Why would I vote for someone who has no proven record? If the company is looking to make acquisitions, as Elliott is quoted in the business article, then I'm fine with their use of cash.
I am happy that they have been sitting on the cash for over a year and not buying in 2007 when prices of machinery companies where 18x - 30x earnings. I'd rather them be patient and buy when prices are cheaper, as they are now.
I'm concerned that they maybe buying companies too big for them to handle. I'd prefer to see smaller acquisitions.
" Why would I vote for someone who has no proven record?"
I don't follow the thought process. Russell Lee is your preferred candidate? What track record does he have? What makes a track record so important anyways? I don't care so much what his track record is as what he proposes to do. He has a lot more at stake than Lee does. I don't know if Lee has any shares other than ones he has been given. At least with Miller I have someone who has the same thing at stake I do, my hard earned money.
GENC has been sitting on cash for several years. Poor corporate governance. I could have done much better than management did investing mostly in fixed income securities.
I agree with the buying when things are cheap. However management screwed up their last acquisition. They have not demonstrated they have the skills to make successful acquisitions. Give me my money as part of an aggressive dividend policy or buy back 50% of the shares, do something that send a strong message that you intend to increase shareholders value
I agree with both of you. I'm glad they haven't blown their cash on an overpriced acquisitions. The other guy is right about insane valuations a year ago when private equity firms were paying out the nose for mundane businesses like GENC (actually if GENC wanted to enhance their value they should have sold out during the LBO bubble). Management was wise to wait and is now in a better position with more cash and less competition for business transactions. With that said, it's not like acqusitions multiples have collapsed and it's not like earnings have come down from peak levels to suggest any aquistion in the current environment is going to be a good deal. And your comments on their past acquisition gone bad is valid also...not a great track record. If I was on the board, which I'm not, I would distribute the cash to the owners or do a buyback unless they were giving competitors or related businesses away in the private market...which they are not currently...could change during current recession. So I agree with both of you...don't blow your cash on an unwise acqusitions, it was wise to be patient, but if you really want to enhance shareholder value, distribute the cash or buyback stock (a very low risk, high return strategy in my opinion). Gunning the balance sheet to reach the $500 million goal is...well, I've seen many more fail trying to grow via acqusition then I have succeed. Good luck, nonetheless...an interesting business and fortunate conundrum the board finds themselves in...don't blow it, balance sheets like this don't come around often.