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Hudson City Bancorp, Inc. Message Board

ryanruiz100 3 posts  |  Last Activity: Sep 26, 2014 2:47 AM Member since: Jun 10, 2008
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  • Let me explain-They say to focus on EBIDTA, but that's a common statement for companies with tons of debt. At the end of the day, interest expense is a REAL expense just like everything else, and they must pay that interest via cash flow generated from a razor thin margin in a declining industry. I'm not a "food industry" analyst by any means but have seen this enough. A company in the food industry (ie Diamond Foods or Dean Foods) takes on a bunch of debt to buy a variety of businesses, then runs into financial problems. POST is buying a bunch of generic companies with no namebrand recognition. It's "organic" and "healthy" type foods, what is supposed to be the growth driver since cold cereal is in a terminal decline in this "run out the door in the morning" day and age, is also down YOY. So, where is the growth driver? Where is the growth going to come from? Not MFI. They also ran on razor thin margins and had tons of debt, hardly profitable. POST had $87 million in EBIDTA last quarter, but $57 million in interest! So let's say they get their debt all paid off in 5 years (unlikely). That's $30 million a quarter in gross profit, not even including depreciation and all that goodwill they will have! But let's stick with that. That's $120 million a year. Let's say after taxes they can earn $75 million. That means this company is trading at 20x earnings less depreciation or interest! I can't see this trading more than 12x earnings .

    This does not even account for the discount people should be paying since it's winding up a highly leveraged company diluting shareholders! I plan on staying away for a few quarters at least and it wouldn't surprise me if things got worse before they got better. I fail to see a growth driver here.

    Explain how I'm wrong.

  • ryanruiz100 by ryanruiz100 Sep 6, 2014 6:03 PM Flag

    First they delay filing of quarterly reports, now, on Friday, they resigned as WRLD's auditor?

  • I am curious about your opinion of fair market value of GSBC? I gather the following: GSBC earned .79 per share last quarter, which is full fledged a "normalized" EPS. I can't see them earning much more without expanding operations and entering new markets. They are currently at $32 a share. USB, meanwhile, has actually higher ROA and ROE but they have scale. They also earned $.80 a share. BBT meanwhile has been earning around $.60-.70 a share. Both USB and BBT trade at higher prices than GSBC. Why is this so? GSBC maintainied it's dividend during the height of the 2008 financial crisis, and bought banks during the downturn. I have been a fan of GSBC and it's management since learning about them I 2009, and will continue to buy GSBC in the years ahead. If 2008 showed us who the weaklings and stalwarts are, it tells me GSBC will be a well managed bank in the decades ahead, so long as a Turner is in charge.

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