stock getting smashed, page-2

Hi Ultra ... would be interested to know where you think this should be trading. Although I don't mind the stock in parts, and its an industry I reasonably understand, I see the following as slowing any re-rating in the near term:

* June 2010 balance sheet has high number of deferred payments for the various purchases ($8M current and $9M non-current).
* Their finance facility (from director) was close to fully drawn at balance date (not saying negative, simply a fact).
* Their acquisition strategy will either more heavily gear the business, or require material equity issues (ie. the recent "exclusive talks" opportunity is stated to cost $15.7M plus $4.3M deferred with funding souce yet TBC). The actual EBITDA multiple implied by this (if the uplift in EBITDA is $2M then presumably this is what the business generates) of say 8 is not on the cheaper side.
* I do see some integration risk with the number of acquisitions.
* Comparing it to, say HOM, both are trading on low PE ratios (I realise different structures ... however to compare with something).

Overall not a stock I object to, however hard to see what will re-rate it in the short term.

MJS