GM, I've been digging through WMAR. I won't comment on
how much longer the market may rise. I've been asking
that myself and you know how dreadfully depressing I am.
WMARs numbers and 10Q look fine to me. They been on the 'big'
buying spree, and that has hurt short-term profitability.
Primarily, it is the one-time cost of the acquisitions
(E&B Marine) coupled with the interest associated
with that acquisition. From their reports, "interest expense
increased to $867,000 in the first quarter of 1997 compared
to $292,000 in the first quarter of 1996" -- that's triple!
Still, the added value of E&B will pay for itself at some
point in time. Because of E&B's geography, WMAR has opened
itself to more 'seasonality' risk. But WMAR has sown up
this market so 'seasonality' doesn't bug me since they own
the whole market -- I don't suppose people will be giving
up their boats soon. I couldn't find out much about WMAR
in comparison to the international market. Would customers
here be buying stuff via mail-order through other worldwide
competitors?
Their ROE is a tad weaker than I like (9%), but their book
value is 42% of their stock price ($7.66, $18.13) so in a
worst case scenario, almost half your investment is covered
in an asset sense.
I might buy more, but also really watch how the E&B seasonality
affects WMARs stock price, and accumulate in the down periods.
Also, you have much more personal experience with WMAR that
means more than my 30 minute analysis. You seem to be happy
with them. What do your sailing friends say? Is there any
other meaningful competition? Competition worldwide? The lower
ROE may just be indicative of their market. If so, that
would be a 'dis'-incentive for other worldwide competitors
to make a real effort here. I think you may have a winner
in disguise.
'Motley Fool' doesn't seem to like them, but their reports
keep using phrases like 'growth' and 'sales increase' and
'owning their market' so I scratched my head on MF.
-MrB |
