SVU - SuperValu Inc.

[PlanMaestro]

Interesting Cardboard. The remaining pieces must be interesting for strategic bidders willing to pay a higher multiple. Looks like Cerberus is happy too.

 

http://online.wsj.com/article/SB10001424127887324581504578233411904827872.html

 

An investment group led by Cerberus Capital Management LP may have landed a plum in its $3.3 billion deal to buy 877 grocery stores: real estate worth at least as much as the group paid.

 

Roughly half of the stores the group is buying from Supervalu Inc. SVU +1.73% —under the Albertsons, Jewel-Osco, Acme and Shaw’s brands—are either company-owned or subject to ground leases, people familiar with the deal said. Ground leases are long-term deals that let tenants develop and make improvements to land, as if they were the owner.

 

At an estimated value of at least $150 to $200 per square foot, those properties could be worth a total of between $3.3 billion and $4.4 billion.

 

[…]

 

Joining Cerberus in the deal were publicly traded Kimco Realty Corp., KIM -0.05% along with Chicago’s Klaff Realty LP, Philadelphia’s Lubert-Adler Partners LP and Schottenstein Real Estate Group, of Columbus, Ohio.

 

In 2006, those firms joined Cerberus to acquire 650 underperforming Albertsons stores, paying about $1.1 billion as part of a larger deal to dismantle the grocery chain. The group sold off some stores, closed others and boosted profits at those it kept.

 

In August, a Kimco executive said the firm had so far made five times its money on the deal. The other partners have fared similarly well, people familiar with the matter have said.

 

Kimco, which owns stakes in 922 shopping centers in North and South America, sees the latest Albertsons deal as another moneymaker.

 

“Even though we recognize that the benefit here is primarily improving the overall operations of the business, we’re comfortable with the fact that the real-estate value we have, at a minimum, supports the purchase price,” said Mike Pappagallo, Kimco’s chief operating officer.

 

 

 

 

 

[OracleofCarolina]

One of the grocery store chains in North Carolina up for sale?

http://www.charlotteobserver.com/2013/02/12/3850754/report-harris-teeter-considering.html

 

[CONeal]

One of the grocery store chains in North Carolina up for sale?

http://www.charlotteobserver.com/2013/02/12/3850754/report-harris-teeter-considering.html

 

That sucks!!!  I love the Teeter.

[Cardboard]

http://m.yahoo.com/w/legobpengine/finance/news/symphony-investors-llc-extends-tender-015900000.html?.intl=us&.lang=en-us

 

Any idea why they are extending the tender offer? Which condition has not been filled?

 

Cardboard

[DTEJD1997]

Hey all:

 

Anybody else invested in or looking at SVU?

 

I am!

 

In fact, I've bought a few shares as a starter position.  Of course, it promptly went down further, and now has almost come back to what I paid.

 

I still think it is cheap, especially if they spin off the Sav-A-Lot division.  I've been to a few of their locations...

 

If there is any interest in this at all...I'll share my much more detailed thoughts & impressions.

 

Any takers?

[dorsiacapital]

Hey all:

 

Anybody else invested in or looking at SVU?

 

I am!

 

In fact, I've bought a few shares as a starter position.  Of course, it promptly went down further, and now has almost come back to what I paid.

 

I still think it is cheap, especially if they spin off the Sav-A-Lot division.  I've been to a few of their locations...

 

If there is any interest in this at all...I'll share my much more detailed thoughts & impressions.

 

Any takers?

 

I'm a taker. I love the spinoffs!

[Broeb22]

Also interested!

[Sunrider]

Ditto

[DTEJD1997]

Hey all:

 

OK, I see there is some interest in SuperValu.  I will post my thoughts on it very soon.

 

What I will do is to make two postings. 

 

The first will be my "boots on the ground" impressions of their stores in SE Michigan and the metro Detroit area.

 

I will then make a second posting about financials, valuation, and the potential spin-off.

 

I will do the first posting within 48 hours.

[DTEJD1997]

Hey all:

 

Here is my first posting.  I detail my thoughts upon visiting Sav-A-Lot locations in the Detroit area and how they compare to their main competitor, Aldi. 

 

I've actually been shopping at a couple of diofferent Sav-A-Lot stores and have some impressions that I'll share with the board.

 

I usually shop at Costco, Trader Joes and local produce markets...

 

The Sav-A-Lot store(s) are located in suburbs of Detroit, solid working class communities.  One is located in kind of a weird spot, within 200 yards of a Kroger store.  I would not call it a secluded location, but it is kind of in an out of the way spot.  You can see it from the main road, but you've got to be looking for it. 

 

Another location I've been to is on the famed "8 Mile" road.  While it is not in Detroit, it is across the street from Detroit and in a semi-rough area.  It is a "C" grade location.  It shares a strip mall with an abandoned Sizzler steak house and a vacant nail salon.  There is plenty of traffic driving by, but this is simply not a "good" location.  On the Detroit side of the road is a lower end strip club and liquor store...Perhaps they are getting a very big discount rate on rent.  They certainly would seem to have the upper hand on whoever owns the property.  This location was a company owned location.

 

Other Sav-A-Lots have not been far from here.

 

All the locations I've been to have been company owned. 

 

Other than the one location located near a super Kroger, all the Sav--Lots have been in former full service grocery locations.  Presumably, they are getting great deals on the leases.

 

Another impression that I got was that Sav-A-Lot is going into locations that had failed full service grocery stores.  I presume that SVU is getting great deals on the leases.  I would guess that Aldi has somewhat better site selection and a stronger real estate development team.  Perhaps with limited service and the strength of SVU, they might be to make a go of it. 

 

The Aldi's I've been to have generally been in "B" grade locations.  Generally better than Sav-A-Lot locations.  There are some Aldi's in Detroit proper, and I imagine that they are in "A" grade locations, as much as that is possible in Detroit.

 

Another possibility is that Sav-A-Lot might be able to operate where other "full service" stores are not able to.

 

There is perhaps more risk to Sav-A-Lot here but maybe more financial reward....perhaps the edge goes slightly to Sav-A-Lot.

 

The Sav-A-Lot stores were "medium" sized.  Larger than a typical Aldi store, but smaller than a large Kroger or a SuperStore.  Hard to say who has the advantage on real estate.  As I have visited more Sav-A-Lot locations, they seem to be in some "rougher" neighborhoods.  In fact, there are some locations in VERY rough Detroit locations.  Certain consumers WILL NOT visit these locations under ANY circumstances.  HOWEVER, there is a dearth of supermarkets in Detroit.  So they are serving an underserved population.  I suspect that these locations might be franchised.  Years ago, there were virtually NO national grocery store chains in Detroit.  The few stores were all independently owned.  These independent grocers were usually affiliated with Spartan (SPTN) and had extremely dodgy quality & prices.  There are still a good percentage of these type of stores left in Detroit...BUT Sav-A-Lot has been making inroads against SPTN served stores.  I suspect that the Detroit inner city stores are franchised.

 

The shopping carts are not on the quarter deposit basis.  So there are several wandering loose in the parking lot.  Definite advantage goes to Aldi here.

 

The 1st Sav-A-Lot store was relatively clean, but could have been a bit better.  The others were slightly cleaner yet.  The cleanliness of the Sav-A-Lot stores is somewhat surprising.  They are MOST certainly cleaner than independent stores.  Most Aldi's that I've been to are relatively clean, but not spotlessly so.  The advantage goes to Sav-A-Lot.

 

There are a good amount of store brands, but they have seem to have more "special buys" and outside brands than the typical Aldi has.  One thing I've noticed is that some of the Save-A-Lot stores only have Pepsi, and no Coke.  I don't know if this a stock out or a corporate mistake.  Advantage goes to Sav-A-Lot.

 

It seems to me that Aldi has three levels of in store brands, good, better, best.  I was not able to discern if Sav-A-Lot has this level of segmentation of their store brands.  Sav-A-Lot also seems to have a much more disparate assortment of house brands.  Thus it is harder to discern what is higher end or lower end.  Aldi seems to have a much clearer delineation of their brand's hierarchy.  Advantage goes to Aldi.

 

The fresh produce section was laughable.  The quality looked OK, but the selection was almost nothing.  Aldi also has a very small produce section, with everything wrapped up.  I buy my produce elsewhere.  Neither store does well with produce.  Call it a draw.

 

One thing that Aldi has over Sav-A-Lot is "special deal" merchandise.  They will have primarily kitchen wares, but also household items, even computers at special prices.  I am unsure how this works for Aldi....How many people come to the grocery store and walk out with a computer?  I think this is probably a distraction for management, so I'll give the advantage to Sav-A-Lot here.

 

The meat section was actually pretty broad, and looked pretty fresh.  Good prices.  They seemed to have a decent amount of food catering to both the Mexican & Black community.  I think they may even have a meat cutter/butcher in the back of the store.  It looks like most of the meat might be cut/wrapped at the store.  Aldi brings all of it's meat in from a central location.  If Sav-A-Lot can do enough volume of meat sales, they might have the edge here.  If not, Aldi does.

 

There was a small Hispanic food section with a limited selection of "big" brands.  Prices were OK, but were obviously lower in specialty stores in Mexicantown.  This might be a way to differentiate from Aldi/competitors.  Have a wider selection of ethnic foods.  Advantage goes to Sav-A-Lot

 

The frozen food section had many brands in it.  It had a limited selection of house brands.  Certainly nowhere near as developed as Aldi.  The quality does not look as good as Aldi, but I can't say that for sure.  Sav-A-Lot could work on this a bit.  With the muscle behind their distribution, they should easily be able to do this.  Advantage goes to Aldi.

 

Sav-A-Lot will give you a free shopping bag.  I am unsure if every client gets one free one OR if you have to pay for everyone after the first.  Advantage goes to Sav-A-Lot

 

FINAL THOUGHTS:

 

At frist, I thought Aldi is going to crush these guys...but maybe not.  Sav-A-Lot clearly is not as smoothly run as Aldi is, but they do seem to have a workable model.  They are in locations where Aldi is not, they are also franchised.  Clearly, Aldi is a better managed operation, but with some more refinement & execution I think Sav-A-lot could give Aldi a run for their money.  I also strongly suspect that if Sav-A-Lot is making money NOW, and incremental improvements they make to the business model will result in nice incremental earnings...

 

I would suggest that if you have the chance and are interested, check out a Sav-A-Lot near you and see what is going on.

 

 

[DTEJD1997]

Hey all:

 

My apologies for not posting my more detailed financial analysis sooner.

 

I am getting close to be doing on it, but have to update for the latest quarterly earnings & CC.

 

One of the problems is that the more work I do, the more thoughts I have.  Then the CC comes out & everything needs to be updated...

 

I should have it done within a week and will be posting it here on the corner.

 

 

[Aman1]

Hi DTEJD1997,

 

Any thoughts on the mooted spin-off?

 

http://www.theproducenews.com/the-produce-news-today-s-headlines/18824-supervalu-one-step-closer-to-save-a-lot-spin-off

[wjsco]

interesting press release yesterday....exploring potential sale of Save-a-Lot...I think that's even better than a spin.

 

Ex-SaveALot, they generated $550m ebitda in fy2016. If they sell SaL for $1.5b, which is fairly conservative ball (~6.5x EBITDA), and use their capital loss carry forward (and don't pay taxes on sales price), they're left with $750m in debt. 1300 mc + 750 debt = $2b EV.

 

550 in ebitda, 200 D&A, 65 interest - if they cut their debt from 2.25 to .75, interest expense gets cut from 190 to 65 or so, before they re-finance at lower rates. So, 285 in taxable income, at 35% tax = $100m in taxes.

 

Capex is maybe 150 ex-SaL, and potentially lower...quick back of envelope, i think they had 275 in capex last year or something, and SaL accounted for 115-120 of that.

 

550 ebitda, 65 interest, 100 taxes, 150 capex=$235m in FCF. So, 18% FCF yield on current market cap, before any debt re-financing or anything like that. And, Debt:EBITDA would drop from >4x to maybe 1.5x.

 

So, at current share price, 750 in debt...just over $2b EV, 550 ebitda -> trading under 4x ; if they de-leverage with SaL sale, it should get a higher multiple. If it moves from <4x to 5x, equity value increases from $1.3b to $1.85b, or +40%. And it would still have >10% FCF yield. And it would still only be trading at 5x ev/ebitda, and about 10x net income.

 

So, 40% upside just moving their ev/ebitda to 5x, and retain a residual >10% fcf yield. The other thing, though, is that they won't have their shareholder return covenants associated with their debt, which means they'll be able to return money to shareholders. So, who knows, maybe they implement a dividend or sbb. That would be beneficial for the stock, too

 

Not to mention, since the new CEO came in, they added Marsh's, as well as 20 other stores they just acquired (but want to divest to their wholesale customers). So I think they're close to adding ~100 stores in first 6 months of his tenure? That's not bad

[mateo999]

interesting press release yesterday....exploring potential sale of Save-a-Lot...I think that's even better than a spin.

 

Ex-SaveALot, they generated $550m ebitda in fy2016. If they sell SaL for $1.5b, which is fairly conservative ball (~6.5x EBITDA), and use their capital loss carry forward (and don't pay taxes on sales price), they're left with $750m in debt. 1300 mc + 750 debt = $2b EV.

 

550 in ebitda, 200 D&A, 65 interest - if they cut their debt from 2.25 to .75, interest expense gets cut from 190 to 65 or so, before they re-finance at lower rates. So, 285 in taxable income, at 35% tax = $100m in taxes.

 

Capex is maybe 150 ex-SaL, and potentially lower...quick back of envelope, i think they had 275 in capex last year or something, and SaL accounted for 115-120 of that.

 

550 ebitda, 65 interest, 100 taxes, 150 capex=$235m in FCF. So, 18% FCF yield on current market cap, before any debt re-financing or anything like that. And, Debt:EBITDA would drop from >4x to maybe 1.5x.

 

So, at current share price, 750 in debt...just over $2b EV, 550 ebitda -> trading under 4x ; if they de-leverage with SaL sale, it should get a higher multiple. If it moves from <4x to 5x, equity value increases from $1.3b to $1.85b, or +40%. And it would still have >10% FCF yield. And it would still only be trading at 5x ev/ebitda, and about 10x net income.

 

So, 40% upside just moving their ev/ebitda to 5x, and retain a residual >10% fcf yield. The other thing, though, is that they won't have their shareholder return covenants associated with their debt, which means they'll be able to return money to shareholders. So, who knows, maybe they implement a dividend or sbb. That would be beneficial for the stock, too

 

Not to mention, since the new CEO came in, they added Marsh's, as well as 20 other stores they just acquired (but want to divest to their wholesale customers). So I think they're close to adding ~100 stores in first 6 months of his tenure? That's not bad

 

I generally agree that shares look cheap.  But stock just generally keeps drifting lower on uninspiring results.  By the way, using the updated form 10, I get SAL LTM EBITDA of $207mm and has been on a downward trend.  I think your 1.5B and 6.5x figures imply $230mm in EBITDA.    I figure shares are probably worth something like $6.75-7.00 on a SOTP basis.

[fareastwarriors]

Supervalu to Sell Save-A-Lot Chain to Onex for $1.37 Billion

 

 

http://www.bloomberg.com/news/articles/2016-10-17/supervalu-to-sell-save-a-lot-to-onex-for-1-37-billion-in-cash

[DTEJD1997]

Hey all:

 

I've sold MOST of my position in SVU, but still have a small amount of shares remaining.

 

This morning they reported surprisingly strong earnings and have expanded margins somewhat.  SSS at retail are down a dismal 5%+. 

 

HOWEVER, the stock spiked up over 10%.

 

What is interesting is that the stock is becoming de-levered with the sale of Sav-A-Lot.  A lot of the proceeds from that sale were applied to paying down the debt and strengthening the pension.

 

Finally, they bought a west coast wholesale distributor, expanding their geographic reach.  Looks like they got it for a fair price.  With the new CEO, there is simply no question that they are going to grow/emphasize their wholesale operations.

 

Of all the de-levering situations I've seen lately, I think that SVU could be one of the best...

 

Any thoughts?  Anybody still following this?

[solobz]

I still like the credit and might take a closer look at the equity if I get a chance... for those with a similar boring risk appetite, the 2022 ytw @~6.9% isn't awful imo..all coupon. callable in 2018, looks money good. would love to add on a market dislocation

[compoundvalue]

Copying from the what are you buying today thread...

 

Supervalu. (It'll be awesome if it lives up to its name)

 

Do you have a link to a thesis or anything like that ?!

There's a write-up on VIC that sums up the thesis pretty well. It's a classic bad biz/good biz story with a bunch of noise in the numbers.

 

It's mostly known as a retailer, but the new CEO is a wholesaler with extensive M&A experience, and the biz is increasingly becoming a pureplay wholesaler (thus setting itself up for multiple expansion). The major event was selling most of the retail biz last yeah to delever, but they still have some 200 company owned retail stores that I expect them to get rid of.

 

They also own some 16 distribution centers (RE value in a retail play - where have we heard that before!) post their last acquisition where they'll have a bunch of sale-leaseback options.

 

So basically, it seems like we have a quiet competent CEO in his best years where the market might not appreciate how the biz is transforming.

 

There's always integration risks, but experience is a huge plus, and in wholesale distribution I think it's pretty straightforward. It's trading at around 4 times this years Ebitda guidance or around 6-7 times wholesale Ebitda, but wholesale should grow nicely with their latest acquisition and customers wins (grew some 12 pct. last quarter) and then you have a bunch of value unlocking options.

 

Sometimes it can take ages for management to unlock value, but the CEO seems pretty intent on pulling the right levers. While retail isn't popular right now, privately negotiated asset prices seems priced to perfection most places, so I'd prefer if he acted swiftly before an eventual downturn.

 

 

 

Couldn't find the VIC write up can anyone share a link maybe?

After looking into it, I think the market totally misunderstands the company and the transformation strategy punishing SVU with a distressed retail operation multiple. Sale of Save-A-Lot and purchase of Unified Grocers ads a bit to the confusion which is why the opportunity probably exists. EBITDA run rate of ~$515m post Unified Grocers transaction, net debt should be less than $2bn post transaction including pension obligations capital leases and what not. EBITDA should be growing even without a turnaround/divestiture of the retail business, reasonable leverage. Potential catalysts: additional deleveraging (same TEV lower net debt), sale of the losing retail business, continued growth (and as a result multiple expansion) improved capital efficiency by a sale and leaseback of logistic centers and/or disposal of the retail business (and as a result multiple expansion). Downside on the other hand seems to be limited, even if they stop growing, debt levels are manageable and plenty of time to respond. The margin of safety seems adequate. 

Interesting situation, management seems competent and honest.  all told the stock seems to be too cheap....

Thanks for the idea kab60!

[DTEJD1997]

Copying from the what are you buying today thread...

 

Supervalu. (It'll be awesome if it lives up to its name)

 

Do you have a link to a thesis or anything like that ?!

There's a write-up on VIC that sums up the thesis pretty well. It's a classic bad biz/good biz story with a bunch of noise in the numbers.

 

It's mostly known as a retailer, but the new CEO is a wholesaler with extensive M&A experience, and the biz is increasingly becoming a pureplay wholesaler (thus setting itself up for multiple expansion). The major event was selling most of the retail biz last yeah to delever, but they still have some 200 company owned retail stores that I expect them to get rid of.

 

They also own some 16 distribution centers (RE value in a retail play - where have we heard that before!) post their last acquisition where they'll have a bunch of sale-leaseback options.

 

So basically, it seems like we have a quiet competent CEO in his best years where the market might not appreciate how the biz is transforming.

 

There's always integration risks, but experience is a huge plus, and in wholesale distribution I think it's pretty straightforward. It's trading at around 4 times this years Ebitda guidance or around 6-7 times wholesale Ebitda, but wholesale should grow nicely with their latest acquisition and customers wins (grew some 12 pct. last quarter) and then you have a bunch of value unlocking options.

 

Sometimes it can take ages for management to unlock value, but the CEO seems pretty intent on pulling the right levers. While retail isn't popular right now, privately negotiated asset prices seems priced to perfection most places, so I'd prefer if he acted swiftly before an eventual downturn.

 

 

 

Couldn't find the VIC write up can anyone share a link maybe?

After looking into it, I think the market totally misunderstands the company and the transformation strategy punishing SVU with a distressed retail operation multiple. Sale of Save-A-Lot and purchase of Unified Grocers ads a bit to the confusion which is why the opportunity probably exists. EBITDA run rate of ~$515m post Unified Grocers transaction, net debt should be less than $2bn post transaction including pension obligations capital leases and what not. EBITDA should be growing even without a turnaround/divestiture of the retail business, reasonable leverage. Potential catalysts: additional deleveraging (same TEV lower net debt), sale of the losing retail business, continued growth (and as a result multiple expansion) improved capital efficiency by a sale and leaseback of logistic centers and/or disposal of the retail business (and as a result multiple expansion). Downside on the other hand seems to be limited, even if they stop growing, debt levels are manageable and plenty of time to respond. The margin of safety seems adequate. 

Interesting situation, management seems competent and honest.  all told the stock seems to be too cheap....

Thanks for the idea kab60!

 

May I add that I think that SVU has simply fallen off the radar scopes of 98% of potential investors & funds.  They simply don't know/care.  Additionally, these dudes are in the "grocery" business which of course is going to the interwebs & AMZN.  Grocery along with retail is currently despised.  Add to that, the years of losses & capital incineration by previous management and SVU simply gets no attention.

 

The VIC article brought up a few interesting points. 

 

A). There is probably more value in various pieces of real estate that SVU owns than anybody gives them credit for.  It could easily be the current market cap. of the company!  The analysis postulates that some of this value will be realized quicker than anybody gives them credit for.  SVU should be able to do some consolidation of warehouses on the west coast.

 

"Unified leases a full distribution center in Seattle and owns a DC in Portland, while SVU owns a similar waterfront facility in Tacoma.  Given that these three locations are within 150 miles of one another, we believe SVU will eventually sell the Tacoma and Portland DCs, and let the lease expire for the Seattle DC, shifting distribution to other Company-owned facilities.  This should generate approximately $90 million in proceeds, and result in a $9 million EBIT benefit"

 

If this comes to pass, SVU will be able to pay down debt nicely, and get a nice shot of EBIT going forward!

 

The poster further postulates that a very large portion of the retail operation could be sold in the upcoming year(s).  This would further reduce the debt.

 

I personally would like to see them reduce their retail footprint by 75%+ if they can get a decent price for it.  I think it would be prudent to keep a small portion of retail to use as a test center.

 

Finally, there is a good chance the company could be sold once it is pared down & cleaned up.

 

I still have a small position and will be watching closely to expand it...

[kab60]

I think the VIC writeup is too optimistic, and one of the parts is re the north west distribution centers. I also think there's downside risk to the retail side if it really turns to shit and they're stuck with a bunch of leases for unprofitable stores. That said, I still very much like the odds.

Here's VIC writeup: https://www.valueinvestorsclub.com/idea/SUPERVALU_INC/140737

 

Here's from the latest call re DC:

So, Mark, from a timing standpoint, when do you think that the Pacific Northwest supply chain gets restructured? Is that really a 2018 story? And then when you think about the capacity you're going to want for incremental business up there, so how do you think about building enough capacity? And I know you have too much now but you obviously don't want to have too little.

 

Mark Gross - SUPERVALU, Inc.

 

Yeah. Great point, John. I think our overwhelming goal will never be to have to whittle in and to make sure we have the capacity to meet the business that people want to do with us. The situation as we've described in the Pacific Northwest is there are three facilities up there. To greater serve our customers there, you are presumably looking at construction of a new facility, and we're designing and we're looking at work to see what that looks like. We haven't come to a final design plan. So if you just think of the time that it takes to build – to design, permit, build you are late 2018, 2019 before you would have something fully in place there. But, in the meantime, we continue to work with and meet the desires of those customers up there to do more business with us.

 

John Heinbockel - Guggenheim Securities LLC

 

So you could easily just extend – their lease expires, I think, in April. You could just extend that for a year until the new facility is ready. Is that fair?

 

Mark Gross - SUPERVALU, Inc.

 

Yeah. There are multiple solutions up there. We have our facility in Tacoma as well.

 

John Heinbockel - Guggenheim Securities LLC

 

Right.

 

Mark Gross - SUPERVALU, Inc.

 

That has excess capacity. You can move some volume. You can bring volume down to Portland, put more volume there, which would free up space. You can extend the lease. There's a multiple ways to come at this, and we'll figure out what's best for the shareholders, what's best for the customers, and implement it.

[Sullivcd]

This one seems pretty cheap to me, bought some today. Around 15% ev/ebit yield with a few really simples levers to pull to push that yield significantly higher. While doing my research I noticed the share count post reverse split hasn't been reconciled per last quarter's filing. I wonder if that is contributing to share price weakness. Of course I wonder if I'm missing something obvious.

[kab60]

Results out, looks okay, pretty much as expected. Announced another acquisition, this time in Florida. Seems to make sense, but with the stock around these levels it would probably be wiser with a buyback. Oh well, didn't expect this to be the new Teledyne and they're doing the right things. Really looking forward to them selling the last retail ops.

[Williams406]

If only you could figure out how to get a buck for every time you could say "that CEO is no Henry Singleton"... I'd like to see buybacks here as well.

[valuedontlie]

Market not loving the fact that they are re-levering to do all this M&A + the TSA wind down will really hurt to the tune of $87.5m in lost EBITDA starting FY19...

 

Capex situation seems high too... Balance sheet is moving back in the wrong direction...

 

They have a lot of levers to pull and they need to start pulling them (selling all/most retail operations and some sale-leaseback transactions)...

 

 

[kab60]

Agreed. I don't like them re-levering considering where we probably are in the cycle. I trust management that these are smart buys, but now is the time to be a seller. Capex has been elevated but they also bought a DC in the summer. Maintenance should be some 90m according to guidance.