Short Pick: Beware Of Cashless Earnings.............again

$TITN https://t.co/8rSOhkWg5k

— tom renna (@StockPicker908) August 29, 2019

Summary

Titan Machinery sales and profits are down dramatically from 2013.

Margins are too small for A 3rd Party Retailer to compete with Manufacturers like Caterpillar and Deere.

Lowered International Revenue Assumptions from up 10 to 15% to merely up 2 to 5%.

Beware of Cashless Earnings! Negative Operating cash for 6 months  FY2021 Negative -($14 million).

Titan Machinery entire growth model through the years has simply been a roll up of mom and pops. The Consolidation story here has ended as the company has closed locations over the last 5 years.  Titan is simply a cyclical stock that should only deserve maybe a PE of 6 to 10 and not trade as a teenager any longer above $13 with a PE in a range of nearly 30X.

Another Year with Insiders selling ahead of this morning's miss.

TITN - Titan Machinery Inc. - SEC Form 4 Insider Trading Screener

Well the good news is that CNHI has a dealership like Titan that they can ship machinery to and boost CNHI's sales. Titan doesn't mind as their assets go up on the balance sheet and most of the inventory is carried at ZERO Interest on the FloorPlan Debt. Win Win. (or is it, wink, wink)

The History of this Wall Street game can be found here https://newsgrade.blogspot.com/2018/06/titan-machinery-co-founder-is-companys.html

Short Pick: Beware Of Cashless Earnings.Again $TITN $CAT $DE $CNHI https://t.co/CwdJRy9Jvq

— tom renna (@StockPicker908) August 29, 2019

TITAN Machinery Sales Decline 25%

This morning Titan Machinery reported FY2016 Q2 

Company Slide Show

$TITN $229 Million Decline in Sales (Down 25%) . 6 months Revenue FY2016 $687 million down from 6 months Revenue FY2015 $916 million.

— tom renna (@StockPicker908) September 9, 2015

$TITN FY2016 6 months EPS loss ($0.29) , net income loss ($6,186,000) vs FY2015 6 months EPS loss ($0.31) , net income loss ($7,049,000)

— tom renna (@StockPicker908) September 9, 2015

$TITN From July 31,2013 to July 31,2015 Total Stockholder Equity has declined by $34 million

— tom renna (@StockPicker908) September 9, 2015

$TITN From January 31,2015 to July 31,2015 Balance Sheet : Customer Deposits has declined from $35 million to $15 million. 57% decline

— tom renna (@StockPicker908) September 9, 2015

$TITN From January 31,2015 to July 31,2015 Balance Sheet : Cash has declined from $127 million to $95 million. 25% decline

— tom renna (@StockPicker908) September 9, 2015

$TITN has not earned net income in 6 of last 7 quarters

— tom renna (@StockPicker908) September 9, 2015

a look at $WFC 6th amendment to $TITN Indenture w adjusted net income covenants has titan on the edge going forward pic.twitter.com/G7aUvcSzRt

— tom renna (@StockPicker908) September 9, 2015

Keep Your Eyes on the Numbers : Sales and Earnings

Titan Machinery closed at a new 5 year low yesterday $10.55

2nd Quarter financials are due out on September 9,2015 pre market.

@StockPicker908 here you go, 10.50 lie in the sand, under that 7.50-7.75 pic.twitter.com/LxzXicFNDZ

— Greg Harmon, CMT (@harmongreg) September 3, 2015

$TITN net income for ttm ending 4/30/2015 loss ($31 million) vs $4.8 million for ttm ending 4/30/2014 . $35 million decline. MKT Cap $210 m

— tom renna (@StockPicker908) September 4, 2015

$TITN revenue for ttm ending 4/30/2015 $1.7 billion vs $2.25 billion for ttm ending 4/30/2014 . $500 million decline. -20.9% lower

A look At Q2 Releases from FY2015, FY2014, FY2013

Tuesday, September 9, 2014

TITAN Machinery Reports Disastrous Q2 Financials Pre Market, Shares Lowe

Thursday, September 5, 2013

Titan Machinery EPS Falls 73%

Monday, September 10, 2012

Titan Reports, Misses, Cuts, ....Drops

TITAN MISSED FY2015 EPS GUIDANCE BY $62 Million

 Gave FY2015 EPS GUIDANCE OF $1.00  (In June 2014)

vs.

Actual FY2015  LOSS ($1.51)  (less than 7 Months Later)

In June 2014, Titan Machinery reported FY2015 1st quarter financials and gave forward annual EPS guidance for the year ending January 31,2015 on the high end of $1.00 per share.

• The Company expects adjusted net income attributable to common stockholders to be in the range of $14.8 million to $21.1 million, and adjusted earnings per diluted share to be in the range of $0.70 to $1.00 based on estimated weighted average diluted common shares outstanding of 21.1 million. 

 In April 2015, Titan Machinery reported FY2015 year end EPS LOSS of $31 million ($1.51 per share)  for the period ending January 31,2015.

Pattern of Poor Guidance/Insider Selling into Hyped Guidance

  Titan Machinery has a history of making aggressive guidance and under delivering.  

April 11,2014 Titan Machinery's guidance yesterday was laughable. Yesterday Titan Machinery shares went flying higher after the company announced they missed revenue guidance for the Q4 FY2014 quarter by 10%. It was just 8 weeks ago in December 2013 when the company lowered their 4th quarter guidance with only 8 weeks before the quarter ended and they still missed by a wide margin. 

* Excluding non-cash items, totaling $7.8 million (or $0.37 per share), adjusted net income attributable to common stockholders for fiscal 2014 was $0.41 per diluted share.

April 2013 the company made the following guidance:

• Income forecast of $2 to $2.30 per share. It reiterated its revenue forecast of $2.35 billion to $2.55 billion.

The Next month, May 2013 guidance was changed:

•  The company now anticipates earning $1.70 to $2 per share, down from its prior forecast of $2 to $2.30 per share. It reiterated its revenue forecast of $2.35 billion to $2.55 billion. "  

The Next Month, June 2013, guidance:

•   For the full year ending January 31, 2014, the Company anticipates revenue in the range of $2.35 billion to $2.55 billion, net income attributable to common stockholders in the range of $36.4 million to $42.8 million, and earnings per diluted share in the range of $1.70 to $2.00

September 2013 they made the following Guidance: 

• For the full year ending January 31, 2014, the Company now expects revenue to be in the range of $2.25 billion to $2.45 billion compared to the previous range of $2.35 billion to $2.55 billion. The Company expects net income attributable to common stockholders to be in the range of $25.4 million to $31.8 million, and earnings per diluted share to be in the range of $1.20 to $1.50 based on estimated weighted average diluted common shares outstanding of 21.2 million, primarily reflecting the lower expected equipment margins. This compares to previous net income attributable to common stockholders guidance in the range of $36.4 million to $42.8 million, and earnings per diluted share in the range of $1.70 to $2.00 based on estimated weighted average diluted common shares outstanding of 21.4 million. 

December 2013 the following guidance 

• The Company is adjusting its annual guidance based on increased visibility of market conditions. For the full year ending January 31, 2014, the Company now expects revenue to be in the range of $2.15 billion to $2.35 billion compared to the previous range of $2.25 billion to $2.45 billion. The Company expects net income attributable to common stockholders to be in the range of $11.6 million to $15.8 million, and earnings per diluted share to be in the range of $0.55 to $0.75 based on estimated weighted average diluted common shares outstanding of 21.1 million, primarily reflecting the lower expected equipment sales and margins. This compares to previous net income attributable to common stockholders guidance in the range of $25.4 million to $31.8 million, and earnings per diluted share in the range of $1.20 to $1.50 based on estimated weighted average diluted common shares outstanding of 21.2 million.

The Actual Results for FY2014 that the above guidance refered to :

• Fiscal 2014 Full Year Results

For the full year ended January 31, 2014, revenue increased 1.3% to $2.23 billion from $2.20 billion last year. Gross profit margin for fiscal 2014 was 15.6%, compared to 15.4% last year. Pre-tax income for the fiscal 2014 was $18.4 million. Excluding the aforementioned non-cash impairment charge of $10.0 million, adjusted pre-tax income was $28.4 million, for a pre-tax margin of 1.3%. This compares to pre-tax income of $70.7 million, or a pre-tax margin of 3.2%, last year. GAAP net income attributable to common stockholders for fiscal 2014 was $8.7 million, or $0.41 per diluted share. Adjusted net income attributable to common stockholders for fiscal 2014 was $16.5 million, or $0.78 per diluted share. This compares to $42.0 million, or $2.00 per diluted share, last year.

 In June 2012:

After giving a $2.55-$2.75 range guidance company reported $2.00 EPS for year ending January 31,2013.

Instead of earning $53.8million to $58  million for year the company only reported $42million.

But Management's Mission was accomplished by getting stock up to $30 so they could sell shares @ $30.

• The underwriter Cherry Tree (owned by director Tony Christianson, the brother of CEO, was compensated for the $150 million indenture offering in April of 2012. In June 2012 TITAN gave the following guidance in a press release:   

  "Net income attributable to common stockholders is expected to be in the range of $53.8 million to $58.0 million, resulting in earnings per diluted share range of $2.55 to $2.75". In July 2012 director Tony Christianson and director Irwin James both sold shares of TITAN (TITN) in the market place above $30 per share. 

 7/13/2011

  INSIDER SELLING:
On June 9,2011 Chairman David Meyer appeared on Jim Cramer's MAD MONEY  and touted TITAN MACHINERY's future. 30 days later DAVID MEYER SOLD 300,000 shares @ $27.80 and received proceeds of $8,340.00.00 and CEO Peter Christianson sold 200,000 shares $27.80 for proceeds of $5.56 million. 

A Favorite Blog About Finance, Economics and Public Policy

Stone Street Advisors is one of the top blogs I follow to learn about fundamental analysis. The founder of Stone Street is Jordan Terry, here is his profile summary from his twitter handle @The_Analyst .

 (Founder & MD, Stone Street Advisors LLC. L/S fundamental value & special situations research/idea generation for Hedge Funds Information@stonestreetadvisors.com)

Here is a great post he published yesterday along with a link to a 7 page report titled : 

• P/E Ratios – You’re Doing it Wrong

  " Here, I explain why it is imperitive for traders and investors alike to understand the drivers of relative valuation ratios like P/E – free cash flow to equity, equity cost of capital, and long-term growth rate – so that comparisons between firms, across industries, and over time have context, rendering comparison and analysis far more useful than just looking at current and historical levels or averages." 

  Readers should follow Jordan Terry at twitter.

 

 

 

Tweets by @The_Analyst

PERFECT SHORT CONN MISSES

If you missed $CONN and $TITN short picks, come Now and get Hot #Short Picks Order Equities Research Newsletter today http://t.co/R06EOaplzP
— tom renna (@StockPicker908) March 13, 2014

Conn March 31,2015 8-K


December 18,2014

• Conn's Has Been Deemed A Perfect Short

CONN's wasn't always a short pick (Bullish Archives) 

TITAN MACHINERY Lowers FY2015 EPS Guidance: $0.00-$0.30

Titan Machinery reported a loss for their third consecutive quarter on Tuesday morning that sent shares down to a new 4 year low @ $11.85, a price that it had previously traded at in March 2010.

    

Aside from lowering their net income guidance dramatically, the company also lowered their cash flow and sales outlook as well.

chart source: (bigcharts.com) click chart to enlarge.


The stock has closed under $14 per share for 21 consecutive days and saw a brief spike yesterday after the CEO bought 90,000 shares @ 13.03. The trade in my opinion is insignificant in light of the most recent prior trade the CEO did when he  appeared on Jim Cramer's MAD MONEY  and touted TITAN MACHINERY's future. 30 days later DAVID MEYER SOLD 300,000 shares @ $27.80 and received proceeds of $8,340.00.00 and CEO Peter Christianson sold 200,000 shares $27.80 for proceeds of $5.56 million. (more on Hyping of Shares (Unrealistic Guidance) that Directors used to take advantage of Stock Sales can be found here)

 

Management Discloses ERRORS made in 1st Quarter 10Q

In their FY2015 2nd quarter 10Q filed on Tuesday afternoon with the Securities and Exchange Commission the company stated that they realized that they had inflated their assets and understated their losses in their 1st quarter 10Q filed back in June. Although they previously reported an Earnings Per LOSS of ($0.20) for Q1, it came to their attention that had actually loss ($0.31) for the quarter. The company determined that the error on the loss of over 50% was immaterial and that they won't deem it necessary to Refile their FY2015 Q1 10Q. I am wondering if the SEC will think otherwise?

•  "The incorrect classification of the VAT asset as a non-monetary asset coupled with the significant devaluation of the UAH resulted in an overstatement of the Company’s assets (Prepaid expenses and other) as of April 30, 2014 and an understatement of the Company’s loss (Interest income and other income (expense)) for the three months ended April 30, 2014. This correction increased the Company’s Net Loss Attributable to Titan Machinery Inc. by $2.3 million (from the previously reported $4.2 million to $6.5 million) and increased the diluted loss per share by $0.11 (from the previously reported $0.20 loss per share to a $0.31 loss per share). This correction is reflected in the accompanying unaudited Consolidated Statements of Operations for the six-month period ended July 31, 2014.
  
  
  Based on an evaluation of all relevant factors, the Company concluded that this correction was immaterial to the Company’s results for the three months ended April 30, 2014; therefore, the Company determined that an amendment of its previously filed Form 10-Q for the quarterly period ended April 30, 2014 was not necessary, and the correction will be reflected in future 10-K and 10-Q filings."

 $150 million Corporate Bond (2019) @ New All Time Low $76.00 w 10.4% yield

•  FY2015 2nd quarter 10Q included a footnote regarding the covenants of Titan's $150 million indenture with Wells Fargo, specifically the 4th amendment in less than a year. What is interesting to not is that the underwriting only occurred 2 years ago and the investment banker found it seemed fir to make yet a 4th amendment.

Wall Street Money Mangers and Brokerages Are Looking the Other Way

The biggest mystery to the Titan Machinery trading activity is that 85% of the shares (according to Morningstar) are held by institutions. 

The trailing twelve months ending July 31,2014 Titan has total net income of $690,000 and the stock @$13 a share values the company at $275 million. (or a PE of 398 on ttm basis)

With FY 2015 EPS Guidance now at $0.00 to $0.30 per share , if use the mid range of $0.15 eps, the shares are currently trading at PE of nearly 100!

Why is there such a disconnect with the fundamentals of this underlying business and the price of its stock market valuation? I am seriously thinking that these shares may be being manipulated. One director on the board who is also a founder of the company is the general partner of an underwriting firm for the company and may know more about why shares trade at such a huge premium. 

Management of Titan can blame price of corn, the weak construction & agricultural economy,  poor farming, the unrest with their footprint in the UKRAINE, but I blame The company's poor financial condition on GREED AND RELATED PARTY TRANSACTIONS

TITAN Machinery Reports Disastrous Q2 Financials Pre Market, Shares Lower

T I T N down to $11.95 pre-market

Hats off to @StockPicker908 for sticking w/his warnings on $TITN all the way down http://t.co/NMAM2lzW9c

— Herb Greenberg (@herbgreenberg) September 9, 2014

$TITN FY2015 Q2 loss ($0.03) vs. FY2014 Q2 $0.18

— tom renna (@StockPicker908) September 9, 2014

$TITN OUTLOOK LOWERED , cut in half. expects net income to be in range $6.4 mil- $12.7 million, vs previous range of $14.8 mil to $21.1 mil

— tom renna (@StockPicker908) September 9, 2014

$TITN reports third consecutive quarterly loss

— tom renna (@StockPicker908) September 9, 2014

$TITN Net Income for TRAILING TWELVE MONTHs ending July 31,2014 : $690,000 that's 690 thousand dollars. Mkt Cap $275 million, PE is 398 ttm

— tom renna (@StockPicker908) September 9, 2014

$TITN Lowered Guidance Again TODAY as Expected Equities Research: Warning: Don't Buy Titan Machinery Guidance http://t.co/HXsFqt7SPd

— tom renna (@StockPicker908) September 9, 2014

$TITN FloorPlan Payable increased from $798 million in Q1 to $850 million in Q2

— tom renna (@StockPicker908) September 9, 2014

$TITN CURRent LIABILITES increased from $940 million in Q1 to $972 million in Q2 3.4% increase

— tom renna (@StockPicker908) September 9, 2014

Tweets by @StockPicker908

TITAN MACHINERY Down 40% since April 14th 52 Week High

The above chart demonstrates how Equities Research llc  SEEKS ALPHA!
 (chart source: www.bigcharts.com)



After Titan Machinery reported disappointing  Fiscal Year 2014 annual financials on April 10,2014, shares went on a three day tear and traded up from $16 to $20.40.
In less than 5 months since hitting the 52 week high of $20.40 on April 14,2014, shares are now down 40%, closing yesterday @ $12.44. The S&P500 index is up 9% over the same period. (1830 to 1997).

Management of Titan can blame price of corn, the weak construction & agricultural economy,  poor farming, the unrest with their footprint in the UKRAINE, but I blame The company's poor financial condition on GREED AND RELATED PARTY TRANSACTIONS


Equities Research remains bearish Titan heading into the company's  2nd  quarter earnings release scheduled to be reported pre-market next Tuesday.

• Top Technical Analyst Greg Harmon looks at Titan Machinery

•  On June Q1 conference call Chairman gave guidance: "expect our Ag same-store sales to be negative 10% to 15%".

• Investment Banking firm William Blair has Titan rated a Sell (under perform). William Blair covers 98 stocks and Titan is its only SELL rating.

• Titan Machinery's $150 million Convertible Bond traded at an all time last week @ $77.50 yielding 9.78%.

• Based on Titan Machinery's Historical Guidance, future guidance should not be trusted.  

•  History of Negative Operational Cash Flow 

•  10K FootNote: Wells Fargo Tightens Debt Agreement (again) on Titan Machinery

• A Review of Securities & Exchange Commissions Comments regarding Titan Machinery Disclosure

• YEAR over Year Earnings are down (-79%) . 

• FY 2015 Q1 Results: Loss ($0.20) vs. Loss ($0.02 in FY2013 Q1

• Trailing Twelve Months ending April 30,2014 Net Income : $5.07 million. At current $250 million market capitalization, shares are trading at a Price to Earnings Multiple of 60.

• Other Q1 2015 CC Highlights:
• Agriculture Adjusted Pre-Tax Income Declined 50% in FY2015 Q1 vs FY2014Q
•  
•  "Used Equipment Prices Under Pressure due to Higher Industry Levels of Used Equipment"

•  Q1 equipment margins declines. Gross profit margin was 16.3% in the Q1 fiscal 2015, compared to 16.7% in the first quarterQ1 last yr

• inventory level was $1.12 bil as of April 30, 2014, compared to $1.08 billion as of January 31, 2014.Floorplan interest exp $4.6 mil

•   FY15 Q1 Operational Cash FLow : (Negative $54 mil) vs (Neg $6 mil) in FY14 Q1. operational cash flow per share NEG ($2.44) per share

my former twitter handle was @GFNNSTOCK

This guy makes a serious case that this company is, umm, furry. (@gfnnstock)newsgrade.blogspot.com/2013/04/titan-…
— Roddy Boyd (@BoydRoddy) April 28, 2013

 

I've got to hand it to $GFFNStock (Tom Renna): He's been warning on $TITN for quite awhile http://t.co/Fso3e4laAg Also not a fan of $SSYS
— Herb Greenberg (@herbgreenberg) May 24, 2013

Bob Olstein: Earnings vs.Cash Flow

The first step to becoming an investor is to identify the right Master.  Robert Olstein of the Olstein Funds is one of  the most sophisticated investors on all of Wall Street.  Today I am sharing historical articles written about Olstein that investors should examine and learn from.

OLSTEIN: Earnings vs. Cash Flow

New York Times  7/18/1999

INVESTING, When a Rosy Picture Should Raise a Red Flag by Gretchen Morgenson

"EARNINGS VS. CASH FLOW -- Mr. Olstein first examines what a company generates in cash flow from its operations. A company with excess cash flow can raise dividends and survive tough times without being forced to borrow or sell assets.
To calculate a company's cash flow, start with net income. Add back what it has taken in depreciation expenses and accounts payable. Then subtract capital expenditures, inventories and accounts receivable.
Watch out, Mr. Olstein said, if net income is much higher than cash flow. The company may be speeding or slowing its booking of income or costs, perhaps to meet analysts' earnings forecasts."

 Fortune Magazine  6/26/2000

  Eight Warnings You Want to See by Herb Greenberg

"Positive free cash flow. Olstein looks at a company's financials, specifically the 10-Qs and 10-K, and makes a beeline for the statement of cash flows. We're not talking about the stated cash flow from operations, investing activities or financings. We're talking about cash flow from operations minus capital expenditures--the amount of usable cash the company actually generates, which can be used to buy back stock, pay dividends, make acquisitions, and grow the business."

 TheStreet.com 6/25/01

Fund Junkie by Ian MacDonald

" Our main defense against risk is only buying companies that either are currently generating excess cash flow, or will in the next three years."

Financial Advisor Magazine August 2001

Staying Alert Pays Off by Maria Brill

"To Olstein, being right means finding companies with excess cash flow that are selling at inexpensive levels because investors are tuning them out. "Cash flow is the oil that lubricates the corporate engine," he observes."

 The Washington Post 2/17/2002

To Avoid an Enron, Look at Cash Flow by James K. Glassman

"By concentrating on cash, investors can learn enough about a company to eliminate it as a possible investment. FOr example, if you want to get a quick-and-dirty reading, look not at a firm's "income statement" but at a more obscure tables of numbers called its "statement of cash flows".

New York Times 11/14/2004

Sometimes It Takes a Sherlock by Gretchen Morgenson

""Everyone looks at conventional price-earnings ratios but that doesn't tell you anything about the deviation between cash flow and reported earnings," Mr. Olstein said."

 Financial Advisor Magazine June 2006

Forensic Accounting by Jeff Schlegel

"Olstein believes that cash--particularly free cash flow--is king because he thinks it's a truer measure of a company's underlying performance. He and his staff analysts look for companies trading at a discount to free cash flow. Lack of free cash flow is one reason why he doesn't like (a sector) ..."

 CFA Institute 12/4/2007

Free Cash Flow & Quality of Earnings by Fred H. Speece, Jr. CFA

BloombergBusinessweek 8/17/2009

Behind Bob Olstein's Comeback by Karyn McCormack

"....buy quality companies that have "wide moats" (in other words, "hard to compete with out of the box"), have been generating free cash flow throughout the financial crisis, and have a great balance sheet to withstand any issues."

 New York Times 1/9/2010

Fair Game:Why All Earnings Are Not Equal by  Gretchen Morgenson

As the market goes higher, it becomes more important to measure the quality of corporate earnings, he said. You have to look behind the numbers.

Adjustments that investors need to make now, in Mr. Olstein's view, are a result of disparities between a company's reported earnings and its excess cash flow. Earnings are what investors focus on, but because these figures include noncash items, based on management estimates, the bottom line may not tell the whole story.
Cash flow, on the other hand, is actual money that a company generates and that its managers can use to invest in the business or pay out to shareholders.

SOME of the widest gulfs between earnings and cash flows, Mr. Olstein said, are showing up the ways companies account for capital expenditures."

 New York Times 9/11/2010

A Wealth of Choices for a Value Investor by Jeff Sommer

Cash is king, he says. He spends a lot of time crunching numbers in a search for strong cash flow, and his winnowing process goes something like this:
First, he scrutinizes a company's financial reports in an effort to determine whether they paint an accurate picture. In this work, he has considerable expertise: he was an auditor with the old Arthur Andersen & Company, and then, in the 1970s, was co-author of The Quality of Earnings, a financial newsletter that, in its day, was perhaps the foremost authority on spotting the gray areas of corporate accounting.
If you're analyzing a company, he says, you first have to understand what they're really earning, as opposed to what they say they're earning.

 American Association of Individual Investors  October 2010

What You Can Learn from Shareholder Letters by Eric R. Heyman

"the forensic analysis we undertake
to analyze a company's results and the quality of its
earnings for valuation purposes.
1. Using the company's cash fl ow statements, we begin by
reconciling the difference between free cash fl ow and
reported earnings under accrual accounting. (Accrual
accounting records revenues, expenses and income
when the transaction occurs, as opposed to when
the cash is actually received or spent.) The smaller
the difference between free cash fl ow and reported
earnings, the higher the quality of earnings."

 Barron's 4/30/2011

Depreciation, An Appreciation by Lawrence C. Strauss

"He grows more concerned when a company's reported earnings significantly exceed its cash flow,..."

 Value Investor  4/30/2012

  Strengthin Numbers

"Describe where you look first in researching
a company's financials.
RO: We begin by reconciling the difference
between free cash flow and reported
earnings under accrual accounting. The
smaller the difference, the higher the
quality of earnings. The bigger the difference,
the more work we have to do to
understand the makeup and sustainability
of free cash flow."

OlsteinShareholder Letters

Posts of Titan Machinery's Decline from $30 to $14

Friday, August 24, 2012

Weakening Cash Flow at DICK'S & TITAN 

Monday, September 10, 2012

Titan Reports, Misses, Cuts, ....Drops

Tuesday, April 9, 2013

Titan Machinery Reports in Morning

Thursday, April 25, 2013

Most OverPriced Stock Titan Machinery Files Proxy Statement

Thursday, May 16, 2013

March Newsletter Performance 9 out 10 Picks " In The Money"

Thursday, May 16, 2013

13 out 15 February Newsletter Picks "In the Money"


Tuesday, June 4, 2013
TITAN STOCKHOLDERS Did NOT APPROVE PROPOSAL 3


Monday, August 12, 2013

Titan Machinery Warning


Wednesday, September 4, 2013
Don't Trust Titan Machinery's Guidance


Thursday, September 5, 2013

Titan Machinery EPS Falls 73%

Wednesday, December 4, 2013

Greg Harmon Technical Chart of Titan Machinery

Friday, December 6, 2013

Equities Research Gets Recognized For Titan Machinery Warning
Wednesday, December 11, 2013

Reseller Can't Compete with Manufacturers


Tuesday, March 11, 2014

Top Short Pick: TITAN MACHINERY


Friday, April 4, 2014

Titan Machinery Convertible Bond Nears All Time Low


Monday, April 7, 2014

A Review of Securities & Exchange Commissions Comments regarding Titan Machinery Disclosure


Friday, April 11, 2014

Warning: Don't Buy Titan Machinery Guidance


Sunday, April 13, 2014

10K FootNote: Wells Fargo Tightens Debt Agreement (again) on Titan Machinery


Thursday, June 5, 2014

Titan Machinery Reports Q1 Loss of ($0.20)


Thursday, June 12, 2014

Don't Assume Titan Machinery Will Be Profitable because Management Says So


Thursday, June 19, 2014

New Credit Agreement Requirements Makes Titan Highly Speculative



archived statistics with Stockdiagnostics Charts of Titan Machinery

http://www.equitiesresearch.com/news.asp?Title=titn

Don't Assume Titan Machinery Will Be Profitable because Management Says So

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  

Archives:

Most OverPriced Stock Titan Machinery Files Proxy Statement

A Review of Securities & Exchange Commissions Comments regarding Titan Machinery Disclosure

Markowski says Titan Machinery Will Be Bankrupt

10K FootNote: Wells Fargo Tightens Debt Agreement (again) on Titan Machinery

A Review of Securities & Exchange Commission's Comments regarding Titan Machinery Disclosure

• On April 10,2013, Titan Machinery Inc (NASDAQ: TITN) filed its Fiscal 2013 year end financials (10K) for the 12 month period ending January 31,2013 with the SEC. 
• On April 25,2013, Titan Machinery Inc filed its Proxy Statement for its Annual Shareholder meeting (DEF 14A) with the SEC.

This Thursday, April 10th, before the market opens, Titan will disclose Fiscal Year 2014 financials for the 12 month period ending January 31,2014.

Securities & Exchange Commission Division of Corporate Finance Comments December 9,2013

•  Titan Machinery Inc.
  Form 10-K for the Fiscal Year Ended January
  31, 2013 Filed April 10, 2013
  Definitive Proxy Statement on Schedule 14A
  Filed April 24, 2013
  File No. 001-33866
  
  
  Titan Machinery Responds to SEC Comments December 20,2013

  ◦ Filed with SEC 

  •  

  •  Securities & Exchange Commission Review of Comments on December 30,2013 

  
  

  Auditors

  •  Securities & Exchange Commission Comment Letter to Titan Machinery Regarding Dismissal of Auditor on July 8,2013

  • SEC response to amended 8-K regarding Auditor change 

  
  

  
  

  Prior to the 4th of July holiday (market closing), on July 2,2013 @ 16:56:12 est., Titan Machinery filed an 8-K with Securities & Exchange Commission announcing the dismissal of their auditor Eide Bailly LLP and replacing them with Deloitte & Touche LLP.

  The 8-K stated the dismissal took place on June 27,2013 but the disclosure wasn't made till July 2,2013. 

  The unusual volume on the morning of June 28,2013 looks like somebody saw this 8-K coming in my opinion.  

  
  

  
  

  
  

  This Thursday's 10-K will be 1st audit done by new auditor Deloitte & Touche LLP.

  
  

 Equities Research:
 It will be interesting to see if the new auditor allows the company to recognize revenue in Fiscal 2014 in this same manner as Fiscal 2013: (from Fiscal 2013 10K):
 " However, in certain circumstances, and upon the customer's written request, equipment revenue is recognized before delivery occurs"


I was very critical of the financials disclosed by in both filings and analyzed both documents in my blog post : "The Most Overpriced Stock in the Market Files Proxy Statement".
                                         My reports raised many red flags :

•  Following key words are what caught my eye, especially since these hats are worn by 4 or 5 execs:
  3 Brothers, A Son, A Brother-In-Law, COO, Chairman, Founder, Commission, Managing Director of Underwriter, Owner of Construction Company, Unsecured loans, LEASE Arrangements with Top 3 Execs outside Entities, Real Estate Sale between TITN and Top two Execs Outside Entity, Private Jet, Consulting fees, underwriting fees....(oh yeah, the time Chairman went on Mad Money and then sold shares ) 
•  
•  A. 10 K Highlights of Weak Fundamentals
  B. Roddy Boyd / Herb Greenberg Recognizes my Work
  C.Certain Related Party Transactions
  D.Insider Selling after Making Hyped Up Projections (missed by a mile)
  E.Increase Of Authorized Shares
  F.CNH AMERICA Floor Debt Plan
  G.Property sold to Entity owned by Top 2 Execs.without disclosure
  H.Property Ownership Company owned by Top 2 Execs outside entity.
  I.Brother-in-law Construction Company building multi-million dollars worth of buildings.
  J.OLD INVENTORY list (108 page document), not sure how if its obsolete yet.
  K.History of Negative Operational Cash Flow
  L.Private Jet
  M.$150 million convertible note disclosure. (using best scenario vs. worse scenario in disclosure)
  N.Immediate Family Members: commissions, raises, fees, consulting agreements
  O.Cash Advance Business offering loans to Bad Credit/No Credit borrowers
  P.Variable Interest on Debt
  Q.Interest Expense
  R.disclosure of former CFO, now Treasurer)
  S.Auditor's History
  T. CEO & chairman both increased salaries 48% in cash 

On Titan's last conference call in December 2013 the company lowered their year end guidance: 
For fiscal 2014 revenue range of $2.15billion to $2.35 billion and expect annual net income in the range of $11.6million to$15.8million.  Fiscal Year 2013 net income was $42 million. That is a 65% decline year over year decline. Note with shares trading at $15, the PE ratio is nearly 30.


Complaint