IssuesHey subaru1,
I largely agree with you that VTX looks very interesting as a business and potentially underpriced.
But I see there being two issues here. The first, which probably gets the most attention among investors, is the level of debt.
Note this issue was raised in a "Simply-Wall-St" article dated January 4, 2023. You might want to take a look at it.
I'm not so troubled by a high debt load if the cash flow picture looks strong. For sure the debt servicing costs will have a big bump up in the Q4 results but if you believe the Q3 outlook then those debt service costs should be easily manageable. Indeed, if cash flow is strong enough, a high debt level can actually be a good thing because the leverage works in the optimal direction--i.e., up.
The much bigger issue in my mind is the hints I'm seeing about the corporate culture. I guess you'll never really know unless you're on the inside . . . but take a look at the employee review page on the ca.indeed.com website. Here's from one of the most recent, dated March 1, 2023.
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Terrible work environment, zero support from upper management. Management make it known to support staff that they are beneath them. Office favorites are highly acknowledged and not paid accordingly based on education/previous work experience and receive preferential treatment with no rules ever applying to them as they do to the other staff. Very unprofessional workplace!
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So much for the whistleblower policy, eh?
And there are many, many other employee reviews that are sort of like this. And it's not just from job positions where you might expect people to be coming and going regularly. There are negative reviews from scientists, mid-level administrators, that sort of thing.
Is Terry the right guy to be running this company? I don't know. But if he's not . . . well . . . I wouldn't be surprised if he's NOT going to admit it.
Regardless, it sounds like this company has an entrenched operations management problem.
Throw in the debt level with that and you can see the potential for negative surprises.