The title of the
post (see above) is the title of Citron Research’s “second report” on
Textura. Like the first report Citron
issued, Citron’s second report is a “must read”.
post (see above) is the title of Citron Research’s “second report” on
Textura. Like the first report Citron
issued, Citron’s second report is a “must read”.
To refresh your
memory, I put up a post on the blog after I read Citron Research’s “first
report” on Textura; here’s the link to that post:
memory, I put up a post on the blog after I read Citron Research’s “first
report” on Textura; here’s the link to that post:
Going further,
here’s the lead commentary in Citron’s second report:
here’s the lead commentary in Citron’s second report:
– “There is NOTHING an analyst can say here
except “Mea Culpa.””
except “Mea Culpa.””
– “Textura CEO Patrick Allin’s bio is Highly
Material to All Potential and Actual Textura Investors”
Material to All Potential and Actual Textura Investors”
– “IPO Investment Bank Analysts are
Pro-Actively Complicit”
Pro-Actively Complicit”
– “Company Expenses are Beyond Analysts Worst
Nightmare”
Nightmare”
– “Profitability is Mission Impossible”
– “Citron Reaffirms Generous $4 Target”
Here’s a link to
the full second report that Citron published:
the full second report that Citron published:
Blog Publisher’s comments:
I’m sure you’ve heard the expression, ‘If something sounds too good to
be true, it probably is.’ Well, in the investment
world, I say, ‘If something sounds too good to be true, it definitely is.’
be true, it probably is.’ Well, in the investment
world, I say, ‘If something sounds too good to be true, it definitely is.’
[from the 1997 Washington Times 3 June B7]
So far, at
least three different analysts have reacted to Citron’s first report by saying
that Citron’s allegations are baseless.
They’ve reiterated their “outperform/buy” ratings on TXTR and have set
forth (what I think are) lofty price targets for TXTR stock. The latest analyst to say that is Barrington
Research – see note at the end of today’s blog post for what, exactly,
Barrington said.)
least three different analysts have reacted to Citron’s first report by saying
that Citron’s allegations are baseless.
They’ve reiterated their “outperform/buy” ratings on TXTR and have set
forth (what I think are) lofty price targets for TXTR stock. The latest analyst to say that is Barrington
Research – see note at the end of today’s blog post for what, exactly,
Barrington said.)
Note that
TXTR currently has approximately 24.87 million shares outstanding, and that, if
TXTR stock gets to $55.00 per share, TXTR’s market cap will be in the
neighborhood of $1.368 Bil. That’s
correct, you read that correctly, $1.368 BILLION. After reading the note attributed to
Barrington, I found myself wondering, “is Barrington based on Colorado, and, if
so, they must have found some really good stuff!”
TXTR currently has approximately 24.87 million shares outstanding, and that, if
TXTR stock gets to $55.00 per share, TXTR’s market cap will be in the
neighborhood of $1.368 Bil. That’s
correct, you read that correctly, $1.368 BILLION. After reading the note attributed to
Barrington, I found myself wondering, “is Barrington based on Colorado, and, if
so, they must have found some really good stuff!”
At some
point this year, it’s likely that the stock market will go into a correction
period, i.e., fall down a bit (or maybe even more than just a bit.) If that does happen, I do believe that it will
affect, quite adversely, stocks of
tech companies that are currently, stock-price wise, flying above the sky, especially those
companies that have yet to show
profits or even that they can earn
profits. Currently, TXTR is not
profitable (in it’s last full fiscal year, it’s losses were greater than its
sale revenues), and TXTR has never earned a profit. So, when the overall market corrects this
year, is it not likely, at least fairly likely, that TXTR’s stock will get
crushed? Well, time will tell.
point this year, it’s likely that the stock market will go into a correction
period, i.e., fall down a bit (or maybe even more than just a bit.) If that does happen, I do believe that it will
affect, quite adversely, stocks of
tech companies that are currently, stock-price wise, flying above the sky, especially those
companies that have yet to show
profits or even that they can earn
profits. Currently, TXTR is not
profitable (in it’s last full fiscal year, it’s losses were greater than its
sale revenues), and TXTR has never earned a profit. So, when the overall market corrects this
year, is it not likely, at least fairly likely, that TXTR’s stock will get
crushed? Well, time will tell.
Early last
year, TXTR purchased PlanSwift.
PlanSwift’s sales helped TXTR show
growth. More recently, TXTR acquired
Latista. I did not see anything
published that indicated how much revenue TXTR picked up by buying Latista: all
I saw published was a note that said that TXTR paid $35 mil for Latista. Is TXTR on a path to buy revenue growth by buying, and folding in, other tech companies? Without acquired
revenues, is TXTR’s organic growth
healthy, vibrant and on a rampant surge to the upside? Based on what I’ve read, so far, in TXTR’s
financial-results-reports, I haven’t found any evidence to support that TXTR’s
organic revenues are on a rampant surge to the upside. I have seen TXTR press releases that talk
about TXTR’s upside, but, to me, those press releases appear to contain a lot
of fluff.
year, TXTR purchased PlanSwift.
PlanSwift’s sales helped TXTR show
growth. More recently, TXTR acquired
Latista. I did not see anything
published that indicated how much revenue TXTR picked up by buying Latista: all
I saw published was a note that said that TXTR paid $35 mil for Latista. Is TXTR on a path to buy revenue growth by buying, and folding in, other tech companies? Without acquired
revenues, is TXTR’s organic growth
healthy, vibrant and on a rampant surge to the upside? Based on what I’ve read, so far, in TXTR’s
financial-results-reports, I haven’t found any evidence to support that TXTR’s
organic revenues are on a rampant surge to the upside. I have seen TXTR press releases that talk
about TXTR’s upside, but, to me, those press releases appear to contain a lot
of fluff.
And, having
said that, I’m now going to repeat the first paragraph:
said that, I’m now going to repeat the first paragraph:
I’m sure you’ve heard the expression, ‘If something sounds too good to
be true, it probably is.’ Well, in the investment
world, I say, ‘If something sounds too good to be true, it definitely is.’
be true, it probably is.’ Well, in the investment
world, I say, ‘If something sounds too good to be true, it definitely is.’
[from
the 1997 Washington Times 3 June B7]
the 1997 Washington Times 3 June B7]
Until I come across information that would cause me to think otherwise,
you can, for now, count me firmly in Citron Research’s camp. If TXTR isn’t able to buy its way out of red
ink, I don’t see where TXTR is going to be profitable in 2014 or 2015 or
2016. Prove me wrong!
you can, for now, count me firmly in Citron Research’s camp. If TXTR isn’t able to buy its way out of red
ink, I don’t see where TXTR is going to be profitable in 2014 or 2015 or
2016. Prove me wrong!
For the record, it’s 3:09 pm and TXTR stock is now trading at $28.33,
off 11.47% for the day. TXTR traded, in
2013, as high as $47.25.
off 11.47% for the day. TXTR traded, in
2013, as high as $47.25.
Okay, here’s the note that I mentioned
earlier in this post:
earlier in this post:
Textura
Corp (TXTR) Added to Barrington Research’s Best Ideas List
Corp (TXTR) Added to Barrington Research’s Best Ideas List
January 6, 2014
3:30 PM EST, from StreetInsider.com
3:30 PM EST, from StreetInsider.com
Barrington Research maintained an
Outperform rating on Textura Corp (NYSE: TXTR) with a price target of $55.00. The
stock was also added to the firm’s Best Ideas List.
Outperform rating on Textura Corp (NYSE: TXTR) with a price target of $55.00. The
stock was also added to the firm’s Best Ideas List.
A rogue short
report published (by Citron Research) the day after Christmas caused a 25% sell off in Textura’s
stock.
report published (by Citron Research) the day after Christmas caused a 25% sell off in Textura’s
stock.
“While the
report created an attractive buying opportunity, we view all of the issues
mentioned as baseless,” said analyst
Jeff Houston.”
report created an attractive buying opportunity, we view all of the issues
mentioned as baseless,” said analyst
Jeff Houston.”
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“The
company’s disruptive technology is revolutionizing and modernizing the
commercial construction industry, which is large and underpenetrated. Besides
first mover advantage, patent protection, pricing power, and opportunities to
cross‐sell and expand globally, we like
that sub‐contractors generate most (75%) of
CPM revenue and are required by Textura’s GC clients to use the solution. Also,
the recovering construction industry presents a tailwind. Despite execution
risk, our forecast for a significant profitability ramp and continued 50%
organic growth in 2015 justifies a significant valuation premium,” he
added.
company’s disruptive technology is revolutionizing and modernizing the
commercial construction industry, which is large and underpenetrated. Besides
first mover advantage, patent protection, pricing power, and opportunities to
cross‐sell and expand globally, we like
that sub‐contractors generate most (75%) of
CPM revenue and are required by Textura’s GC clients to use the solution. Also,
the recovering construction industry presents a tailwind. Despite execution
risk, our forecast for a significant profitability ramp and continued 50%
organic growth in 2015 justifies a significant valuation premium,” he
added.
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