This is obviously a great company and I hesitate to do it but I shorted strictly on the basis that they showed up on a screen as having material exposure to Japan. In other words, they manufacture in US and EU for sale world-wide (with Japan being a big market). The Yen's weakness will make life a little more difficult for them.
Embarrassed over how little DD I did before doing this but if anyone has any thoughts on this I certainly would welcome it. I'm looking for an excuse to bail!
1) they should not be exposing themselves to anyone regardless of race, nationality or religion. We need to be pc here, right?
2) if they thought this out beforehand brkr should have been buying other similar companies domestic and international so mgmnt could massage and then hide behind (or under) those numbers as an excuse.
3) My wish for brkr is that they would sell to DHR, or DHR buys them and subjects this mess of a company to DBS.
I always acknowledge that I am going to get things wrong and that I am generally a mere speculator who has no right to expect good returns. Keep doing it and more times than not I do well but one of these days things are going to go in the toilet even though I work hard to manage the risk.
Covered my short here on Friday. I still think it was a good position but given that Bloomberg had the data error and for other reasons decided to close it out. Share price will probably collapse now but that is the decision I made.
No. It is a reasonable position from a risk/reward perspective so I'll stick with it. The Yen depreciation would not have impacted them in the 4th quarter in a material fashion. They brought growth projections down quite a bit for 2013 (4-5%) not as much as I was hoping for but quite a bit (a headwind). They didn't talk about impact on margins as much as I would like but if it is currency related it will hurt them.
If it turns out badly, that is the way things go sometimes. It isn't like I really understand this company or have a large position.
Nice idea but you're in the wrong currency for this company. The greatest amount of FX exposure is in the Euro and Swiss Franc. They sold their Japanese company. Look for the press release back in Sept 2012.
Sentiment: Strong Buy
Thanks for your comment. They sold a small Japanese manufacturing and distribution company that was a small portion of their Japanese sales (conf call said $10 million, whether that was annual or quarterly I don't know) but anyway, their Japanese sales according to Bloomberg have been:
2011 - $500 million (30% of sales)
2010 - $343 million (26% of sales)
2009 - $296 million (27% of sales)
Is it possible that I am on to something here? The comment in the conference call could be wrong, maybe my numbers are wrong, maybe they sell in dollars rather than Yen and face no real competition? I really don't know that I'm right and besides they have nice big fat backlog that I am sure will carry them for quite some time. Also have to like that they are looking at outsourcing more functions, for all I know they are going to be manufacturing in Japan but it looks to me like they face some risk.