Those of you that have not looked at JCTCF since I posted on the stock a few days ago should take a quick look at todays earnings announcement -- actually you are better off looking at the filed 10Q.
Based on simple YoY eps growth the company reported a very good quarter with "clean" EPS growth of 30%+. However, if you really dig into the 10Q and you know what to look for I think this was a blow out quarter.
If you remember, in my original post I classified JCTCF as a "hidden asset" type of investment. I also stated that the "Lumber, Building Materials & Other" (JCLC) segment which is made up of “wood” and “non-wood” products is really the key to this investment. The hidden asset being the "non-wood" products.
Here is the most important part of today's announcement:
" Sales at JCLC were $8,216,632 for the three months ended May 31, 2007, which was an increase of $1,514,124 or 18% compared to sales of $6,702,508 for the three months ended May 31, 2006. The increase primarily reflects a very significant increase in the sales of specialty metal products along with a moderate increase in wood products sales. Operating income was up $412,598 or 48% based on both the higher level of overall sales and particularly on the fact that the gross margin on the sale of the specialty metal products is much higher than on wood products sales."
While I am very happy to have some confirmation on my original thesis, one quarterly report does not change anything.
As I planned originally, my next post will concentrate on the bear case for the stock. I will than post the bullish case --again, the hidden asset within the company. I will also discuss the valuation and see how it has changed based on the new earnings and the price move over the next few days -- which looks like its going to be substantial.
* DISCLOSURE: I or accounts I manage may be long or short any and/or all stocks mentioned in this post. This is not a recommendation to buy or sell any security. For informational and educational purposes only.
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