xebec rose very quickly to $11.55.

Some will say that I was a little too careful but the first time I bought this title at $1.98 and I sold them all in December 2020 at $5.98 with the intention to buy them back later.

Subsequently I watched the stock continue to rise to over $11 and I couldn't believe it....

 

Today I think about all that and my perspective has really changed...lol