Opinions
Fabrice Taylor
Colabor Group Inc.
GCL-T
TOP PICK
Dec 02, 2016
Stock price when the opinion was issued
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A distributer to restaurants. They ran into some debt trouble and cut their dividend. Now we are back in recovery mode. As they pay down their debt investors will become more interested. He is still a little skeptical and would like to see a couple more quarters. He is concerned about a lack of revenue growth.
A Top Pick in December and August. Did well at first and then had a couple of bad quarters and they lost a contract. The insiders keep buying it, so he is still Long and has high hopes for it. Hoping that when earnings come out in about 2 weeks, there will be a positive surprise.
(A Past Top Pick Dec 2/16, Down 45%) It was a turnaround that checked all the boxes. It started off okay but the wheels have fallen off. A vice chair has invested a lot of money and this gives him hope. Q3 of this year was supposed to have been the bottom. If they turn it around the stock could triple.
(A Top Pick August 21/2017, Down 58%) Likes turnaround stories like this. Started out well, but then the wheels fell off. Has kept nibbling at the stock. Management has been refreshed. 1B in revenue on a 40M market cap. He’s anticipating 30M per year of extra EBITDA. Starting to see light at the end of the tunnel.
This is a food distributor, and is a turnaround idea. In a turnaround, there are a few things he likes to see. 1.) It should be a really simple business, because he doesn’t want some tech company that could be supplanted by something else. The company distributes food to restaurants and grocers, very simple and easy to understand. 2.) He also likes a long history, because then you could look at past financials and figure out where it might go. The stock price used to be much higher, $12, and now $1. 3.) 3.) Signs of improvement. Their business got hurt because they acquired debts, bought businesses, and didn’t pay attention to their margins which got crushed. We have now seen 2 quarters of improving margins. There has been a rights issue to fix the balance sheet to pay off some debt. They brought in an insider, someone with an impeccable 25-year track record in that business, which put $5.5 million of his own money into the rights issue. (Analysts’ price target is $0.95.)