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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (30279)	3/7/2008 3:33:53 PM
From: jayt	Respond to of 78704

Thanks Paul, that helps. It seems to me they are going to drain the cash out of it via special dividends. Supposedly it generates enough cash flow going forward, but 200+m of the 500 they are going to pay out was from tax loss gains. That will not be repeated. Seems that management would rather drain it of it's cash and let it go bankrupt in the future (if that happens).....then to sell out to a larger operator for a modest premium in the present. The way it's trading this seems to be the belief of those involved. RGRDS - JT

To: Paul Senior who wrote (30279)	3/8/2008 1:21:02 AM
From: Spekulatius	Respond to of 78704

AWI - I bought a starter today. I was watching the stock for a while because i see opportunity in companies emerging from bankrupties. i very much like what I see - the company has performed well in a difficult environment. After the dividend is paid, AWI will have cash of 250M$ and LT debt of 385M$. Tangible book will be 1.5B$ /26$share. Pension fund assets exceeds postretirement and pension liabilities by 200M$. Looking back when they operated under Chapter eleven, AWI generated about 70-100M$/quarter in free cash flow - oif course this was without paying interest at this time. They are projecting 175-200M$ FCF. Taking the 175M$, this is more than 3$/share for Y2008. The management does not promote the stock, but in my opinion the quarterly presentations are concise and no-nonsense. They have exceeded the projections every quarter since they emerged from bankruptcy. I do not know why they did not managed to get bought out but I suspect that the bankruptcy trust which owns 68% of AWI's shares has more to do with it then management. A potential buyer most likely will talk to the trust when they want to purchase the company, as well as with management. With a 68% ownership there is nothing management can do if indeed the trust want's to sell. There is virtually no analyst coverage (another plus, IMO), because the company does not need Wall street. The stock IMO is priced for very low expectations in 2008 and since this stock in a decent environment is a strong cash generator, i really think it would be an excellent acquisition candidate for a strategic buyer like WEB who has cash and some patience.