Corban Bates

GSI Group: Lasering In on a Dirt Cheap Net/Net Stock

Yes I completely agree. This one turned out to be too good to be true. All the numbers said it was cheap but the numbers turned out to be inaccurate. There is a lawsuit against them and I am a part of it. I encourage anyone involved in this stock to contact one of the many firms involved to get your money back. The Third Avenue guys were dead on with this stock. This is why they are professionals and believe me I will not be betting against them in the future. I'll definitely take the hit for this one. However, I still believe net/nets are great investments (as long as the numbers are actually real) as a few others I own have more than doubled in a short period of time (i.e. the other article I wrote on Horsehead Holdings.)


On Dec 21 04:31 PM stevieaustin wrote:

> Geez Corban, no offence but you might have put a bit more weight
> on that Excel purchase they transacted. It was abysmal. I have been
> looking for that Oct 30th earnings report you mentioned but can't
> see it wither on GSIG's webpage, Reuters, or the Sec filings. <br/>
>
> What is visible is the resignation of Robert Bowen as CFO, such a
> shocking decision that you have to fall on your sword for that one.
> And to think that GSIG are being sued more mis-reporting $10m of
> earnings. They should be sued for incompetence in the financing of
> the Excel deal.
>
> I

Forget Rabbits' Feet, Buy Horsehead

Good question. I actually have the same one. They have their conference call on the 7th and hopefully someone will address this in the Q&A

GSI Group: Lasering In on a Dirt Cheap Net/Net Stock

You are absolutely right. I checked out Third Avenue's latest shareholder letter and they closed out their position, apparently MSN Money's info is outdated. Well these guys are obviously much smarter than I am, however they got in at much higher prices and have probably taken significant losses. I can imagine they are pretty frustrated with its performance and the acquisition may have been the last straw. I'm eager to see their latest quarter to see how all of this Excel acquisition stuff played out. However, as long as things haven't significantly changed I still view GSIG as a very cheap stock. I'll take an industry leader that sells for 25% of its tangible book value and is profitable any day. Anyone interested in this stock would be well served to wait until they release earnings to see some updated numbers however. I'm with you though in hoping that the insiders, along with the company upping its buyback plan, are right. I appreciate your comments.

GSI Group: Lasering In on a Dirt Cheap Net/Net Stock

Good point, I should have mentioned something about this in my article.... They report earnings on Thursday, October 30, 2008, and it will be interesting to see how their balance sheet shakes out. However, they did have 183 Million in cash, which grew 12 Million in Q2, and they recently sold their General Optics business for 21 Million; so that would bring their cash total to 204 Million (assuming they did not lose or gain any cash this past quarter). 348 Million for the acquisition minus 204 Million in cash means they had to come up with another 144 million somehow. Assuming all 144 million goes to their long term debt, it brings their total liabilities to 213.9. Also assuming their current assets and their shares outstanding stay about the same as they were last quarter, you have a NCAV of 2.9. This is definitely lower than before but it would still qualify as a net/net as it would be 65.53% of its NCAV. There's a lot of assumptions in there so I will definitely be interested in seeing how it all actually played out. Thanks for reading!