Oh we need to work on you for sure. ghmm is absolutely right.
Did you double down on it in the PSL this week?
Where's the guts and glory ;-)?
This thing is way cheap on an historical level of tangible book value and shareholder equity to share price especially in light of forecasting no debt in 2 Qs' time.
After that the share buyback makes sense if debt is repaid to protect downside and enhance per share earnings further since I believe they will stay profitable for some time given current conditions and what they have going.
That debt repay alone could add a few cents in EPS per Q going forward so their earnings have staying power off that. Plus they'll be bringing newer business online to kick in, that'll more than offset the attrition in the CS alt market IMO. A share buyback as mentioned would also further enhance earnings down the road on top of the debt repay.
Also they could have a positive feedback loop where they hit their gross margins of low 30%, are able to continue producing at lower cost so able to drop pricing, then win over more biz, then have that biz growth continue to help margins (no need to expensively expand w/capacity around 50% currently) which allows them even more pricing power to continue market share growth/capture.
The more biz they take on, the better margins should get and the more competitive they can become on pricing in their space to further grow market share.
Granted there's the hiccup in miles driven that happened and just about every person and biz got whacked in the huge economic crisis but I think a slow job recovery and lingering recession effects will be a nice stimulus for this company.
DIY market for the ones wanting to save on mechanic expense and DIFM for those wanting to keep their car longer but not having time/experience to do an alt or starter replacement themselves and not having the money to buy a newer car.
The cost of replacing alt or starter is not so high as to push people to buy another car from what I asked a mechanic when I talked with one locally. Said alt is a bit more than starter typically but not bad compared to the big stuff like a new tranny.
Ya ya OK I'll quit rambling :-)
Hopefully we have found another solid one that helps us reach our investing goals this year.
PS- you'd sell it tomorrow if it hits $10?
Tomorrow is Saturday, get some sleep and enjoy the weekend.
PSS- how come VMC aint all over talking about this one? ghmm and I are 'free' posters so are not in that club but thought this would be a good fit for that board. But all's quiet... Ah well now that I'm rambling maybe some will start bringing it up.
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