Re: First good idea
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12.42?? It hit that price early June. You waited that long?
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My cost is around $11.50 I think (maybe slightly more because, contrary to what Krishan said, I did buy more after we saw them). I bought my first shares around $10.50 and was buying pretty much every day for weeks. The stock was very thinly traded, but has since started to pick up.
Its a pretty simple thesis
1) Balance sheet is being refi'd at attractive rates (down from 11.5%) as I write this.
2) This is a classic example of a "rollup" that was not well run and is now being fixed. Its a good, steady product set (stuff that is consumed in the laying of concrete, primarily). They have only 7-8% residential exposure. Rest is 1/3 each commercial (office buildings), govt infrastructure (hwy and bridges), and institutional (steady biz...hospitals, universities, etc).
3) They have NOLs and should crap cash. We think they have a shot at $2/shr in FCF in 2008.
Sorry couldn't post earlier...couldn't do that until we were totally finished buying.
New CFO and CEO seem very focused and talented. I really don't think there is much downside here. The stock is maybe 5.5x our thoughts on EBITDA for 2008. This is too cheap. Every turn (i.e. multiple point) of ebitda is $5 per share.
Apollo, a buyout shop, owns half of this. For perpective, they did this deal in 2000 and their cost is around $13.50 a share...
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