It was a bad week for the markets since my last update, especially with England voting to leave the EU, exacerbating the selloff. The DJIA imploded about 2.7% from 17,865 to 17,400. The "DCVP" did better, erasing just 1.4%, from $29.29 to $28.88! The good news is (for those who own them-that is) oil and gold continue to exhibit impressive strength, while the FED has cooled down their immediate intent, to raise interest rates. Monday's Market should open weak, only to experience a reversal, and actually close in the black.
the esteemed portfolio:
Luby's (NYSE:LUB): Earnings will be released after the market close on July 7th. The company should put up a better bottom line. My expectations, propose a 50% jump in earnings from 8 cents to 12 cents, on a 1% drop in sales. The top line will fall from $94 million to $93 million. The sales softness will be blamed on inclement weather, while the earnings gain will be attributable to lower food and corporate overhead expenses. The earnings gain should have enough impetus, to markup the shares, an immediate 10%.
Westport Fuel Systems (NASDAQ:WPRT): The stock is getting so close to falling below $1.00 and becoming un-listable on the NASDAQ, that the Board must hurry, to "right the wrong". WPRT won the booby prize for the largest percentage drop in the past two weeks, when it experienced a 20% bloodletting. I am actually surprised it was so weak, considering they received two very good pieces of news. One being a initiation of research coverage with a buy rating, and the other, a nice contract award from Volvo.
On Tuesday, June 28th, the company will have their Annual Shareholders Meeting. You can bet Cartesian Capital will make a big presence there, as they just invested $71.3 million with WPRT and own convertible debentures, giving them the right to purchase $17.5 million worth of stock at $2.31 per share. They also had their Mananging Partner, Peter Yu, elected to the WPRT board of Directors.
They need to enact a reverse stock split to avoid a delisting. A ounce of prevention is worth more than a pound of cure, besides, the Street has a natural disdain for penny stocks and they get absolutely no respect. Other benefits extracted from a reverse split include more buying from mutual funds (most funds are prohibited from buying sub $5 stocks in their by-laws) and increased demand for the shares, as a consequence of gaining marginable status. I have called the Investor Relations Department at Westport urging my support for a reverse split. You should too. We need to take an active roll in our company, since the Board seems a bit too cavalier at this juncture. The IR dept can be called at 604-718-2011. The contacts are: Gram Madison and Ryder McRitchie. Don't be afraid to call them and speak your mind. That is what they are there for-to serve the owner.
Supervalu (NYSE:SVU): this one also took it, "in the chin", the past few weeks, with nearly a 10% beating. The shares are getting dangerously close to testing their 52 week low of $3.94. Not sure if that would qualify as a capitulation event, but definitely wouldn't mind, if all the weak hands had their shares, flushed out. At least then, we could qualify for a nice rally.
Bridgford Foods (NASDAQ:BRID): Their share volume has completely dried up, and as a circumstance, it is extremely difficult to buy or sell. The spread is so large, that if a buyer hits the ask, he is automatically endeared to a 5-10% loss. If a seller want to get out, he must hit the bid. I am always trying to buy at the bid, and sell at the offer (ask)-it is a nice way to make a buck, but very difficult to pull off.
Coffee Holdings Co. Inc (NASDAQ:JVA): The coffee purveyor announced the acquisition of Sonofresco last week, and the deal should close by the end of June. Sonofresco is in the business of selling wholesale green coffee beans and is a manufacturer of table top roasters. JVA's green coffee bean customer base will more than double, as a result of the acquisition. Sonofresco's sales comprise 50% green coffee and 50% table roasters. The price of the acquisition, and Sonofresco's annual sales should be revealed, when the deal closes. One last thought. Farmer Brothers (NASDAQ:FARM) is finishing their move to their new "state of the art" plant in Texas. It will have plenty of overcapacity in the near term, so I wouldn't be surprised at all, if they made a play for JVA- the synergies would be fantastic, and JVA's robust operations could make a nice dent into FARM's initial overcapacity.
Disclosure: I am/we are long LUB,SVU,WPRT,JVA AND BRID.