There is a history in my post that goes back a ways with Capraise. He has consistently been negative on this stock, and has used price as a 'vindication' factor when it fell from 2.1c to 1.6c, so I was poking fun at his reversal in tactics, now to say 'price means nothing' is an exact reversal of his previous position.
Furthermore, you missed some of the point: 1. Earnings here are not negative, they have, in fact been positive for 5 consecutive quarters, which is a turnaround story and proves their plan is working (albeit slowly). 2. Revenue doesn't count? Tell that to every junior pot/tech stock that currently is valued at 100mil+ on 'scalable revenue' 3. This stock has made ~1million in FCF in the last year, for an MC of 20million, and revenues of 100million expected this year, show me an ASX peer with similar metrics. 4. They have seen organic growth in nearly every region for their managed services business, which has higher gross margins on revenue, and as that grows, the revenue should (and according to the company) cause greater net profit margins (go back and read their 5 year plan) 5. In the years of growing revenue, they have also acquired businesses for very little in equity purchases and have started paying back that debt with FCF, which is important as they will then have more flexibility if other businesses present themselves.
Yes there are risks, every business has risks, and a slow decline out of the capital products business and into the managed services may have some wins and losses from a contract win and revenue consistency point of view, but the additional margin on revenue is worth it, and it's a more australia focussed business, with less foreign competitors.
CNW Price at posting:
2.7¢ Sentiment: Buy Disclosure: Held
