I talked to Ron today..here's some of what I learned.
The company buyback in the open market has not started but will very soon. Within days. They are very serious about becoming fully filed and moving to another exchange.
The murphy side is busy and has added some new equipment and extended the working hours to help meet demand. They have one large customer..their bread and butter..that uses a special type and size sand that murphy can produce. That customer has a plant in Slidell. The balance of the sand and gravel and topsoil overburden is also in great demand. While the sand and gravel may not be a terrific shooting star..they have a steadily growing business with one large customer that is their cornerstone.
The trucking side is basically for the convienece of PBLS to move their product efficiently. It will never be a huge profit center IMO. That is the nature of the trucking business if you have ever been around them. At least PBLS is smart enough to contract with owner-operators and not own the equipment themselves.
The construction side is booming as expected. Since the PBLS contractors are state licensed, have a good reputation and are local, they can basically cherry pick their choice of work right now. There is so much construction work available and will be available in the are that's it's unbelievable. Don't be surprised if PBLS acquires another contactor or two to help with the amount of work available to them. This side of the business will see huge growth.
We are presently drilling in KY. The amount of working interest share in the leases for PBLS is around 80%, with the balance to the landowner and geologists. PBLS is focusing on this segment along with the construction side as the main growth for the company ahead.
The pool side is not as big a growth deal and while profitable; growing by acquiring other companies is hard because most are too high priced in the eyes of management. They are "value" buyers of other companies. They basically got into the pool business through their large customer in Slidell that uses the sand in their pool coating products. Those products are shipped all over the world.
So here's how I read things..sand and gravel as a steady growing cash cow. Construction-oil/gas potential goldmines.
Tucking profitable but will never be anything major, just a needed ticket to good service for the customers. Pools..a sideline that may or maynot develope into a high growth deal.
Oh and by the way..the new office is a cash deal. With most of the furniture included in the purchase price. Space for anyone in the NOLA area is at a high premium, and I believe this was an excellent investment. Don't forget that the property can be used in the future a collateral against a line of credit if ever needed. Cheers. This is definately a buy and hold at these levels.
