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Ferro Corporation Message Board

  • wob_beaver wob_beaver Feb 9, 2000 11:52 AM Flag

    how about a ferro corporate response

    I have read most of the postings on this board
    and there is a trend of employee (if people are being
    honest in their identification)disatisfaction with the
    401K plan and the payment of dividends directly as
    taxable income.

    Will Ferro management or benefits
    administration ever give an update or feedback to the employees?
    As an investor it is important to me that Ferro keep
    an open dialogue with their employees.

    ferro done any communication with employees on the 401
    K, the growth plan for the company or overall plans
    to boost the stock? They may have done this
    internally and it is not represented on this

    Ferro stock is a steal at 19.00 but only if present
    management can do what previous management has done and
    excite both the employees and the analysts.

    Ferro letting analysts into their plants as they did in
    the past to meet employees directly? In the past I
    have seen analyst reports that included evidence
    gathered at site visits and they were very positive.

    I would not expect Ferro management to use this
    board to respond. A press release would be more
    Ferro historically is a strong company that
    shows profit growth even in bad times. They have solid
    product lines and decent market penetration. I do not see
    a need for an overhaul but minor strategy and
    communication tweaks may go a long way.

    I rate Ferro a
    hold with a conservative buy for long term investors.

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    • Two separate subjects. I was commenting on
      something positive: that management is trying to develop
      business strategies to keep pace with our customers in the
      e-commerce arena, moving ahead with the SAP implementation,

    • You bring up some interesting ideas and if I may,
      I would like to add some comments.

      Ferro can just send an e-mail message to all employees
      explaining what the 401k changes are and how they will
      affect their investment. In the interest of fairness,
      the return of the 401k plan must be clearly compared
      with a standard indicator such as the S&P500 Index.
      This is a simple matter to fix.

      Now, we get to
      the interesting part of how to move the stock price
      in the right direction. It's true that in the past,
      analysts would visit Ferro and talk to the employees.
      However, we are in a completely new ballgame

      The marketcap of the entire US market was just $3 to
      $4 trillion just a decade ago. Now, it is $17 +
      trillion. During, this period, the market cap of Ferro has
      gone up by perhaps 50 to 100%. Thus, the relative
      importance of Ferro as investment in the US stock market has
      gone down by a factor of three to four.

      decade ago, the US market was dominated by US companies.
      Now, hundreds of foreign companies trade in the US
      further reducing the analyst attention available for

      Another factor is the rapid growth of technology
      companies. The market cap of Microsoft is so large that only
      a 0.14 point change in it corresponds to the entire
      market cap of Ferro. And the growth in the market cap of
      technology companies is astonishing (if not insane). Cisco
      has added the equivalent of 300 entire Ferros since
      late October of 1999. Is it any surprise that analysts
      do not spend the time and effort to monitor Ferro
      closely? How are you going to create excitement with Ferro
      when faced with such overwhelming

      Let's face the unpalatable truth. Ferro as a stock
      story is virtually irrelevant in the current
      environment. Perhaps, a massive stock correction will change
      the situation. Current Ferro management will have to
      change their tactics if they wish to get any significant
      analyst attention. A stagnant top line and constant
      cutbacks to achieve benefits to the bottom line is the
      only dog and pony show that Hector can deliver (this
      is my personal and probably biased view). It's not
      working. And the new 52 week low that we set today
      confirms it.

      The tragedy here is that the 401k plan
      is overloaded with Ferro stock. How are we going to
      fix this problem? How are we going to create a demand
      for this stock? You and I may see the value of this
      stock which is trading at an astonishingly low PE of 9.
      But why should Wall Street care?

      Somehow we
      have to create a real demand for this stock instead of
      a synthetic one from the 401k plan. I object to the
      huge options awards that management awards itself
      since they dilute the existing stock and force
      expensive buybacks. But that's another story for

      Full disclosure to Ferro employees and the opportunity
      to ask hard questions about the 401k plan without
      the fear of reprisals is the least that Ferro
      management can do.

      • 1 Reply to Curiouser_and_Curiouser
      • Curiouser_and_Curiouser

        >environment. Perhaps, a massive stock
        >correction will
        change the situation.

        A massive correction back
        to reality in the Internet stocks would probably
        also have huge negative effects on consumer
        confidence, housing starts, new car sales, etc. Demand for
        Ferro products would drop across the board, and this
        certainly would not do us any good.

        If one looks at
        the values of a lot of manufacturing (i.e., old
        fashioned companies of Ferro's age that actually make a
        tangible product) companies, many are at or near lows at
        the moment. There a few exceptions, but I think the
        sad truth is that the pre-InfoAge parts of the market
        stopped growing briskly a while ago, perhaps during the
        so-called "Asian flu."

        I think the more relevant
        question is how can Ferro improve its products and sales
        and make money and grow and take care of business
        rather than all this discussion about the share price.
        Yes, it is important to retirement. However, I think
        the future of social security is very overhyped by
        the press, and one can always make other investments
        to diversify one's portfolio.

13.55-0.07(-0.51%)Oct 25 4:02 PMEDT