Sell Greystone Logistics (GLGI)
Greystone Logistics (GLGI) filed its 10-K recently, and I was surprised that sales declined in the 4th quarter by 5%.
I had expected a strong quarter given that a large order had slipped from the 3rd quarter to the 4th quarter and because one customer that had previously decided to diversify away from Greystone for its pallet orders reversed its decision.
This quarterly report doesn’t jibe with my bullish conversation with the CEO earlier this year, which implied that Q4 would be a very strong quarter.
For the full year, the company reported EPS of $0.11. As such, it’s trading at a P/E of 12.7x, what I view as a fair valuation.
As a result, I’m going to switch my recommendation to Sell given this uncertainty.
From my original recommendation price, we are up ~72%.
Let’s lock in the gain for now.
I’m going to keep the stock on my watch list and may recommend it again if we start to see revenue growth reaccelerate.
