I hate using the phrase “American arrogance”, because my wife is American, and I’m Canadian – and we’re proud to be living on this side of the pond. However, the reaction from two of the investors on the $CHOP conference call in regards to the use of the term “seasonality” was embarrassing – not to mention the guy who said “next time youz guys come over here to raise money you better get your facts straight” (or something like that). There is no better way to describe the way these people reacted than complete and utter arrogance.
Whether or not the company refers to their 4th quarter guidance of “40-50 million, though we’ll likely make it near the high end of that range” as seasonal or lumpy shouldn’t matter.
Smart investors are looking at the year over year growth, and the fact the company is guiding roughly 4x earnings per share in 2009, and even more growth in 2010 I have to laugh at the short term traders reaction! It seemed like most of the people asking question couldn’t get over the 4th quarter guidance.
Get over it fools, you bought the IPO at $5 and now you’re dumping at $4.70 because you don’t understand how to read a speadsheet. Focusing on topline growth for 1 quarter is idiotic. Everything the company has promised is accurate. Show me one company who’s quarterly guidance is higher than 2008 quarter, by quarter, not to mention more profitable in every which way possible? You will have a tough time finding one. Now take all this and add the fact that the company is going upstream and thereby increasing their margins further and you get a pretty good idea of where they’re going.
The company has been very clear that they reached a ceiling of growth due to their production capacity, not their customer demand.
The investors on the phone should probably get out more. They sold their stock as low as $4.70’s, and I picked up a bunch in the $4.80’s. I wish them luck, but I suggest they get their degree from a real school and not a box of cereal. Sometimes when investing arguing about semantics is meaningless.