FWIW, I bought MHK last week. Lengthy notes I made for myself follow. The final straw was telling myself, If Warren Buffett can buy their competitor, Shaw Industries, why can't I buy MHK after all the signals look good? Any comments would be appreciated.
Mohawk Industries is a producer of woven and tufted broadloom carpet and rugs for principally residential applications. The Company designs, manufactures and markets carpet and rugs in a broad range of colors, textures and patterns. The Company's brands include Mohawk, Aladdin, Mohawk Home, American Weavers, Bigelow, Custom Weave, Durkan, Galaxy, Harbinger, Helios, Horizon, Image, Karastan, Mohawk Commercial, Newmark Rug, World and WundaWeve.
Nov: Buying Dal-Tile for 50% cash, 50% stock. Will be immediately acreditive and make it bigger than Warren Buffet's Shaw Industries?
S&P: 5 Stars! On Platinum Portfolio and is a "1" in Value Line (Jan. 4)
GM: 25.2
NPM: 5.2
ROE: 21.2
EPS growth: 88% 5 yr. ave.!!
PE 16.3
PEG: .96 (vs. industry .84)
7 Brokers expect $3.36 in '01 and $3.75 in '02
LT Debt to Equity: .25
ROA, ROIC, ROE: better than industry
Revenue and NI per employee: better than industry
Using 11% growth, Quicken.com calculates:
"Intrinsic Value/Shr ($): 63.58
Current Price* ($): 54.19
By this calculation, MHK appears undervalued."
SSG was a buy up to $56 with a forecasted EPS growth of 11.7%, low price of $42, up/dwn of 3.7 to 1, 25-50-25 zone.
Quote from annual report: "By managing the details of our business, we've sharpened our focus on the big picture -delivering value. We've outpaced industry growth for the past decade."
Forbes "Best Companies" 2002
Fidelity is a big shareholder
Kris' Graham Value Calculation:
Company: MHK
Date: 1/25/02
Next year's expected earnings (ProjEPS): $3.33 (less than consensus)
Estimated 7-10 EPS growth rate: 11% (less than consensus)
P/E maximum if not 8.5: 10
Graham Fair Value: $73.15
Current Price: $54.19
Percent Growth to Fair Value: 34.98%
Quicken.com "One Click" is all positive. |
