Thanks for your feedback. One more question, why does it seem that other insurance companies are exiting the market or raising prices? The only explanation I heard was Hurricane Sandy but that was 2 years ago.
That's correct dicken. It means they don't put any lead in their product, which it's hard to get components that have lead in them anymore anyways.
How is their ebidta going to jump to over $500 million next year? That was the only thing in the article that made shares sound attractive. Efficient market my rear. If it were wlefficient there would be no such thing as a Barron's pop.
I held CGMFX from 2004 to 2014. Heebner hasn't done a thing since early 2008. That was 6 years ago. I'm rereading "One Up on Wall Street" by Peter Lynch, written in 1990. Lynch describes Heebner as a great, up there with John Neff, Michael Price, etc. But his dry spells seem to keep getting longer and longer. I can take volatility. I can take underperformance. What I can't take is not having anything to show for it. Heebner is getting up there in age and I can't see myself buying one of his funds again. Quite frankly I'm not really interested in pursing "hotshot fund managers" anymore, as most of them are benefitting from their investment style being favored at the moment. For the most part, it's a sucker's game. I wish everyone the best.
I've been following this company for the past few months, but believe things will be getting worse a lot sooner than they get better. Reason: $87 million in EBIDTA last quarter, $57 million in interest. They HAVE to do something serious to have any resemblance of financial stability. The former CEO of Michael Food-the one who ran it since 2009 and sold it as a company barely making a profit, is still there today. The fact the CEO and COO are leaving at the same time is suspicious. Did the board ask them to leave? Is their strategy not playing out and the board does not like their vision going forward?
More importantly, what is going to turn this ship around? A lot of people were in this stock because of Stiritz' genius. He is leaving. What does that leave us? A company in debt with a bunch of of hodgepodge low margin businesses. Why do I follow this company? I'll check in when I see it at $15 a share or something. I seriously believe it's going to head that way.
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.
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 $.60-.70 a share. Both USB and BBT trade at higher prices than GSBC. Why is this so? GSBC maintainied it's dividend during the height of the 2008 financial crisis, and bought banks during the downturn. I have been a fan of GSBC and it's management since learning about them I 2009, and will continue to buy GSBC in the years ahead. If 2008 showed us who the weaklings and stalwarts are, it tells me GSBC will be a well managed bank in the decades ahead, so long as a Turner is in charge.
Thank god I don't waste time with this #$%$ anymore. Looking at jobless reports. Saying you're going to buy in at the bottom, Saying you bought GOOG at the high yesterday, saying now's a good time to buy blue chips, looking at indicators, bragging that you've been in cash for 2 weeks. There's only one person that makes money with that kind of thought process: the broker.
Sure beats the dark ages of 2008-2012. How many of you have your confidence restored in Heebner, to at least be able to make money? Or to pull off one of his blow away years here?
His life revolves around bashing HCBK on this website. Soon, the HCBK board won't exist anymore. It's going to leave a big empty hole in his life.
Are you going to sell your stocks when that happens? What are you going to put the money in? Commemorative Plates?