The easy way to spot a stock in distress17 Nov 2023 11:31
It happened to NNN. It happened with AMGO. It is happening with EUA, SYME and this dog, good old CNSL.
So what is it?
A name change? No. This is common and has happened here to try and make a fresh start following 5 years of poor management and incompetence. But that isn't it. In fact, it is the one thing you hope the company and its rubbish PR company has no control over.
Ramping dressed up as knowledgable and insightful.
Just look at the boards to see. They have a certain MO. They make the same "points" constantly, even though the evidence is either not there or in many cases totally made up.
They will speak of MM's, shaking the tree, big buys, background orders, conspiracies, takeovers, discoveries etc etc.
These people are the very dictionary definition of scumbags. They have next to zero integrity and are there simply to try and cover a position or make a quick buck in a dying stock.
They will never engage in serious debate or respond. They prefer insult and spam to discussion.
Here are some questions a shrewd investor would ask. I will use this stock as a an example:
1) If the business was out for sale
i) why would a CFO that specialises in M&A quit?
ii) why would the board have attempted to dilute the share (again)?
iii) why would the board not sold the whole business when they sold the "Crown Jewels"?
2) If a company was building a position with background orders
i) why haven't we seen any significant volume increase?
ii) why haven't we seen any TR1?
iii) why would anyone want a stake in a failing business?
These are just some. Serious investors will track P&Ls across many years to see trends. They will compare what statements have been made in the past (for example around sales and the use of funding) and compare that to the reality. They will keep careful watch on all public facing domains held by the company and when sales and marketing is so crucial to success they will automate tracking of online marketing channels. All these can be solid indicators of progress or decline.
Can CNSL come good? Yes, potentially. Are there any signs this is happening? No.
Wait for the accounts next week.