Grommit, I've added more to my WNC position today.
I see in the latest edition of "Worth", p.97, that value investor Steven Romick of FPA Crescent, has picked WNC as a "stock to avoid". The article indicates that Mr. Romick believes WNC (now about 8), has a "fair value" of $5 and that WNC shows that it is making money because it is not writing down enough excess inventory and has let debt "soar from $145 million to 321 million." Really don't like seeing that analysis - it scares me because he does do excellent work and has a very respectable record both for his stock picks and, according to "Worth" for his previous pans in their magazine. He's chosen IBM in the same article at $122 and his "fair value" number for it is $75. And we have experienced a tremendous cleaving of IBM price recently.
I hate going up against guys like Romick. Nevertheless, I am betting that in 18 months, WNC will be at a higher price than it is now now. In addition to their "high tech" trailer business, they have Fruehauf, so sales and service of this brand are important contributors. (I point this out to thread readers who are are unfamiliar with Wabash.) There's some insider buying, debt/eq. is .71 , p/sales are low, stock price is near an 8 year low, price less than half of book value.
WNC stock could surely go lower. But I say we're right that the stock will recover from its current and depressed level.
Paul. |
