Two Plus Two Publishing LLC Two Plus Two Publishing LLC
 

Go Back   Two Plus Two Poker Forums > >

Notices

Business, Finance, and Investing Making money, investing in markets, and running businesses

Reply
 
Thread Tools Display Modes
Old 05-05-2016, 11:39 PM   #51
BCI23
grinder
 
Join Date: Jun 2008
Location: MN
Posts: 475
Re: PDEX - My Largest Position

Quote:
Originally Posted by scrolls View Post
Isn't this a bearish signal? 10b5-1s are for insiders to sell their stock back to the company, not (as I understand) for companies to repurchase shares in the open market.
99% of 10b5-1 plans are intended for insiders to sell stock but they can also be used to buy stock as well. In this case they want to be able to buy stock when they otherwise would be in a blackout period so an automated 10b5-1 plan allows them to do that.

"The 10b5-1 Plan was established in accordance with, and as a part of, the Company’s previously disclosed share repurchase program. Repurchases under the Company’s 10b5-1 Plan will be administered through an independent broker."
BCI23 is offline   Reply With Quote
Old 05-06-2016, 12:17 AM   #52
BCI23
grinder
 
Join Date: Jun 2008
Location: MN
Posts: 475
Re: PDEX - My Largest Position

scrolls 10b5-1 plans are normally used for insiders to sell stock in the open market, not back to the company
BCI23 is offline   Reply With Quote
Old 05-06-2016, 04:35 PM   #53
scrolls
veteran
 
scrolls's Avatar
 
Join Date: Nov 2011
Posts: 2,090
Re: PDEX - My Largest Position

Ok cool, must have misinterpreted it. Thanks.
scrolls is offline   Reply With Quote
Old 05-12-2016, 04:43 PM   #54
Bobble_Wobble
centurion
 
Bobble_Wobble's Avatar
 
Join Date: Jul 2008
Location: Bay Area
Posts: 108
Re: PDEX - My Largest Position

Quarterly results (hope the link works).

http://irdirect.net/filings/viewer/i...3442416000747/

BCI is more well versed in this so I'll wait for him to comment. Looks like he was fairly in line with actual results.

BCI - curious to hear your take on the impairment charge and what it means long term.
Bobble_Wobble is offline   Reply With Quote
Old 05-12-2016, 05:03 PM   #55
Malachii
veteran
 
Join Date: Feb 2005
Posts: 3,204
Re: PDEX - My Largest Position

The fact that there was Goodwill impairment is indicative of honest management. How it works is management will do an impairment analysis on Goodwill and the Auditors will audit that analysis. Given the trajectory of their stock price, they probably could've argued that there wasn't any Goodwill impairment at all. Also, this was a quarterly report, not an annual audit, so they almost certainly could've deferred the impairment charge if they wanted to.

So, without knowing the specifics of the impairment, I'd say the fact that they recorded an impairment charge when their stock has been on an uptrend is actually a good thing. Plus, it's a non-cash accounting adjustment, so not that important.

Last edited by Malachii; 05-12-2016 at 05:12 PM.
Malachii is offline   Reply With Quote
Old 05-12-2016, 05:35 PM   #56
Wealth$
adept
 
Wealth$'s Avatar
 
Join Date: Nov 2015
Location: rose that grew from concrete(2p2)
Posts: 1,199
Re: PDEX - My Largest Position

looks like you almost have a double, do you have a price target / intrinsic value price??
Wealth$ is offline   Reply With Quote
Old 05-12-2016, 06:19 PM   #57
scrolls
veteran
 
scrolls's Avatar
 
Join Date: Nov 2011
Posts: 2,090
Re: PDEX - My Largest Position

Most important points (IMO):

1. By my monkey math they're running at 40% capacity of their manufacturing plant. The next ~$14M in annual revenues (filling out the second shift) will flow to the bottom line much better than the last couple million. They just implemented a second shift which sucks for margins in the short-term but will be great if they get some other projects going...

2. They're working on "a number of significant proposals." Could be big.

3. How did others read into the following: "The decrease in sales to this customer is due in part to a mutual agreement between our customer and us to allow them to take deliveries of existing purchase orders in full over a mutually agreed extended term ending in December, 2016." We already knew about that customer's $1.6M purchase decrease this year, but that makes it sound like the customer might be leaving for good after 2016? Not sure if I'm reading it correctly or not.

4. Glad Ramsey/Riverside is done with. 17.6% return in that time period isn't bad.
scrolls is offline   Reply With Quote
Old 05-13-2016, 12:07 AM   #58
BCI23
grinder
 
Join Date: Jun 2008
Location: MN
Posts: 475
Re: PDEX - My Largest Position

Everything looks good. Good details on the medical device products. Rick also highlights how much excess capacity they have to still utilize:

"Product shipments related to these devices are expected to last for at least five to seven years, based upon the term of each underlying supply agreement and both agreements allow for automatic renewals of one to two years. Additionally, in the second quarter of fiscal 2016 we completed the design of another CMF surgical driver for another customer allowing us to recognize previously deferred development revenue and commenced product shipments. Product shipment of this device is expected to last at least seven years based upon the term of the underlying supply agreement"

"Based upon our current medical device production volumes, we have implemented a second-shift for production which is currently running at approximately 20% capacity. We believe that we can expand our capacity by adding work force to our second shift and may eventually consider a third-shift for production if necessitated."

"We also have a number of significant proposals outstanding with customers for new projects and in fact believe that we are close to finalizing terms on a new engineering project for our medical device core business"

Only 500 shares repurchased so far under the buyback plan. Hard to say how rounded the $2k number is but that implies they are buying up to $3.73/share. The lowest trade from the 23rd to the 31st was $3.30.

The current 10b5-1 Plan became effective on March 23, 2016 and through March 31, 2016 we repurchased 536 shares at an aggregate cost of approximately $2,000

$4.9m of backlog will ship in Q4 here. $390k of that is fineline molds and I believe the rest will be medical device related. I'm thinking $5.8m rev, 27% GP rate, and 645k ebitda in Q4.
BCI23 is offline   Reply With Quote
Old 05-13-2016, 12:12 AM   #59
BCI23
grinder
 
Join Date: Jun 2008
Location: MN
Posts: 475
Re: PDEX - My Largest Position

Quote:
Originally Posted by scrolls View Post
Most important points (IMO):



3. How did others read into the following: "The decrease in sales to this customer is due in part to a mutual agreement between our customer and us to allow them to take deliveries of existing purchase orders in full over a mutually agreed extended term ending in December, 2016." We already knew about that customer's $1.6M purchase decrease this year, but that makes it sound like the customer might be leaving for good after 2016? Not sure if I'm reading it correctly or not.
I don't read it as the relationship is ending. Last year the customer froze orders at the last minute for $1.6m of product that was supposed to ship in Q4 and Q1. They came to a compromise to ship that $1.6m of product over the course of the next year (Jan '16 - Dec '16). These orders only relate to that one specific orthopedic shaver product. Pro-dex sells other products to this customer, although the shaver is by far the largest in terms of volume.

Last edited by BCI23; 05-13-2016 at 12:20 AM.
BCI23 is offline   Reply With Quote
Old 05-13-2016, 12:19 AM   #60
BCI23
grinder
 
Join Date: Jun 2008
Location: MN
Posts: 475
Re: PDEX - My Largest Position

Quote:
Originally Posted by Bobble_Wobble View Post
Quarterly results (hope the link works).

http://irdirect.net/filings/viewer/i...3442416000747/

BCI is more well versed in this so I'll wait for him to comment. Looks like he was fairly in line with actual results.

BCI - curious to hear your take on the impairment charge and what it means long term.
The impairment wasn't surprising to me. They wrote off the intangibles associated with the Fineline acquisition. They said the acquisition had not been performing as well as expected. Long-term it means nothing, impairments are simply an accounting measure and are pretty subjective because they require a lot of judgment/estimates about the future. Chronic impairment charges are a sign of bad capital allocation but i don't expect that to be the case here.
BCI23 is offline   Reply With Quote
Old 05-13-2016, 12:26 AM   #61
BCI23
grinder
 
Join Date: Jun 2008
Location: MN
Posts: 475
Re: PDEX - My Largest Position

Quote:
Originally Posted by scrolls View Post
Most important points (IMO):

1. By my monkey math they're running at 40% capacity of their manufacturing plant. The next ~$14M in annual revenues (filling out the second shift) will flow to the bottom line much better than the last couple million. They just implemented a second shift which sucks for margins in the short-term but will be great if they get some other projects going...
If you look at the segment financials, its actually the 3 other segments that are a drag on profitability right now. The core Pro-Dex segment has seen pretty incredible operating leverage in the last 3 quarters going from basically 0% ebitda margins to 16-19%. The OMS, Fineline, and Engineering Services divisions have all been drags on profitability.

Pro-Dex: 734k ebitda
OMS: (123k) ebitda
Fineline: (22k) ebitda adjusted for 245k impairment
Engineering Services: (13k) ebitda
Corporate: (136k) ebitda

Total: 440k ebitda
BCI23 is offline   Reply With Quote
Old 05-13-2016, 10:01 AM   #62
scrolls
veteran
 
scrolls's Avatar
 
Join Date: Nov 2011
Posts: 2,090
Re: PDEX - My Largest Position

Quote:
Originally Posted by BCI23 View Post
I don't read it as the relationship is ending. Last year the customer froze orders at the last minute for $1.6m of product that was supposed to ship in Q4 and Q1. They came to a compromise to ship that $1.6m of product over the course of the next year (Jan '16 - Dec '16). These orders only relate to that one specific orthopedic shaver product. Pro-dex sells other products to this customer, although the shaver is by far the largest in terms of volume.
I agree. Thought about it more last night and came to the same conclusion. Everything is cruising along nicely
scrolls is offline   Reply With Quote
Old 05-13-2016, 10:01 AM   #63
BCI23
grinder
 
Join Date: Jun 2008
Location: MN
Posts: 475
Re: PDEX - My Largest Position

i missed it initially but the 536 shares were repurchased at an average price of $3.57
BCI23 is offline   Reply With Quote
Old 06-02-2016, 01:03 AM   #64
Bobble_Wobble
centurion
 
Bobble_Wobble's Avatar
 
Join Date: Jul 2008
Location: Bay Area
Posts: 108
Re: PDEX - My Largest Position

BCI - any guess why the huge spike in volume today? When you first bought this idea to the forum the volume was around 4-5k/day. Now we're up to about 20k/day on average, but today there were 65k shares traded. Given that we're well past the quarterly announcement I thought it was a strange time to see a big increase in volume. Thoughts? TIA!
Bobble_Wobble is offline   Reply With Quote
Old 06-02-2016, 10:36 AM   #65
BCI23
grinder
 
Join Date: Jun 2008
Location: MN
Posts: 475
Re: PDEX - My Largest Position

Quote:
Originally Posted by Bobble_Wobble View Post
BCI - any guess why the huge spike in volume today? When you first bought this idea to the forum the volume was around 4-5k/day. Now we're up to about 20k/day on average, but today there were 65k shares traded. Given that we're well past the quarterly announcement I thought it was a strange time to see a big increase in volume. Thoughts? TIA!
Your guess is as good as mine. I think PDEX is probably showing up on some new screeners where new investors are now looking at the company and buying in. In regard to liquidity, you see this all the time with small companies that grow from $10m to $50m-$100m market cap, liquidity increases as the stock goes higher. Many people don't realize it and are afraid of buying large chunks of small illiquid companies but if those companies become multi baggers liquidity won't be much of an issue in the future.
BCI23 is offline   Reply With Quote
Old 06-08-2016, 01:24 PM   #66
Bobble_Wobble
centurion
 
Bobble_Wobble's Avatar
 
Join Date: Jul 2008
Location: Bay Area
Posts: 108
Re: PDEX - My Largest Position

Quote:
Originally Posted by BCI23 View Post
Your guess is as good as mine. I think PDEX is probably showing up on some new screeners where new investors are now looking at the company and buying in. In regard to liquidity, you see this all the time with small companies that grow from $10m to $50m-$100m market cap, liquidity increases as the stock goes higher. Many people don't realize it and are afraid of buying large chunks of small illiquid companies but if those companies become multi baggers liquidity won't be much of an issue in the future.
You've got to be right about this, BCI. I'm guessing if you're looking for a small (less than $50 million market cap) company with high growth rates (30%+) at a reasonable PE, then this would pop up on a screen. A few months ago there was about, what, $10k/day in total dollars traded in PDEX and now we're up to $90k/day.
Bobble_Wobble is offline   Reply With Quote
Old 06-13-2016, 04:11 AM   #67
coordi
Carpal \'Tunnel
 
coordi's Avatar
 
Join Date: May 2007
Location: a bundle of sticks
Posts: 18,054
Re: PDEX - My Largest Position

Thanks for the recommendation. Went ahead and jumped on it quite some time ago and its worked out very well up to this point.
coordi is offline   Reply With Quote
Old 06-15-2016, 01:20 PM   #68
Malachii
veteran
 
Join Date: Feb 2005
Posts: 3,204
Re: PDEX - My Largest Position

Another day another +7% for PDEX. I actually took a fairly decent sized position in PDEX after their December earnings release and have been very happy so far. Thanks again for posting about this BC.
Malachii is offline   Reply With Quote
Old 06-16-2016, 11:13 AM   #69
BCI23
grinder
 
Join Date: Jun 2008
Location: MN
Posts: 475
Re: PDEX - My Largest Position

For sure, got a few other names i'm doing some work on that i think have some big upside potential but haven't developed the conviction yet to the point of being screaming buys like I thought PDEX was last summer.
BCI23 is offline   Reply With Quote
Old 06-17-2016, 09:41 AM   #70
Heartbrand
enthusiast
 
Join Date: Oct 2006
Posts: 92
Re: PDEX - My Largest Position

is it too late to jump in on this one
Heartbrand is offline   Reply With Quote
Old 06-17-2016, 11:15 AM   #71
DoctorZangief
adept
 
Join Date: Aug 2014
Posts: 1,051
Re: PDEX - My Largest Position

Sounds like there may be some more room for growth *fingers crossed*
DoctorZangief is offline   Reply With Quote
Old 06-22-2016, 10:14 AM   #72
JoshSp
newbie
 
Join Date: Feb 2013
Posts: 27
Re: PDEX - My Largest Position

BCI:

Thanks for posting PDEX. I got in shortly ofter your original post and obviously made some profits thanks to you!

I would be very interested if you could post your "few other names.......with some big upside potential". Regardless of level of conviction (and any caveats you choose to list), they might start good discussions. And of course we all do our own research prior to investing our money.
JoshSp is offline   Reply With Quote
Old 06-29-2016, 06:56 PM   #73
Bobble_Wobble
centurion
 
Bobble_Wobble's Avatar
 
Join Date: Jul 2008
Location: Bay Area
Posts: 108
Re: PDEX - My Largest Position

Looks like a 10 year high has been hit recently.
Bobble_Wobble is offline   Reply With Quote
Old 06-30-2016, 04:44 PM   #74
BCI23
grinder
 
Join Date: Jun 2008
Location: MN
Posts: 475
Re: PDEX - My Largest Position

Yesterday marked the 1 yr anniversary of this thread, its obviously been a good year. I'm not sure what/who has been driving the price up in the last couple weeks but I haven't sold a share. The stock is still not expensive, trading under 1x EV/Rev of my estimate of next years revenue ($24m-ish) for a biz that should be able to do 20% ebitda margins. The quarter they report in September should be a monster and i'm not sure the market realizes it, I won't be selling any before then. The beautiful thing about above avg companies run by great mgmt is you don't have to worry about when to jump off the boat, just hold on for the ride.
BCI23 is offline   Reply With Quote
Old 07-12-2016, 03:25 PM   #75
n00b590
grinder
 
n00b590's Avatar
 
Join Date: Jun 2010
Location: de ilusion tambien se vive
Posts: 672
Re: PDEX - My Largest Position

This has been the best performer in my portfolio by a long shot, thank you sir!

Any other stocks you like right now, especially anything else in the "above avg companies run by great mgmt" for the long haul category?
n00b590 is offline   Reply With Quote

Reply
      

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off


Forum Jump


All times are GMT -4. The time now is 10:26 AM.


Powered by vBulletin®
Copyright ©2000 - 2017, Jelsoft Enterprises Ltd.
Search Engine Optimisation provided by DragonByte SEO v2.0.33 (Pro) - vBulletin Mods & Addons Copyright © 2017 DragonByte Technologies Ltd.
Copyright ę 2008-2010, Two Plus Two Interactive
 
 
Poker Players - Streaming Live Online