SVU
I noticed Paul's post below, wherein he noted he was adding to his position.
Looking through the fundamentals though, I have a couple of comments on it, and the analysts' forecasts.
- Although the 2009 impairment does not appear to dump "other" costs into the write-down in the 10K disclosure, the simple fact that the writedown is required so shortly after the acquisition demonstrates the amount of money the company has wasted on acquisitions in the past - what confidence do you have in the management going into the future? I realise that the CEO is new, but the rest of the team are not...
- What are the analysts basing their forecasts upon? Sales have fallen in the past year, and given the dispersion of the brands, what "value" or "durable advantage" do you see in which to invest? RoA is 2%, and not much higher on an adjusted basis for tangible assets.
- Is there any value on the balance sheet? Seems highly-levered and full of goodwill to me.
- $7bn of debt remaining, and $500m free cashflow generation per year on a conservative basis, looking back the past 3 years.
- Margins are around 1% - pretty cut-throat operating environment to contend with. I'm not convinced it is defensive, particularly with Tesco, Wal-Mart etc dominating the market. |
