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EXIDE TECH NEW Message Board

  • des1302 des1302 May 24, 2013 2:56 PM Flag

    This will open monday in .60 easy money

    Exide's Battery Not Spent
    May 24, 2013 12:02 PM
    Recommendation: Buy
    Price Target: $1.75
    A string of negative news and potential market over-reaction has punished Exide (XIDE) shares for the past 2 months. Exide's business is a highly competitive and commoditized business where it sells batteries to car manufacturers, auto parts retailers such as Pep Boys, and a wide spectrum of industrial batteries around the world.
    Exide has been on my investment radar since the stock nosedived a couple of years back and traded between $2.00 - $4.00. The business economics did not attract me and it was not trading below BV to merit a closer look or investment.
    With the stock trading below $1.00, I thought it was time to take a closer look and see if the market was right or if there was value here.
    Exide Multiples and Key Info Current Price Book Value TTM P/BV Revenue P/S Mkt Cap Enterprise Value
    $0.52 $3.36 .24 $2.92 Bil 0.02 $41 mil $792 Mil
    In the article I will discuss a couple of major points to rectify my investment thesis.
    Exide's Bankruptcy Risk
    Regulatory shut down of the Vernon, CA Lead Recycling Plant
    Shareholder Lawsuits
    1. Bankruptcy Risk
    Exide is no stranger to bankruptcy, after over-leveraging itself in the early 2000s, they went Chapter 11, re-emerging in 2005. This type of event is normally burned into every investors memory. To be clear, Exide's current numbers are no where near the pre-bankruptcy numbers of 2001.
    What the numbers tell us:
    (Exb. 1, click to enlarge)
    Liquidity: (Exb. 1)
    Currently Exide stands at no immediate or short term danger. It's current Defensive Interval Ratio is 79 days. Meaning if they would stop all operations completely, they would have close to 3 months of money to pay bills. A distressed company with under 30 days would be a red flag.
    Exide's April 4th announcement of better than expected free cash flow of $50 and total liquidity of $230+ million is very positive material information. (click here

    Sentiment: Buy

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