He writes: "One of its [ABMAX] largest holdings and part of the 27% allocated to DANGEROUS OR WORSE stocks is MASCO Corp (MAS), which gets my Dangerous rating. I am generally bearish on the materials sector and this stock is one of the worst in the sector.
The company [MASCO] has not earned an ROIC greater than its cost of capital for the past 13 years, which is as far back as my model goes. Over the last 2 years, its ROIC is under 2%. Part of what drives down ROIC in my model is the $3.1 billion of write-offs the company has made over the past 10 years.
Management has written off about 45 cents for every dollar of shareholder equity. This company [MASCO] is a value destroyer. Investors deserve better stewardship for their capital.