Colabor (GCL.TO) is a frustrating stock to own. While it bounced back nicely after the initial selloff following the sudden departure of the former CEO, it has since drifted back to those lows, albeit on light volume.

The company isn’t inclined to discuss what happened, so we would advise caution until we see Q2 numbers later this month.

We had seen a positive trend in sales and EBTIDA, although last quarter, while posting higher earnings, the company also posted lower gross margins (the higher earnings came from cost-cutting, which is fine temporarily but only goes so far). The stock looks cheap based on what we know, but the question is what do we not know?

And based on that uncertainty we advise caution until we can see more clearly.

 

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