A Blog for those posters from the SVNT message board on Yahoo! who share a special camaraderie and mutual respect for each and their investment ideas, and who would like to extend that positive experience into other profitable opportunities in the future.
Others should feel free to make comments that add information, ask questions, or otherwise clarify topics discussed here. I can't say that I won't moderate such comments, but only in egregious cases (insulting, spamming, etc.)
Alex, I read the conference call transcript and was impressed with the knowledge of the mgmt team and the one analyst. The recent Delphi purchase appears to be at a great price with much synergy. They have a great cash position with no debt but are a true micro-cap. I am a bit concerned about their low GM since I have a mfg background and have not seen margins this low in any mfg company where I have been CFO (5 companies). This would indicate to me they have significant operational room for improving GM. I will make a modest investment since I am currently 55% cash. I only own AMGN, CSCO, PPL and SVNT since I just sold VZ. Good find.
The low margins and mention of SANM clear things up a bit. I trade SANM a lot and their market cap is $900+ million but revs are $6+ billion. So the $58 million market cap for SPA with expected revs north of $200 million makes more sense. At the same time I can see why you see $8 as a target. Earlier today I was thinking double digits, even $12, with a decent expansion of margins.
Justa -- If you take a look at the quarterly earnings releases and the recent presentation slide deck on the web site, you will see that the three segments have quite distinct margin levels. The Defense segment and medical segment have significantly higher margins than the "Electronics Systems" (ESS) segment.
Tried to get shares on Wed, Thur and Friday to no avail. No one is interested in selling in the $5.50 to $5.60 range. I think it is a solid stock but I will not chase right now. The volume is so low any little bid moves the stock. I believe the market will retreat in Oct and thus I have built my cash position to make purchases. I am going to sit on the sidelines for a correction to 9500-9700. Not a lot of stocks I want to own right now.
Alex,
ReplyDeleteI read the conference call transcript and was impressed with the knowledge of the mgmt team and the one analyst. The recent Delphi purchase appears to be at a great price with much synergy. They have a great cash position with no debt but are a true micro-cap. I am a bit concerned about their low GM since I have a mfg background and have not seen margins this low in any mfg company where I have been CFO (5 companies). This would indicate to me they have significant operational room for improving GM. I will make a modest investment since I am currently 55% cash. I only own AMGN, CSCO, PPL and SVNT since I just sold VZ. Good find.
Bob -- In this space, gross margins typically are quite low. Compare them to Sanmina, Flextronics, Jabil.
ReplyDeleteThe low margins and mention of SANM clear things up a bit. I trade SANM a lot and their market cap is $900+ million but revs are $6+ billion. So the $58 million market cap for SPA with expected revs north of $200 million makes more sense. At the same time I can see why you see $8 as a target. Earlier today I was thinking double digits, even $12, with a decent expansion of margins.
ReplyDeleteJusta -- If you take a look at the quarterly earnings releases and the recent presentation slide deck on the web site, you will see that the three segments have quite distinct margin levels. The Defense segment and medical segment have significantly higher margins than the "Electronics Systems" (ESS) segment.
ReplyDeleteTried to get shares on Wed, Thur and Friday to no avail. No one is interested in selling in the $5.50 to $5.60 range. I think it is a solid stock but I will not chase right now. The volume is so low any little bid moves the stock. I believe the market will retreat in Oct and thus I have built my cash position to make purchases. I am going to sit on the sidelines for a correction to 9500-9700. Not a lot of stocks I want to own right now.
ReplyDelete