Benj Gallander
Liquidation World
LQW-T
PAST TOP PICK
Apr 05, 2010
(Top Pick Mar 12/09, Down 33%) Has been the worst beat up stock in his portfolio. New management felt they could turn it around very quickly. It’s taken longer than they thought because things were worse than they thought they would be. By end of week they should have worked out debt problem with their bank. Don’t buy it now.
New management has refurbished a number of stores, which are now starting to see a good pick up in same store sales growth. If management can continue to execute, this can be a very good stock in a couple of years.
They are at a critical juncture right now. They have to have earnings from Christmas. In old stores, same store sales are going down. They have been opening new stores and rejuvenating old ones and now same store sales are going up. They are not out of the woods. There is a lot of risk.
Part of the pressure on the share price is related to financing they are in the process of doing, which they announced last week. New stores are doing quite well but half of the chain is still in the older stores. There is some strategic value here.
(A Top Pick Nov 15/10. Down 52.6%.) Got Sold out using a stop/loss at around $0.90 but still holds a piece of their debt that he is very comfortable with. Got squeezed by the bank and ran out of capital. Company is now up for sale. Still some value.
(A Top Pick Oct 7/10. Down 93.47%.) At the time, they were re-branding a number of their stores and were having positive sales momentum. Got up to $1.40 and then they started missing their numbers. Got out stopped out of most of his holdings at $.90 but still holds a small position.
You get 6 cents per share. This was a mistake. Thinks this is a done deal. If you cannot make money in the Christmas quarter, you wont make money all year.