| ||13-May-2011 07:34 PM|
Will do some modeling on NATR and CMT and see what the trends look like based on trailing quarters and growth strategies.
| ||12-Aug-2010 08:56 AM|
|2044 || AKRK||20-Jan-2010 08:54 AM|
When I think of penny stocks I tend to assume the company’s are risky start-up or early stage ventures not businesses with a solid history of growth and earnings. AKRK is an established business that has grown organically and is seeking the capital through a secondary offering that will allow management to complete the acquisition of additional cork forest acreage and factory and other fixed assets needed to increase production capacity. The acquisitions are all under contract management just needs to capital to close the deals. The transactions will facilitate accelerated growth.
The following table reflects actual operating data for the two years ended Dec. 31, 2007 and 2008 and my estimate for 2009. Note that operating results in QIV 2008 and QI 2009 were below trend due to the sharp contraction in worldwide economic activity that took place during that period. The Company’s operating results showed sharp improvement in QII and QIII 2009. My QIV 2009 estimate is only 20% more than Asia Cork generated in Q IV 2007 so I think it is reasonable.
| ||(Amounts in 000s)|| |
| ||2009 (E)||2008||2007|
|Net sales|| $ 25,025 || $ 21,378 || $ 16,051 |
|Inc (loss) from operations|| $ 4,522 || $ 4,035 || $ 2,594 |
|Inc (loss) before income taxes|| $ 4,442 || $ 3,796 || $ 2,269 |
|Net inc (loss)|| $ 3,373 || $ 2,921 || $ 1,762 |
|Net inc (loss) per cs|| $ 0.088 || $ 0.080 || $ 0.050 |
If my 2009 estimate is in line with actual results AKRK is selling at less than 7x eps. Given the Company’s solid business model and management’s plans to grow the business it is hard to imagine this stock staying under $1 for much longer. I believe patience will pay off with Asia Cork and longer term investors will do very well.
|2010 || AKRK||12-Jan-2010 09:57 PM|
If AKRK does a secondary offering the benefits will far outweigh the negative impact of dilution. A successful offering will provide the capital necessary to complete several pending transactions to acquire additional cork forest acreage and production assets. The acquisitions would vertically integrate operations resulting in greater operational efficiencies, increased profit margins and the capacity to aggressively increase international distribution. In addition, the offering would trigger the conversion of the Ancora Greater China Fund promissory note to equity resolving the $700,000 debt issue and making Ancora a major shareholder. Having a prestigious investor like Ancora with a large equity stake in the Company has to help. Finally, a secondary offering would broaden the shareholder base which would be supported by Global Arena Capital Corp. the investment banking firm retained by Asia Cork to do the offering. Essentially the offering would provide the funds needed to jumpstart the business and kick AKRK to the next level.
The biggest unknown for now is how long it will take the Company to complete the offering especially since a Form S-3 filing with the SEC is probably required. The SEC might require the Form 10K be filed before the S-3 which could push the offering off until April. Who knows though, the offering might happen next week. However long the process takes though, the wait will be well worth it.