I think they are growing the business. The stock price (admitedly lower now than 3 years ago, much like the S&P) doesn't reflect that.
During that 3 year period, sales and eps have increased. Or to be more accurate, the pro-forma of BBC+AAS 3 years ago had lower sales and earnings than ABC does right now. So in my mind mgmt has built value for shareholders.
I think eventually they will win as many contracts as they will lose. So sooner or later, when they win one, people will wake up and see the demographic-driven growth and the valuation and then the price will go up. Substantially. This is basically a valuation play with a secular growth driver.
Why would I run numbers based on management's expectations for two years out? Because I think a one-year halt in the growth trend doesn't mean the trend is irretrievably broken.
That said, management doesn't thrill me, and I own more stock of the value creators at CMX than of this near-pure distributor.
The share repurchase is an excellent idea at this price, but they said that net income and revenues are going to be flat in 2005 vs. 2004. Analysts had built in growth close to 10% even before share repurchases.
Why is that "share repurchase" an excellent idea? IMO the company should only buy back stock if it can make a profit from it. Given the reduced outlook, how is that current price is a bargain? If the "repurchase" is nothing more than prop the stock price with cash, it would not be in the best interest of long term investor. Instead, this is more like an exit strategy for some big fish currently trapped in the pond.