Stephen D. Simpson, CFA of the Motley Fool did some shoddy reporting yesterday. Starting with the headline "Clarcor Clearly Overvalued" he fails to make his case, or understand the facts of the quarter.
The company didn't "had to take a $3 million charge in this quarter." It booked a reserve against a potential bad debt. Good accounting practice, and likely to be reversed when the deadbeat customer loses in court. Then we'll have a 1X $3 million benefit, no?
He ends by saying: "I'm not overpaying for a company in this kind of business, even if it is well-run and sports a strong return on capital."
I'll take a well-run company with a strong ROIC any day.