You are right, Bestworld. Have you gotten on board the train that looks like it is picking up speed?
It has reported another quarter of profit. Best of all, its cash level actually increased!
Can give the management a salute!
If the 4th quarter is another profitable one, the stock can easily rise above 10-cent level, which is a 50-60% gain from current 6.5 cent level.
Hi, Quarter to quarter profits actually shrinks. Inventory lower too, and cash cycle is long. Predicted correctly that the profits will not be amazing in q3 in my other post"turnARound stories". Management outlook comments doesn't go beyond the immediate future. Just my honest observation, hope I don't offend anyone.
If you ask me, I think there are many stocks worth looking, I am not sure if the stock will actually flies if it turns a profit again in Q4. If profits is all it needs then maybe it will have a good chance. However, usually for prices to run, they need strong profits and also a trend/outlook/ of continous strong growth.
Because Cacola has a cash cycle that is longer than 1 quarter, it is quite possible to predict its 4q profitability, it shouldn't be too strong since the inventory is actually lower than q2. SImple, for profits to come in, inventories need to go, the inventory takes more than 1 quarter to go, hence the lower the inventory the lower the profits.
The only profits surprise will only take place if the company can shorten their cash cycles to at least less than 90 days.
greenrookie, thank you for your view. Interesting, can u explain a bit more?
a. Cacola doesnt do distribution does it? It sells to distributors, so it books revenue on delivery to distributors.
b. Inventory refers to finished goods?
Assuming 4Qis profitable also, the stock upside is there cos the net cash in the company is about 10 cents a share and growing - and of course you get the business for free and it is a profitable one.
NextInsight
a hub for serious investors
