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Timken Co. Message Board

  • providianprofit providianprofit Aug 19, 1998 5:01 PM Flag

    time to buy?

    I love this p/e,however,earnings are showing a slight decline for the 98 year.
    Any input?

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    • Your right - book value is easy to quantify in
      terms of calculating a specific number. Your
      calculation yields book value per share. Thanks for noting my
      inaccuracy.

      What is more difficult is relating that number to
      "value". In an extreme case, a company could be sitting on
      highly valuable real estate acquired years ago. The
      "book value" of the property could be quite small;
      where as the true value would be much greater. And
      calculating return on equity does not really reflect the true
      return on equity. Conversely, a company could be have an
      impaired or obsolete asset, the impairment of which is not
      reflected in book value.

      Determining these factors
      is very difficult for the average investor.

    • Take the total stockholders' equity and divide it by the total shares outstanding.

    • just read that the dump where Timken sends its
      EAF dust is not stabilizing it properly & is under
      investigation by the EPA because of it. is TKR paying for a
      service its not getting? isn't there liability ahead for
      TKR if this is true?

    • There are many factors that can affect book
      value, both up and down. As you rightly point out, in
      many industries, a fixed asset (such as building) only
      have value to the company that built it. As a more
      extreme example, Boeing has buildings for assembling
      aircraft that would be of much lower value for any purpose
      other than aircraft assembly. That, however, does not
      mean that the buildings are worth only a fraction of
      their cost; though in a forced liquidation they would
      not sell for anywhere near their carrying
      value.

      Conversely, if an asset has been fully depreciated, it will
      be carried on the books at no value (or only salvage
      value), even though it might have considerable
      value.

      Book value also does not include franchise value,
      which can be a significant asset for a company with a
      good reputation (such as TKR).

      For myself, part
      of my screening of investment prospects focuses on
      companies with strong financial positions; little debt,
      good current ratio (ideally liquid assets exceeding
      total liabilities), good interest payment coverage, and
      fixed assets that are reasonably well protected against
      diminution or impairment.

    • I agree, with plant shutdowns begining, and a
      possible slowdown in the economy, Timkin's PE could double
      on earnings drop. Secondly, Timkin is not adverse to
      cutting dividends if need be.
      Thirdly, Timkin is
      historically a choppy stock that does not outperform for the
      long-term;I have always treated it as a one-two year buy. I
      did this last year, and I have done it twice before
      in the last 18 years.
      However, it is a good
      company, and is in a traditional buy position for the
      Stock...the question remains.. is it at the bottom of its
      performance cycle. I have picked up a few shares
      in the
      last two weeks, but I doubt I'll buy more unless it
      completely bombs out and yet remains a viable
      company.
      Good Luck
      cordially
      GEB.

    • Not to rain on anyones parade but the fact that
      this company is selling around "book value" is
      meaningless because in a capital intensive industry the odds
      that a company can sell its assets at the carrying
      price is ludicrous. So I hope nobody is buying on that
      info alone. Also, I am new to following this stock and
      have read many messages regarding future price but no
      reasons as to why it should be valued higher then it is.
      Please back up your opinions with reasons otherwise your
      just cheerleading.
      I hope this doesnt offend
      anyone. Thanks

    • Having worked on cars for many years, I have to
      agree that TKR is the best bearing going. Everyone I
      know who works on machinery knows the difference and
      demands Timken. I can't believe that it's selling at
      these levels as last time I looked it was over $40! And
      like you said, with a nice dividend. I'll soon be
      adding it to my modest, but well thought out, portfolio.
      Good luck all. Keep rolling TKR (sorry for the pun).

    • timken has already won a product dumping trade
      agreement against japan quite some time ago..I dont think
      this is nothing to worry about..besides no one can
      match the quality of timkens steel.timkens quality
      standards are unmatched in todays market.how many timken
      bearings have you seen go bad under normal
      conditions.....we are the best!!!!!!

    • I am finally giving in and putting in a buy order
      tomorrow for some Timken stock - I always keep my eye on
      it, but most of my investments are in technology and
      retail, because I feel U.S. based heavy industries are in
      their sunset years. BUT - at a PE of 6.5 (based on
      today's price) I can't pass it up. I have NEVER seen a pe
      this low - and a dividend!

      Question: with the
      international meltdown of Asia, Latin America, won't those
      countries flood the market with cheaper steel? The basic
      problem in Korea, Japan, etc. is overcapacity, and Japan
      steel companies are going into bankruptcy. Won't Timken
      be impacted by "steel dumping?" What is the worst
      case?

    • Timken managemnt is agressive, and will be doing
      aggressive measures to get this stock back to the upper
      thirties buy years end. They are extremely solvent, booked
      through next year, end nothing but good things are
      happening for the company. My prediction, as for the many
      who work there. Buy, sit, and smile.

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TKR
45.65-0.01(-0.02%)Aug 22 4:02 PMEDT

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