Roy

[Roy @RoyMilanS]

@wedge12345678 The natural gas production company is estimated @ $500M with $3 gas. The value of DW land, permits, almost two years of construction = at least $1.5B. It’s nonsense that they won’t be able to leverage all that. If they start announcing SPA’s look out. When FERC extends, look out

[Roy @RoyMilanS]

@TELL_Investors @NourWiseman don’t think it will large increase as management understands that the equity is mis-priced. I believe they have a debt ATM they would tap before equity. Either way, they are done on DW spending until FID so burn will drop. If gas prices go up don’t be surprised if profitable.

[Roy @RoyMilanS]

@NourWiseman No. I’m interested in sum of the parts at this point. Market has priced FID not happening. IF NAT GAS goes to $4 this thing will rip FID or No FID.

[Roy @RoyMilanS]

@jzningy @SmallCapKing2 @r_saler For those still tracking $PETQ I got lucky and my buys below $9 and before this thread popped the next week. Sold everything at $11. Bought back the position today between$8.19-$8.24. Wasn’t thrilled they announced a buyback. Pay down debt and the stock will move more without it!

[Roy @RoyMilanS]

@r_saler @SmallCapKing2 You’re right about most sales not having a great margin. That’s the legacy distribution business. The slide below is the future along with wellness clinics which have higher margins and drive high margin branded products. I hope it goes lower b4 ⬆️. Great talking to you as well.

[Roy @RoyMilanS]

@r_saler @SmallCapKing2 I’ve been patient because I’ve avoided the collapse and started buying under $9. I’ve followed the stock for years and I know when the seller(s) finish dumping it will gap up and timing that is hard. I’d Rather keep averaging down responsibly as I think next year it’s at $20

[Roy @RoyMilanS]

@r_saler @SmallCapKing2 Term loan is variable; however, due to refinancing last year interest payments are lower than before even taking into account the rise in rates this year. According to 10k a 1% rise in rates from here results in $.8M more interest expense/ quarter.

[Roy @RoyMilanS]

@r_saler @SmallCapKing2 Don’t get me wrong, it was not a great quarter or guide, but the stock is down like 50% in a few weeks. Trading for .25 next years sales for a company that will make money is attractive to me. I’m looking forward after a bad quarter and massive drop. Term loan = fixed I/m/o….

[Roy @RoyMilanS]

@r_saler @SmallCapKing2 Listen to the Chewy call, the issue in the pet space is discretionary. Food/healthcare did well and expected to grow. $PETQ does not play in discretionary, it’s healthcare. Pet health historically is resilient during downturns. My base case is not bankruptcy so scaling in here…

[Roy @RoyMilanS]

@r_saler @SmallCapKing2 That’s why on the earnings call they reduced 2022 FCF from $40-$50M to $30-$40M citing rising interest. I think the stock recovers when year over year CPI starts collapsing against better comps. Below is the CEO on how the macro is creating a trade down that will increase margins

[Roy @RoyMilanS]

@r_saler @SmallCapKing2 Respectfully, I don’t think a $920-$940M annual sales company producing $30-$40M annual FCF is risky for a $260M market cap with $450M debt due several years from now. The equity is miss-priced and I believe this will prove to be an incredible opportunity. $petq

[Roy @RoyMilanS]

@r_saler @SmallCapKing2 PETQ bought Perrigo’s Animal Health including manufacturing facility (why debt went up). Since then margins consistently heading higher and brands they manufacture gaining share. The current environment results in consumers trading down to their brands= margin, NI, FCF going ⬆️

[Roy @RoyMilanS]

@r_saler @SmallCapKing2 A/R=$168M and Inventory=$160M. A/P=$81M or half of A/R not worrisome. Also, in Q1 they beat Rev. By +$5M due to $5M brought forward from Q2. If that $5M would have been booked Q2 as expected they would have only missed rev. By $3M. This is a colossal overreaction.

[Roy @RoyMilanS]

@r_saler @SmallCapKing2 $petq 300M fixed due 2028. ABL with 2026 maturity. Going forward less cash going to opening new wellness clinics which will improve FCF and take a look at how inflated AR and inv. are due to dynamics explained on the earnings call. Will convert to cash. Record E and FCF coming 23

[Roy @RoyMilanS]

@r_saler @SmallCapKing2 $petq 1.profitable 2. They are FCF positive(working capital needs to cover A/R and inventory are why you’re confused) 3.margins going up due to more sales from their products which have 50%margin. I used to trade it for swings from low $20s to around $30. Shocked and buying sub9

[Roy @RoyMilanS]

@Dan_Dicker @Dan_Dicker this is all incredibly bullish for oil tankers. What are your thoughts on buying oil tankers as the world rushes to fill them up and use them as storage?