Evome is a turnaround situation with a heavy debt load. A new CEO joined a year ago to restructure the business and sell non-core assets. I thought Q2 might paint a clearer picture of the progress made so far, leading to a valuation rerating. The company was almost priced like it was going bankrupt, so any positive change in expectations could lead to a solid upside.
The results were not overly impressive, in my opinion, but management shared exciting details about their plans to sell a couple of remaining non-core assets on the earnings call. If executed successfully, these sales could allow the company to fully clean its balance sheet and execute on the growth opportunity in its core Biodex division.
The shares soared following the results, although they pulled back a few days later.
Stock price when profiled (August 6): $0.10
Closing stock price yesterday (August 27): $0.125
Return: + 25% (the stock went up 80% at some point during the month)