giofranchi Posted November 16, 2015 Share Posted November 16, 2015 SQ Advisors (Lou Simpson) have made AME their n.1 position in Q3 2015. https://twitter.com/Find_Me_Value/status/666266497266782209 I like the business very much and Mr. Hermance seems to have an outstanding track record of both organic growth and growth through strategic acquisitions. AME’s debt load is very low compared to other companies that grow both organically and inorganically, which I like. In attachment you may find the Q3 2015 financial factsheet. And here is a link to an article about Mr. Hermance: http://www.ey.com/US/en/Newsroom/News-releases/News-EY-US-EOY-2014-Frank-Hermance-AMETEK-Inc-National-Distribution-Manufacturing-Award-Winner Has anybody been following AME for some time? Any thought? Cheers, Gio AME_Q3-15.pdf Link to comment Share on other sites More sharing options...
marazul Posted November 16, 2015 Share Posted November 16, 2015 Do you have any idea what % of revenues/op. income comes from maintenance/aftermarket vs. sales of new machines, etc? Link to comment Share on other sites More sharing options...
giofranchi Posted November 16, 2015 Author Share Posted November 16, 2015 Do you have any idea what % of revenues/op. income comes from maintenance/aftermarket vs. sales of new machines, etc? No... Sorry! I have just started digging... Maybe someone else on the board already knows this company well! ;) Cheers, Gio Link to comment Share on other sites More sharing options...
Guest neiljgsingh Posted November 16, 2015 Share Posted November 16, 2015 Do you have any idea what % of revenues/op. income comes from maintenance/aftermarket vs. sales of new machines, etc? A quick scan of the most recent 10-Q leads me to believe they don't break that out. The MD&A breaks down revenues over their two main operating segments, but that's it. Link to comment Share on other sites More sharing options...
Liberty Posted November 16, 2015 Share Posted November 16, 2015 Looked at it a couple years ago. It's an interesting business. At the time I was also looking at TDG, TDY, PCP, DHR, CFX, FAST, etc... Link to comment Share on other sites More sharing options...
KCLarkin Posted November 16, 2015 Share Posted November 16, 2015 Looked at it a couple years ago. It's an interesting business. At the time I was also looking at TDG, TDY, PCP, DHR, CFX, FAST, etc... The interesting question is why is he buying it now? It looks expensive relative to recent history. Link to comment Share on other sites More sharing options...
giofranchi Posted November 17, 2015 Author Share Posted November 17, 2015 The interesting question is why is he buying it now? It looks expensive relative to recent history. It seems Lou Simpson is recently buying large positions in companies that are "Strong Sell"... ::) Look at the presentation at the following link: https://drive.google.com/file/d/0Bzm9JT6Xfru3Y0FPb0liY3VfTDQ/view Cheers, Gio Link to comment Share on other sites More sharing options...
KCLarkin Posted November 17, 2015 Share Posted November 17, 2015 He is buying acquisitive companies and these are favorite targets of short sellers. Which is one good reason to be disciplined on the price you pay. Link to comment Share on other sites More sharing options...
giofranchi Posted November 17, 2015 Author Share Posted November 17, 2015 He is buying acquisitive companies and these are favorite targets of short sellers. Which is one good reason to be disciplined on the price you pay. On the other hand, those companies, if they are not frauds, tend to sell for an high multiple of EPS most of the time. Therefore, if you are not willing to pay up for quality, you might not be able to invest in them. I think a portfolio of 15-20 owner/operators that grow both organically and through acquisitions will do fine even if you are willing to pay up (still being conscientious about price, of course!), and despite short sellers. If one of those 15-20 companies becomes the target of short sellers, then I’ll simply sell it! And replace it with another one I like (almost) as much. ;) Cheers, Gio Link to comment Share on other sites More sharing options...
writser Posted November 17, 2015 Share Posted November 17, 2015 If one of those 15-20 companies becomes the target of short sellers, then I’ll simply sell it! And replace it with another one I like (almost) as much. ;) Excellent strategy. Buy Valeant at $200, spam the topic with praise for the CEO for a few months, sell at $80 during a bear raid and buy the next compounding owner operator with an 'entrepreneurial spirit'. Rinse and repeat with Lancashire, Biglari Holdings, Constellation Software and every other expensive stock where the CEO has spun a nice story. Link to comment Share on other sites More sharing options...
giofranchi Posted November 17, 2015 Author Share Posted November 17, 2015 Excellent strategy. A basket of owner-operators (focusing not only on the quality of management, but also on the quality of the businesses they own)? Not my idea! Ask Murray Stahl! ;) Buy Valeant at $200, spam the topic with praise for the CEO for a few months, sell at $80 during a bear raid Well, Valeant was the very first company I had invested in that was accused of fraud… I admit I didn’t know what to think nor how to react promptly. Lesson learnt. Rinse and repeat with Lancashire, Biglari Holdings, Constellation Software and every other expensive stock where the CEO has spun a nice story. Even if some turn out to be poorer businesses than I had thought, if the remaining 10-15 perform well, results could be satisfactory indeed! I look for quality and I am willing to pay up (to a certain extent) when I think I have found it (again, don't ask me: ask Mr. Munger!). Then of course I might be wrong. And if I am wrong, I change my mind. As always, instead of being sarcastic and criticizing the ideas of others, you should present to all board members your ideas… Gio Link to comment Share on other sites More sharing options...
petec Posted November 17, 2015 Share Posted November 17, 2015 As always, instead of being sarcastic and criticizing the ideas of others, you should present to all board members your ideas… +1 Link to comment Share on other sites More sharing options...
KCLarkin Posted November 17, 2015 Share Posted November 17, 2015 Let's stay on topic please. The question I am asking: why is Lou buying this NOW. He might just be buying a good business at a fair price. Or it might be like Schwab, where there is substantial value not currently seen in the financials. Link to comment Share on other sites More sharing options...
karthikpm Posted November 18, 2015 Share Posted November 18, 2015 I wonder if he switched out PCP for AME Link to comment Share on other sites More sharing options...
KCLarkin Posted November 18, 2015 Share Posted November 18, 2015 I wonder if he switched out PCP for AME Makes sense. Link to comment Share on other sites More sharing options...
james22 Posted December 22, 2015 Share Posted December 22, 2015 http://brooklyninvestor.blogspot.de/2015/12/ametek-inc-ame.html Link to comment Share on other sites More sharing options...
LongHaul Posted December 23, 2015 Share Posted December 23, 2015 I have done some work AME Positives: Generally the businesses are good. I like a lot of them. Negatives: However - I think the CEO is a deal guy and BS artist that has jacked up prices and gutted the company of growth expenses. This is why organic growth has likely stalled. Go read glass door and the annual letter of the company. Pass for me. Link to comment Share on other sites More sharing options...
AzCactus Posted January 11, 2016 Share Posted January 11, 2016 Anyone giving this another look at these prices? Link to comment Share on other sites More sharing options...
Guest neiljgsingh Posted January 21, 2016 Share Posted January 21, 2016 Believe it or not, I'm meeting with Lou Simpson tomorrow. Cold calls do work sometimes, folks. Will try to see if he's open to talking about it. Link to comment Share on other sites More sharing options...
fareastwarriors Posted January 21, 2016 Share Posted January 21, 2016 Believe it or not, I'm meeting with Lou Simpson tomorrow. Cold calls do work sometimes, folks. Will try to see if he's open to talking about it. Awesome! Please post notes if you could. Good luck. Link to comment Share on other sites More sharing options...
Guest neiljgsingh Posted January 21, 2016 Share Posted January 21, 2016 Believe it or not, I'm meeting with Lou Simpson tomorrow. Cold calls do work sometimes, folks. Will try to see if he's open to talking about it. Awesome! Please post notes if you could. Good luck. Will definitely do. Thanks! Link to comment Share on other sites More sharing options...
100 Shares Posted January 21, 2016 Share Posted January 21, 2016 Believe it or not, I'm meeting with Lou Simpson tomorrow. Cold calls do work sometimes, folks. Will try to see if he's open to talking about it. Awesome! Please post notes if you could. Good luck. Will definitely do. Thanks! What else do you plan on discussing with him? Link to comment Share on other sites More sharing options...
longtermdave Posted January 22, 2016 Share Posted January 22, 2016 Believe it or not, I'm meeting with Lou Simpson tomorrow. Cold calls do work sometimes, folks. Will try to see if he's open to talking about it. Awesome! Please post notes if you could. Good luck. Will definitely do. Thanks! Was Lou willing to discuss this idea? Link to comment Share on other sites More sharing options...
Guest neiljgsingh Posted January 22, 2016 Share Posted January 22, 2016 Believe it or not, I'm meeting with Lou Simpson tomorrow. Cold calls do work sometimes, folks. Will try to see if he's open to talking about it. Awesome! Please post notes if you could. Good luck. Will definitely do. Thanks! Was Lou willing to discuss this idea? We didn't discuss AME. Frankly, I was constrained for time (only had 30 minutes with him) and thought it'd be more valuable to talk about his career/investing more generally/advice for a novice like me entering the banking world rather than discuss specific names. But he said his portfolio is roughly the same as what it was in the last 13-F filing (I imagine the only real change is PCP, which he had mostly sold out of by then anyway). So it's probably still a high-conviction idea for him. He was quite optimistic about the markets and his portfolio overall. Link to comment Share on other sites More sharing options...
Liberty Posted January 22, 2016 Share Posted January 22, 2016 Thanks for sharing, must've been an interesting conversation! Anything else you can share is appreciated. Cheers. Link to comment Share on other sites More sharing options...
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