4/2/25 - $fc - Solid co, but dip buy ONLY4/2/25 :: VROCKSTAR :: NYSE:FC
Solid co, but dip buy ONLY
- been on my radar for about a year, but "rolling" over starting last quarter and estimates really got floored
- so the "setup" from a financial POV such that we can *see* bottom and *have confidence* in mgmt "optimistic" speech is a stock you could buy
- but honestly, at higher EBITDA multiple than NXT (which as you all know is my benchmark) on a small cap stock in this environment and where this type of service (training ppl inside biz's) is likely being tightened at the margin, especially "now", early in 1H25... i can't imagine if you don't own this you would want to be piling in.
- if stock does pop, i'd guess larger holders use the liquidity to sell down/ adjust. if stock sinks... the incremental bid esp to the start to a new quarter could be limited.
- but even on trough say $20 mm FCF on a cap of $320 mm, you're at >6% fcf "not bad at all". the only issue is whether you can believe it's $20 and on it's way back to $25 or $30 in '26. i just don't think we have that visibility.
- so the play for me is if they report "abysmal results" and perhaps even we get a double whammy of mkt beta/tide go out in the coming weeks. this could be an interesting play at a double digit+ FCF yield, which is still a healthy 30% lower. so i'll set my greedy target slightly above $20 to look again <> mainly bc that sort of move on a well capitalized co like this is simply too extreme - so it would be a multi-day/week greedy target.
that's a lot of writing for a small name, but wanted to do the thinking for myself in the future b/c when we're in the moment it's easier to "just act" then go through this exercise and block out the emotions :)
have a good liberation day, or whatever that is, everyone.
V
