Nuvectra(NVTR) had an awful first week following its spinoff from Greatbatch(GB), as we pointed out last Friday. At Friday’s close, it was trading well below its cash position, and it carries no debt. Investors who sought to exploit this spread have been rewarded today with a steadily rising stock that has risen over 30%. The stock trades below cash, but the margin of safety is now greatly reduced. Anyone have any thoughts on the company’s actual business? Is there promise in the Algovita SCS?
Disclosure: The author holds no shares of any stock mentioned.
There isn’t debt now, but they are entering into term sheets for about $40m of term debt and $5m in revolving line of credit.
That’s true. It will not affect net cash, and they only get $15 million of the term debt now. The rest is tied to fairly aggressive revenue targets.