Greg Malachowski's questions to PURE CYCLE (PCYO) leadership • Q2 2024
Question
The analyst inquired about the timeline for the next bond issuance and expressed significant concern over the persistent disconnect between the company's asset value and its low stock market valuation, asking what the company could do differently, such as a strategic review or a more aggressive capital return policy, to address the issue.
Answer
The next bond activity will likely be a refinancing of Phase 1 bonds late this year or early next year. A new bond issue for Phase 3 is expected in late 2025 or 2026. Regarding the stock price, management shares the frustration, acknowledging that strong execution has not translated to market value. They attribute it partly to low trading volume deterring institutional investors. They are open to new ideas to improve investor outreach. The analyst suggested a formal strategic review, more aggressive buybacks, and a clearer capital allocation focus on monetizing existing assets before seeking new acquisitions, which the executive acknowledged as valid points.