On Yahoo Finance someone asked "What PE Should Titan Machinery Trade At?"
My Answer:
Your question assumes Titan Machinery will even have any earnings in FY 2015.
I question if Titan will even be profitable this year.
In the company's most recent reported Q1 they loss ($0.20) per share. The quarter prior to that ,Q4, they loss money as well.
We can't expect the management's guidance to mean anything.
Management made the following Guidance for FY2014:
- On April 10,2013 gave guidance for FY2014 of $2.00-$2.30.
1 month later on:
- On May 23,2013 guidance for FY2014 was lowered to $1.70-$2.00
3months later on:
- On September 5,2013 guidance was lowered again to $1.20-$1.50
When the year ended on January 31,2014 the FY2014 EPS came in @ $0.78 per share.
Everyone needs to realize that this company has generated a total of negative $434 million of operational cash flow over last 13 quarters
combined.
The Management is deceiving the Public by advertising NON GAAP cash
flow. The only reason that that insignificant number was positive in
this Q1 is because they add the monies they borrowed in the first
quarter to cash flow. (that is why they allowed the floor plan debt to
go up, so that they can make their NON GAAP cash flow number to be
positive, how ridiculous)
By increasing their net floor plan debt they were able to report a positive NON GAAP C/F number in Q1. Ridiculous? definitely.
Management has an equity interest in Dealer Sites LLC. Titan recently
increased their lease agreements with Dealer Sites from $50million to
$100 million last year.
Management is making money on properties, (thanks to Titan footing the bills).
Titan pays for insurance and all expenses of the property although it is owned by outside entity owned by management.
In FY 2012 and FY2013 the 10K disclosed the related party dealings in
detail. In April's FY2014 10k ,
Deloitte allowed Titan to omit this
disclosure.
It appears to me that CNH was stuffing Titan with inventory these past
few years to boost CNH's own revenue/profit numbers (timely with Fiat
deal). The relationship with CNH is very Cozy. A large percentage of the
inventory that Titan has parked, they are not paying interest on.
Wells Fargo recently amended the convertible note terms for the 3rd time. (tightening the covenants more and more).
Titan's debt/equity for Q1 increased from .70 to .716
The other big issue here, is what are these Mutual Fund Analysts (Money
Managers) getting paid for? Have you seen what ZACKS has been
reporting? another joke.
If you look on Morningstar at the list of institutional holders of both
the Equity and the Debt, I wonder how do these decision makers have
jobs? It is even more scary that mom and pop are trusting their nest egg
monies with these amateurs (and they actually pay these funds to manage
their money).
oh boy, Wall Street, what a silly place
List of Institutional Holders
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