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

To: Jurgis Bekepuris who wrote (50860)	2/12/2013 11:42:09 AM
From: Paul Senior	Read Replies (1) \| Respond to of 78744

HY: After visiting a large warehouse operation in January, I came away impressed with the manager's enthusiasm for his Hysters. One aspect --different from my days in the factory -- was that between each shelving rows, imbedded in the cement floor, was a track which enabled the forklifts (all Hysters) to automatically move to particular spots to pick, thus relieving the operators of some manual operations. My point: it may be possible that once the Hysters are purchased and installed in this type of operation, they may be difficult/expensive to dislodge by competing products. Based on my visit, I decided to purchase a few HY shares (which I did @ $50.26/sh). I did not post this here, because imo, HY isn't a value stock at current price. As you say, we already have missed the runnup. Maybe "some" of it, maybe all of it. I don't know; I'm willing to chance a few shares though. There was an article in Barron's in October that was positive on the stock. Positive anyway, when the stock was at a $39.51 back then. Now, with the stock @$50, maybe not. Here's a clip from that article by the author, Mr. Englander: "With just 40% of revenue coming from outside the U.S., Hyster has ample room to expand in overseas markets, particularly in emerging economies. A substantial opportunity exists for margin expansion, as well. In the June quarter, operating margins were 4.1%. That's well below average margins at competitors of 6.6%. Management feels that 7% operating margins are possible as it expands its product offerings. THE COMPANY HAS A SOLID balance sheet, with $143.1 million in cash to $142.6 million in debt. Robert McCarthy of Robert W. Baird, the lone analyst on Wall Street covering the company, thinks it could initiate a $1-a-share annual dividend next year, for a 2.5% yield, in line with other machinery companies. A dividend announcement or an acquisition could be a catalyst for the shares. McCarthy forecasts earnings will come in at $4.40 a share this year on slightly lower sales. Though volumes are rising, the sales mix may be weaker. He expects earnings to fall to $4.20 next year before rebounding to $5 a share in 2014. At 10 times that estimate, the stock could be worth $50. And even if earnings slip in the near term, expect Hyster-Yale's free cash flow to remain strong, providing plenty of flexibility for the company to grow. " =========== Maybe the Robert W Baird analyst is right about the company, and that it's worth $50, about where it scooted up to. Since I'm a buyer/holder @$50, I hope he's wrong of course, and that the stock is or will be, worth more. I have no real supporting numbers to back me though.