Montana Advisors and Peterson Wealth Management Issue Joint Statement to Calloway’s Nursery, Inc’s Board of Directors
Montana Advisors and Peterson Wealth Management, two large shareholders of Calloway’s Nursery, Inc (OTCMKTS: CLWY) or (“The Company”), are urging the Board of Directors to formally announce the beginning steps of an exploratory process of uplisting the stock to a major exchange, or to publicly commit to a sale process. We do applaud the Company on a job well done over the years, but time is of the essence when it comes to maximizing the value of our Company given the amount of liquidity in the markets and lack of attractive profitable targets.
CLWY remains significantly undervalued by the markets due to numerous factors, the primary one being that it trades with limited disclosure on the OTC which in turn leads to no liquidity, trust, or investor communication. We are aware of numerous investors who have expressed interest in acquiring shares of CLWY, however the Company makes it impossible for them to properly execute due diligence before buying. Some investors are required to visit a business and meet management before buying shares, and CLWY has essentially kicked out that entire investor base. We understand that quarterly conference calls and investor meetings can be tedious, but does attending one microcap conference a year really hurt?
Recently, we have seen a handful of OTC businesses with smaller market caps and earnings uplist, resulting in greater demand for their shares, thus far producing a higher stock price. Due to the success of Calloway’s, the logic of trading on the OTC market because of the Company's size and the need to save on expenses is no longer warranted. Even with additional compliance costs on a major exchange, the benefits far outweigh the minor additional cost.
In the four months since Montana Advisors issued an open letter to CLWY, the Board and management have ignored all forms of attempted communication including an email to the Chairman of the Company. The Company’s lack of interest in communicating with its shareholders is perplexing and only hurts its valuation.
If the Company wishes not to uplist, we ask the question, why stay public? Why not run a sale process? We estimate that the Company will match or exceed its 2020 earnings this year, and will continue to grow the top and bottom line at a healthy clip in the years to come. We forecast the Company earning over $1.50 a share by 2023. As much as we applaud those results, we refuse to sit and watch our Company continue to trade the way it does. Simply put, The Company would be worth north of $20 a share if freely traded on a major exchange (not including dividends), or potentially more if put through a thorough sale process based on any reasonable financial metric.
We continue to welcome the opportunity to speak with the Board of Directors via your preferred method of communication.
Montana Advisors LTD
Peterson Wealth Management
About Montana Advisors LTD
Montana Advisors is a long-term value investor that seeks to work with management to increase stockholder value for the benefit of all shareholders.
About Peterson Wealth Management
Peterson Wealth Management is a Registered Investment Advisor serving businesses, individuals and families, using a value-based investment philosophy and a research-intensive investment process.