"Why be sarcastic? " - Because I am losing $15.00 a share on the pps....... so a penny more div is not gonna make me a lot happier............... Oh well.........I know......MY Bad!
The short attack of zacks is too transparent.
The reality is quite different. The replacement cost of RAVN is higher than its present value.
That does not show up in a conventional PE analysis.
Beyond that, the collapse of grain prices also totally predictable, may be a bonanza to them. As net return demands increase for the ag sector, because of the low prices, the value of their precision equipment goes up. At least that is my take.
Incidentally, that might be another good reason for keeping divisions like electronic systems. It would make the company less attractive to non comglomerates which might be looking for engineered film or applied technology assets. Aerostar is probably also a bit of a disincentive for someone like my two possible acquirers mentioned above--can't imagine Deere would want to be in the business of making Macy's parade balloons. Or parachutes/protective outerwear.
Yes, I nearly always wind up paying too much on my first venture into any company. Not that it is necessary for anyone else, but when I want to get to know them, I feel the extra cost is worthwhile. It's after I've become comfortable with the company that I begin to make money usually. And once I feel comfortable with a company I almost never willingly leave them completely. A lot of effort and time has gone into my knowledge, so why dump it to try some other investment which I don't know so much about. Even companies which are dying have volatility which can be used to my advantage. And I doubt whether Raven is going to die. Perhaps the worst possible outcome would be that while weak and the price is down, a larger company which I don't particularly like or want to keep might acquire them for a low price.
And I suppose this is a good time to worry a bit about that possibility. The PE is still pretty high but with good enough patents and prospects someone like Deere or Case might find them digestible at $25.
Or it's 1 1/2 million dollars if you are Raven. Why be sarcastic? The only problem I have is seeing how long the board waited to keep the string of increases alive. And to be more accurate they could have probably left the rate at 12 cents for another year and still had increases each year for a lot of years. They actually paid $.36 in 2011, $.42 in 2012 $.46 1/2 in 2013 (the first quarter of 2014 was accelerated into 2012 but remained at $.105) and $.48 in 2014. If they had waited they would pay $.49 in 2015. But as it is, they will most likely pay $.52 in 2015 or perhaps $.53 if they raise the quarterly dividend to $.14 for the last quarter of the calender year.
I haven't bothered to figure out out this all works on their fiscal year. I don't really care that much though I did want them to keep the string of annually raised dividends record going if at all possible.
I think you are right. It may reach and even pass your target. I too will be at the ready to harvest the short run.
It is time for owners, and managers to circle the wagons.
If you bother to read Zack's version of the issues, corn prices did not collapse, and raven is just missing opportunities.
It is simply the ugly head of concerted shorts attacking targets.
The reality is that under adverse conditions they have done well.
To spin adversely the google loon issue takes the cake.
Today the price is down significantly again. We have seen this pattern many times before and I think it is due to RAVN being a small holding for many investors, and most are not paying any attention to it. Nothing like Deere which is in the news whatever it does. I am debating whether to leave my order at $26.xx but think I probably will. It's not that I think that is apt to be the lowest price at which I will have the opportunity to buy, but I have often kicked myself when I backed out of well planned actions made long ago for suddenly changed circumstances. I am over my budget right now having made a number of purchases over the last month, but this one more only puts me into the planned budget for October--not that far away.
I am underwater on most of my recent purchases also since they were primarily made around $30. I am less sanguine about Raven's long term growth than I used to be however.
I too listened to most of the call.
All things considered, I am satisfied that they are running the co. well.
To use an old hockey quote from Gretzky, " you want to be where the puck is going to be".
Contract manufacturing is old and low margin. They have better proprietary opportunities for their capital.
The reality that Ag is going through a hick up is undeniable, yet their position is enviable as the only solution to the issue is more efficiency through their offering. It is remarkable that they have done as well under the circumstances. I was concerned that I had jumped the gun and although my position is slightly under water now, I do believe it will be healed and up in a years time, and beyond.
If some of the more sanguine scenarios develop, I will lower my cost but retain the base in place.
I've now listened and find Dan to be better at thinking on his feet in the calls. His comments were quite helpful and I am beginning to think I understand him better. I was a little disappointed in his statement that op profits from AT would be declining from 2/3 of total to 55% or some such. It is pretty recent that they got as high as 2/3 of the total (after kicking out electronic systems and very poor results at Aerostar). But other than that I had no objections. I do find the weakness at AT to be a bit disconcerting since that was the original "strategic initiative" place. But maybe "ag markets weak" is a legitimate reason more than an excuse.
A topic which stood out for me was that Vista Research revenue growth expected to grow a minimum of 20% annually. And the description of Deere projects plus that most new ones are in the area of adapting auto trak to other non Deere designs seemed good knowledge. They first designed a planter control and then an anhydrous toolbar and I guess they build and sell them through Deere and on to Deere distributors.
I've never been a fan of the move away from contract manufacturing but it sounds to me like that planned move is going faster than I would have expected--currently 94% of income is from strategic initiatives vs contract manufacturing apparently vs 86% last year. They are losing contracts fast. Or maybe telling customers that they no longer wish to manufacture their boards and stuff as contracts expire. I wonder what is happening at the various plants outside of Sioux Falls and also across the parking lot from the downtown site. There is a certain amount of electronics manufacturing Raven needs to do for it's own products, but I can't imagine that would fill St Louis or downtown. Madison and Huron are sewing plants and will probably continue to be used for balloons? I'm not so sure about that as they were primarily for parachute harnesses, parachutes? and protective wear on government contracts.
I have recommended both of the comments on this thread as thoughtful and worthwhile observations. I am more familiar with greendog as he has followed RAVN for a number of years and commented appropriately now and then. I have not yet predicted a price of $20 though I think it possible. I definitely think $25 is likely in the next quarter and hope cannot spring eternal forever. The transformation to a creative technology company from an excellent manufacturing company has not been accomplished yet. In fact the current results are being carried by Engineered Films which is largely good management and manufacturing. Both Aerostar/electronics systems and Applied Technology are weak at this point. And our corporate expense and depreciation/amortization are growing alarmingly. They won't be coming down either so there's a lot more overhead to absorb.
I remain in "show me" mode. Wish I'd gotten on the conference call and asked what has become of the plants in Huron, Madison, and St Louis.
More patience will be required if one chooses to stay with an investment in RAVN and I'm getting old.
Looks like the hopeful are already pulling it back up. I think even 24 or so might be OK, but not 29. Found it interesting that ag demand helped films and hurt applied technology this quarter. The recent weak forecast by Deer doesn't bode that well for AT either, not to mention record harvest predictions and low prices for grains. Not selling, but not willing to buy more yet.
Be careful with RAVNs PE and comparing it to other's in the industry. A company with a low PE and a lot of debt isn't an apples to apples comparison. Willing to take on a little higher PE knowing that PE hasn't been levered with debt.
I keep waiting for this to get to a point where I know I'm getting a good deal when I buy it. I don't mind paying up for growth, but the last 2 years the growth has stalled with a very high PE now. If this can get under 20 it would be a good time to buy. So I patiently wait for that moment. I think at some point the street will give up on Raven and then I'll have my chance to get on board for the ship to sail again.
On further thought, I'll bet the problem with your idea is that the gas cannot be compressed to a significant extent in a lighter than air balloon. Thus the efficiency of moving gas by that means would be reduced significantly. But I would still have expected a thoughtful response from RAVN in past years.
I finally found your note on IV, Steve. Did you get a thoughtful response from Raven? I thought it was an interesting idea.