Post by
ChaseYourDream on Aug 23, 2016 5:17pm
Steady as She Goes
Been watching my friend Epicore since selling at 0.69. Too solid. No chance to buy in cheap. Trading at high end of .55-.71 since May 10 FS, and mostly .64-.69 for over a month.
As with most companies there is a longer wait from the Q3 to the AFS. Expect it mid-October.
Q3 is usually the seasonal peak revenue, but Q4 has been solid at $2.1m to $2.4m the last two cycles. Q3 2016 was the 2nd-best quarter in 3 years, but overall 2016 revenues have been modestly lower than 2015.
FY revenues have grown from $5.6m (2013) to 7.6m (2014) to 9.7m (2015) so with $7.2m in the bank after Q3, 2016 revenue may disappoint below $9.3m, or surprise above $9.6m. This is an analysis of past patterns, not an analysis of Epicore's primary revenue in ratio to worldwide conditions in shrimp farming.
What continues to impress me is that through all these variables Epicore has produced a positive EPS every quarter. This is a blue chip pennystock. Buy low and wait doubled my money in 6 months, and I sold only to buy other undervalued bargains.
I can see two reasons the market may over-react negatively to the AFS:
1) flat revenue growth year to year (probable but no biggie); or
2) a quarter that freakishly may not produce a positive EPS (if not now, when? One quarter out of four, so what if the fundamentals are unchanged.
But I made my money when many Chicken Little's freaked out after the Q2 this year. What I have been watching for is temporary SP decay (nada), so to get into this excellent company what's your strategy?
Do you hope to see another over-reaction if the AFS is not stellar, and load up on another ridiculous drop in SP, or are you taking Buffet's advice, looking past any quarterly vagaries and recognize that this is one of the most solid companies trading under $1/share, period? Meaning, buy and come back in 5 years.
I'm a contrarian trying to add 50% to a little pot before I have to spend it, so I doubt I will buy again above .60 (for now). If the numbers in October are better than expected, and I don't get a chance to buy in again by cashing in before then on a big win in another position, when you do well holding this stock long, raise a glass to me, eh?
And if the October numbers spark a panic to under .55, don't be surprised to see me buying! GLTA CYD