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Strategies & Market Trends : Value Investing
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To: Paul Senior who wrote (75453)4/22/2024 1:00:02 PM
From: E_K_S1 Recommendation

Recommended By
Harshu Vyas

  Read Replies (4) of 78435
 
If you are willing to wait 18-24 months on a 'real' turn around & restructure look at Leggett & Platt Inc (LEG).
(note to Harshu Vyas; this is a Value bet w/ huge potential returns but you must be willing to wait!)

I have been adding to my losing position but am confident by the end of 2025 this will be much higher (100% higher is my target).

They announced a restructure and $430 million write down in Q4 2023 for their Bed/mattress division. They will be closing at least 22 manufacturing facilities but will still have 32 to create better efficiencies. They will be updating their logistic & manufacturing process (incorporate AI and better order tracking) which will reduce expenses and increase margins.

It take time (almost 2 years) to be completely finished. The real estate from those close facilities will be sold in the 2nd half of 2025 at a significant gain but that will only off set the capital investment to update and reconfigure their 'new' manufacturing facilities.

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This is/was a dividend aristocrat too and w/ this huge restructure may rejuvenate this 'old' lady to be young and beautiful again. Their other divisions look good w/ growing FCF and ok margins especially their tech side of the business.

Some say this could be a value trap but I have seen enough of these restructures over my decades of investing that Leggett & Platt Inc (LEG) has a better than 50% chance to bring back significant value. I will take that bet but will be making more buys (in size) as we get closer to that 2025 finish date on this strategic restructure.
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