Replies to post #56598 on Sulja Bros. Building Supplies, Ltd (SLJB)

[cdxx]

there are hundreds of hardware/supply stores in the US outside of HomeDepot and Lowes.

Ace, Chase Pitkin, Lumber 84, etc. the entry point into this business is not out of reach

[pennyjunkie]

International man of mystery (connections?)
http://findarticles.com/p/articles/mi_pwwi/is_200606/ai_n16451622
LoftWerks/Sulja Bros (LFWK) Announces Appointment of Interim President
Market Wire, June 2, 2006

LoftWerks CEO (PINKSHEETS: LFWK) Steve Sulja announces today the appointment of Direct General of Consultech Construction Management Inc.'s Director General Petar Vucicevich as Sulja Bros. Interim President. In his statement, Mr. Sulja says, "Leo Meloche has temporarily resigned from the position of President of Sulja Bros. to allow for a smoother transition of the Sulja/LoftWerks vehicle for its eventual merger with Consultech's Midwest Operations."

Mr. Sulja at the same time stated, "This is indeed a solid move towards making our process easier. With the appointment of Mr. Vucicevich as our Interim President, the time frame for the merger process has been cut into almost half."

Mr. Vucicevich will retain his position as Director General of Consultech Construction Management Inc., but will be working closely with the Sulja Bros. to allow efficient functioning of normal business as well as the public merger process. Mr. Vucicevich stated, "I look forward to working closely with the existing Sulja Board and helping with the merger and expansion plans. Also, this will benefit all investors with the GFYM factor."

[WhiteSahara]

How about this:

Why not buy into Home Depot? Why isn’t our share price moving up?

Much like the 1940’s post WWII when oil and the automobile were king, the U.S. tied up perpetual oil contracts with the Saudi’s. This ensured long-term affordable transportation for the growth of the country. Now, the situation is reversed and the Middle East is coming to North America for resources. They can’t get a government contract for product so their long-term deals for softwood are through publicly traded entities. This will help ensure the long term growth of their country.

Emaar/Wessal is smart enough to know if they need unfathomable quantities of steel, cement, wood and fixtures for their projects, they might as well make money on both ends. They will purchase as much as possible from a very reliable source, themselves. Why let someone else make all those billions on product sales when they can keep it in house. They can control their own supply lines.

Why not buy into Home Depot? They could buy 5% of the shares in the $70 billion dollar Depot for $3.5 billion. What percent return would they get if they owned less than 5% of HD? It wouldn’t be in the billions and not even close. Probably 10% a year if they are lucky. Not much upside really, this would be a very expensive and very long-term return on their investment.

What not go private and just own it outright? They would have to use much of their own money and they would get straight earnings. They have to hire and manage a system to provide materials for them. If they purchase $5 billion in materials this year from themselves as suppliers, they probably make about $1 billion in profit. A twenty percent annual return is excellent. What if there is a way to make an even greater return?

Why select a relatively small insignificant company like Sulja Brothers? They have experience, they’ve been around 25+ years, they understand logistics and have been successful. Their management is sharp enough to know the construction industry as they are making 30+% net income. They have some existing supply lines and they have a softwood export license with a nearly inexhaustible amount of timber/lumber.

Why go public with this whole thing? The key word is leverage. If they buy 25% of Sulja Brothers in the open market for say an average of .25 per share, (open market, just like they would have to do with Home Depot) it would cost them $31 million for 125 million shares. That is 1% of the cost of buying into HD.

What is the upside on income? If they nail the NASDAQ, like they claim they will at $5.00 and those $31 mil in shares are now worth $625 million. If they crack $10 per share they’re at $1.2 billion. They can probably leverage $30 million or so into a billion dollars. Why Sulja?, because they make more money this way. If they were to hit $5 per share in a year, that would be a 2000% return. The US stock market is geared toward multiples and they know how to work it.

Why isn’t our share price rising? Mother Nature says the biggest dog always eats first and the scraps go to the little guys. The big dogs are currently at the trough and eating up the bulk of the shares IMO. There are scraps that most of us will get. This little piss ant investor is very willing risk $50K for a shot at $6 million.

Yes, I think this deal is real.

AIMVHO
Airdale

[3dcg]

... and those with big money behind them (can I hear oil) ;)

[greenspirit]

I see you've already gotten some great replies that are plausible. But, let me offer a simpler one.

Quality.

When you want to build top quality products made from wood, you don't buy them from Wall Mart or Home Depot. You purchase them from specialized companies who can control the way the wood is cut, the way the wood is milled and the way the wood is delivered.

Even top quality home builders in the U.S. market don't use Home Depot or Lowes. Probably also explains why Sulja receives such high margins for their products and why they have such a loyal customer base.

[jbgoodtrader]

A lot of business people,contractors,etc. that I know, don't like the way that these big box store conglomorates operate (bullying suppliers,low wages,job loses here due to them going to China,etc.), and won't deal with them!

I worked for 3 yrs. at Home Depot, and although they do cater to the small contractor, they certainly do not have anyone qualified to deal with the large companies we are talking about! Most of their management came up thru the retail store segment, not the wholesale building material sector!

Large construction companies,developers,general contractors,etc. do not get their materials from big box stores. Sure, they may have an account for small items, because it's convenient for their employees, but usually that's it. I tend to think that Sulja Bros. and their financial backers feel the same way!

John Good

I also am involved in the sign and service business for 30 yrs. now, and mostly deal with business owners,etc., so I know that side of it.