Q: Is the drop warranted? Is it worth keeping? What are the chances of recovery?
5i Research Answer:
With a micro cap stock movements can be amplified. In its quarterly report, it did show a sharp drop in revenue. It remained profitable, however, and debt free, with $8M cash. Margins did drop, but it has new services and the general commentary was not overly negative. Cash flow remains positive. Insiders own about 14% and have been net buyers in the last six months. It is in good financial shape. The drop seems overly harsh to us, but we do not want to downplay overall risks here. We would like to see sales improve, certainly, but it has the ability to survive, recover and perhaps prosper down the road.