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

To: E_K_S who wrote (51458)	5/2/2013 11:59:05 PM
From: Spekulatius	1 Recommendation Respond to of 78744

100M$in EBITDA (2012) with a 1.1B$EV and 2.2x book is just too expensive for a deeply cyclical business like Answorth. While I agree that housing is recovering, I could easily see that all these mills starting up could overwhelm the somewhat increasing demand and destroy the margin for all participants. This could work out very well or very badly and I have no way of telling. It's a pass for me.

To: E_K_S who wrote (51458)	5/3/2013 11:12:30 AM
From: gizwick	Respond to of 78744

Picked up a few based on future earnings growth. Thanks

To: E_K_S who wrote (51458)	5/4/2013 12:29:13 AM
From: Spekulatius	Read Replies (1) \| Respond to of 78744

I am wondering what caused the EBITDA spike (and subsequent decline) in 2010. This cannot be just from the demand side. My biggest concern would be that increased supply (they are talking about starting up mothballed mills again and I am sure the competitors are doing the same) overwhelms the expected gains in demand and margins decline. I do like a play on housing but I wonder if Answorth is the right vehicle to do so. Also, Answorth talks about the Mills that are starting up again being low cost - but how come that low cost production sites have been mothballed. If they are truly low cost, they should make a small profit even when times are bad.