Q: Would love your thoughts and analysis on this small manufacturer in Nanaimo BC.
Has been slowly moving up since its bottom and reported today!
Thanx Gary
Has been slowly moving up since its bottom and reported today!
Thanx Gary
5i Research Answer:
As an engineered wood products company, is has some cylical and tariff risks. It is also fairly small at $62M market cap which adds another risk. Q1 EPS of -1c slightly beat estimates. Revenue of $11.1M beat estimates of $9.7M. EBITDA of $0.59M beat estimates by 57%. The stock has been hit hard this year, down 32%. Debt is very high, with net debt at 4X cash flow. Considering all the risks noted above, we would expect it to trade at a lower valuation of 24X earnings. Still, EPS is expected to recovery nicely (75%+) next year and the stock is acting better. Insiders own about 15%. We would consider it too risky for strong endorsement.