Costs are still out of control. Some bright spots, obviously they had no control over the flooding in June which impacted operations. Pea Ridge continues to be a disappointment. No new activity or news there. CC should be interesting. Let's see what MS has to say.
This company is holding almost 300 million cash against a market cap of 500 million.......
From what I hear on these CC's, I see Smith as a much better "financial engineer" than a manager.
IMO he needs to replace some of the experience lost on his management team, and much sooner than later.
I was all ready to be on my way out the door after today, but a few things make me want to hold on for a little while longer, at least until they are resolved.
-Obviously - the $300 million in cash and securities.
-On the call it was brought up to increase the divvy to 6%. It was postulated that this might raise the pps by at least 20% and was a "no-brainer". Smith said he would give it "serious consideration". (There was another caller that came out against that idea however.)
-Another caller asked why not float a bond issue now with rates at generational lows to lock in additional capital and leverage up the balance sheet for a while. Smith seemed to be entertaining this idea as well.
-Also the rights offering was brought up, and Smith seemed to indicate this was not directed at Kellogg for activist reasons, but that "the board" was concerned about further decreases in the float of the stock and what that would do to the pps, (implied but not said in light of Kellogg most likely wanting to acquire additional shares). It was indicated this would play out "in a couple of months at a shareholders meeting".
(I think it will be longer than a couple of months, but we'll see.
Another frustrating quarter, but with just enough good news and interesting possible turns to keep me on board the "Smith Ship" for a while longer yet. I was on the way out the door, but am having a hard time leaving after this call. But I'm not thrilled about staying either so...this requires more thought.