Very likely the turnaround will take more time than investors
may have originally expected. Probably, overall, investor expectations
were too optimistic, and bound up in buyout rumors, all things considered.
The primary weakness of this company is in their merchandising.
Merchandising is what got this company into trouble two years
ago (one has to go back probably three years) an it will probably
also take a good two years to effect a turnaround.
Despite the low stock price, BBA is a sizeable operation. This size
will retard rapid turnaround but it will also resist collapse.
Furthermore, if and when the right merchandising formula is
accomplished, this size will translate into powerful momentum
and a serious stock price following.
The new President is primarily a merchant and has taken the
role of COO. Not hearing much from her, imho is a good thing.
Let Ms. Mehrlander concentrate on her core concerns. By the way,
to see something of what she is about, take a look at her
"Letter to Shareholders" in the 1997 Annual. Imo, from an
operational point of view, it is a very crisp statement of
future plans with a very clear message of action oriented
undertakings.
So, for those of you who bought recently (say within the last
six months), at this point, a sharp runup will occur only if
there is a buyout or merger announcement. I see this as unlikely.
On the other hand, for those who are patient, I would advise a
planning horizon of about two more years before the outcome
will be definitive.
Ed Perry |
