Value Filter created 07/05/09

The value filter was developed as follow:

EV/Sales < 1.50

Average shares outstanding over past 3 years/TTM Shares outstanding >.94
Shares short as a % of Float < 10%

EV/Market Cap < 1.85

Share buybacks for the last reported quarter

Positive direct net insider buying for 2009

The list was sorted by direct net insider transactions (Buys less Sales)/Float Value (shares outstanding in float * Price)

Now the results



Carrigaline said...

Hey John,

I noticed that a stock you covered (GSIG) have just announced major restructuring as a result of accounts that were incorrectly filed as of 2004.


I thought this company was debt-free and was sitting on a cash pile? Judging from previous annual reports, it looks like the company might have been hit by speculating on currencies and treasuries; but annual reports explicitly state that the comes has no debt. If that's the case, what the heck is going on and why are our shares being diluted?

ShadowStock said...

Geez, I see the stock is down to .55 today. Sorry but I don’t have a useful answer.

I wish I could tell you the stock was still a sound Net Net. But it seems like another example of corrupt management. But then again I don’t know the full story.

If you are invested I sincerely hope you’re not impacted in a material way.


Carrigaline said...

Unfortunately, it looks like incompetent (rather than corrupt) management have struck again. For one, they now have to restate earnings from 2004 onwards because of irregularities filed in their accounts. What really stinks is that because no accounts were filed recently, I wasn't aware that the company had spent a pile of its cash (and borrowed $200 mn) to buy a rival at what was pretty much the top of the market. That wouldn't have been so bad, but because of the accounting irregularities, the lending covenant behind the $200 mn loan was broken. As part of the agreement with the loan holder, they have written off $120 mn of the debt in exchange for 80% of the company.

It's one stock of many that I own, and at least I was lucky enough to get in at a little less than a dollar.

What annoys me most if that there was positive insider buying here. I suppose at least they won't be going into bankrupcy now.