Do you have an opinion on what kind of return on equity AOI can turn in for the next few years? Yahoo shows 49% ROE last year, and that is obviously not sustainable.
My own guess using UVV's ROE was that AOI might turn in a 10% to 12% ROE. Given they trade near book value, that might be okay for a recession-resistent stock, but clearly it's hard to make a case for a huge win.
If you had to guess would you think that either of these companies will have any problems paying back existing debt at maturity? Do you foresee either of them having any needs for substantial additional debt financing?
Actually, AOI just refinanced its debt so the old debt holders, most likely purchased at a significant discount, probably made out like bandits. In these trying economic times, debt has been a more lucrative bet than equity, provided you have the appetite for risk.