stressed seller

Interesting to watch the panicked seller(s) since the half year result announcement.

The result was largely in line with the December trading update and whilst it exemplifies the continued trading difficulty Coffey is experiencing, I am somewhat surprised by the SP sell off. Nothing new to get panicked about apart from the lack of a dividend.

COF really boils down to whether you can have faith in the regeneration/restructuring taking place or whether as the last two days trading would suggest some believe COF is going to slide into a terminal illness.

The positives were reaffirmation that the recent resructuring will deliver on cost savings, now specified at $18m annualised, and importantly that $6.5m of this savings will flow through into H211.

Hard not to see H@ being considerably better without the one off restructuring costs of $5.3m and with the cost benefits of that resructuring taking effect.

While I would concede that COF is probably partly at least in this position now because costs weren't contained earlier, I tend to feel that a positive change is occuring, hense I have bought stock today, a day when my old friend Mr Market seems to be throwing COF scrip away.

I do also agree with the comments that restoring revenue may come at the cost of margins, but I feel all the negatives are in the open and priced into the SP accordingly.

Refering back to some of Camden55's excellent posts if you consider that over the next 2 years COF will be able to return to Normalised EBITDA of $50m + today the stock is selling on an EV/EBITDA 4.2.

Not without risks but worth a hold from today's lows IMO.