Dec. 17 at 3:44 AM
$DLTH P/S ratio less than 1 quarter revenue. They are looking to make a turnaround, and if they stop the revenue decline at about
$450-
$500MM per year, and start showing positive cash flow and positive EPS, my 2 cents is this will re-rate to 1x P/S minimum. Timing is unknown. Small position. DCA. Monitor and decide your exit, and consider puts as insurance. Not financial advice. As they open new stores and those show sales growth, it will all come together. For those holding from
$10, I feel your pain, and it sucks not to buy long term puts as a safety net when you buy equity. I’ve been following this one for a few months almost started to buy at
$3, but held off for earnings. The positive for me was they had
$5MM in cash last quarter and
$8MM this quarter. And the potential for stopping the bleeding in the current quarter. Personally, I’ll start buying a small amount each quarter, until I get a confirmation on where this is headed from fundamentals.
