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Chartwell released its year end numbers. They've discontinued their Poker community and delayed "indefinitely" their Bingo community launch. So sounds like the company has bailed on some losing projects. Not a good reflection on management but I guess everyone is a Monday morning quarterback. While the reclassification makes the numbers a little harder to follow, it appears the company burned through $342K last quarter. This is based on the fact at end of Q3 they showed they were down $1,004K for the year, and at the end of Q4 they were down $508K. So that's a gain of $495K in cash; however, the company converted $837K in investments into cash this quarter, so the loss would be the $837K gained on the sale of investments less what remains, the $495K. So that's not so good. I prefer to see my companies cashflow positive.
Quarterly revenue was down both on a year-over-year and sequential basis. The company claimed a small profit of 1 cent per share for the quarter on its continuing operations, and a 2 cent loss per share including discontinued operations.
The balance sheet remains strong with $19 million in cash and little debt, which works out to around $1 per share. On that basis, despite the weak quarter, I think Chartwell, at $1.10, still represents good value and I continue to hold my shares.
Wednesday, February 3, 2010
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2 comments:
great blog! finally a value based blog focusing on Canadian equities..
if you don't mind me asking, what screen are you using to sniff out these undervalued companies?
keep up the good work!
Hi T...thanks for the feedback. I don't mind you asking for details at all. I grab all the symbols for common stocks on the TSX (I get it from a website) then I have an Excel macro that loops through the list and pulls up 5 years' financial data from MSN Money. The macro calculates the 'balance sheet factor' and the 'cashflow factor' I multiply the 2 numbers together and look for the ones with the lowest values. I manually review these to pick those that I think make the most sense as value investments. If you're really interested send me an email to cdnstock@hotmail.com, and I will send you the excel file that I use. It's not real user friendly or particularly elegant, but I can explain to you how to use it.
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