| To: Michael Burry who wrote () | 11/18/1996 12:07:00 AM | | From: Harlan Huber | | | |
Mike, how about a company called Nortek from Providence, RI, dealing in
residential building products, air conditioning and heating products,
plumbing, indoor air quality, etc. This company will earn at least
$1.75 per share this year ending Dec 31, 1996. It currently trades
around $14 per share for a PE ratio of 8. Management has successfully
turned this company around the last 5 years, but wall street analysts
continue to assign it a low PE ratio.
Valueline currently has this stock ranked as a 2. The company has
repurchased 2.2 million shares so far this year, and is now buying
back another 500,000 shares apparently between 14 and 14 3/4.
Mario Gabelli has owned 2 million shares for at least the last 5 years.
Prior to the latest repurchase, there were 9.5 million shares of
common and 0.5 million shares of special common (more voting rights)
still left. The reason for the buyback is that the company thinks its
shares are significantly undervalued.
Do you have any opinion on this company? Yahoo news has the latest
earnings reports ,etc.
Thanks, Harlan |
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| To: Harlan Huber who wrote (1) | 11/18/1996 8:51:00 PM | | From: Scott Mc | | | |
Gents, How about a company called Beazer homes on NYSE,(BZH) trades at
15, justreported earnings of $2.20 and net assets of $19pershare.
(Probably undervalued since some of it is land purchased in early 90's)
Wait it gets better
CEO Beazer just named head of AmerHome Build Assc, they are buying
back shares and there is a convertible preferred which pays 8%.
Growing like crazy, seem to have a good product
PE 7
Growing 30% plus
trading under net asset value.
I'm too conservative to buy more, but hindsight says I should have backed up the truck and bought everything I could.
Any comments?? |
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| To: Scott Mc who wrote (2) | 11/18/1996 10:12:00 PM | | From: Michael Burry | | | |
Scott and Harlan,
I worry about BZH's LT debt load relative to available cash of
only 1 million. Most of current assets are inventories, which
are substantial, but is expected. I wonder why BZH didn't rally
with the other home builders earlier this year.
NTK blows me away. I'll be buying ASAP. Love the way they
are buying back shares. They too have lotsa debt, but also
have a significant cash position of about 4 bucks/share.
My pick, PRMO, gained like a point and a half today, so I wonder
about its value, but still it has 5.5 bucks cash and lotsa potential.
Good luck. I welcome any other views.
Mike |
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| To: Harlan Huber who wrote (1) | 11/18/1996 10:44:00 PM | | From: Michael Burry | | | |
To all:
PROVIDENCE, R.I., Oct. 28 /PRNewswire/ -- At the Nortek, Inc. (NYSE:
NTK) annual shareholder meeting, Richard L. Bready, Chairman and Chief
Executive Officer, announced that the Board of Directors has
authorized a program to repurchase up to 500,000 shares of the
Company's common stock, subject to market conditions and cash
availability.
Citing a belief shared with Nortek's Board, Bready said, "At the
current market price our common stock continues to be significantly
undervalued and does not properly reflect the current or potential
value of our Company." Nortek shares closed Friday at $14.50. Bready
said the Company expects to make purchases in open-market or
negotiated transactions. This is the third buy-back program Nortek
has announced in the past 12 months. Altogether, 2.4 million shares
were purchased during the two previous programs.
In his annual address to shareholders, Bready reported strong
earnings gains for Nortek and an improving economy in 1996.
He also said he was "bullish" about Nortek's future, noting the
Company's leading role in indoor- air-quality technology and the
growth prospects arising from its presence in the global marketplace.
During the regular business portion of the annual meeting, the
following Directors were re-elected to three-year terms on
Nortek's Board: William I. Kelly, Director of Northeastern
University Graduate School of Professional Accounting;
and J. Peter Lyons, President of the J. Peter Lyons Companies.
A shareholder proposal to amend the By-laws of the Company,
which would have changed the current mechanism for shareholder
nominations of directors, was defeated.
Nortek, Inc. manufactures and markets residential, commercial
and industrial building products. This release contains forward-
looking statements relating to future financial results. Actual
results may differ as a result of factors over which the Company
has no control, including the strength of domestic and foreign
economies, slower than anticipated sales growth, price and product
competition and increases in raw material costs. Additional
information which could affect the Company's financial results
is included in the Company's annual report and on Forms 10-K and 10-Q,
on file with the Securities and Exchange Commission.
SOURCE Nortek, Inc.
CO: Nortek, Inc.
ST: Rhode Island
IN: CST
SU:
10/28/96 08:57 EST prnewswire.com
************
Just some news for readers of the thread--the story behind Harlan's
comments.
Mike |
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| To: Michael Burry who wrote (3) | 11/19/1996 10:29:00 PM | | From: David Lawrence | | | |
I marked NTK in the last Value Line report. Still debating a position. A pretty decent report, but with some caution looking forward...
"However, the real test will be 1997. Given its cyclical nature, the company often follows a strong year with a mediocre one. Nortek is attempting to combat this problem by shifting its product mix towards higher-end goods and expanding overseas. The company has gained access to a number of potentially lucrative foreign markets through its 1995 acquisition of Best SPA, a range-hood manufacturer headquartered in Italy. Best SPA sells premium Euro-style range hoods throughout Europe, the Middle East, Australia, New Zealand, and Asia. Nortek also purchased two other home-furnishing businesses last year, Raingaire and Venmar Ventilation. All told, these acquisitions have boosted revenues by close to 15% this year, and they are already making a solid contribution to the bottom line. Still, the company has yet to prosper during an economic slowdown, a distinct possibility in 1997."
Decent upside potential, limited downside, FMPOV. |
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| To: David Lawrence who wrote (5) | 11/19/1996 11:01:00 PM | | From: Michael Burry | | | |
David,
Fancy meeting you over here. I think we've met on several other
threads. In any case, thanks for the contribution. Too late
for me to be cautious; I bought in 1600 shares today. That
management has bought in 2.4 million shares and wants to buy
more back at current levels just blows me away. You just don't
see many companies doing that in this often overpriced market.
I am also counting on the overseas expansion -- another point that
sold me -- to help buffer any US recessionary sequelae.
Mike |
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| To: David Lawrence who wrote (7) | 11/20/1996 12:15:00 AM | | From: Michael Burry | | | |
David,
Man, sorry about that but my email's now mikejburry@aol.com.
Decided to take them up on their 50 free hour offer. If you
could resend it to me I'd appreciate it.
Mike |
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| To: Michael Burry who wrote (3) | 11/20/1996 9:58:00 PM | | From: Scott Mc | | | |
Michael,
Thks for the quick reponse, although their latest Q report for
sept 30 showed $14M cash, and 5 banks have increased their loan
allowance to Beazer at better terms, even though they arent using
it
.
I saw in a later message you went ahead and bought NTK, good luck,
looks like a winner.
Scott
PS: Do you know a Ken Burry from Vancouver, Canada?? |
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| To: Michael Burry who wrote () | 11/21/1996 2:10:00 AM | | From: Harlan Huber | | | |
Mike, according to ValueLine, Richard Bready, the CEO, bought 48,000
shares when the price was 12 7/8 on September 24, 1996. I presume he
exercised stock options, so I have no idea what he actually paid for
his shares. Nevertheless, I would view this as somewhat encouraging.
The view that Nortek will have to perform better next year than this
year is well taken. I'm confident they can beat last year's 4th
quarter this year, and for the first quarter next year, they only have
to beat $0.19, since the first three months of last year were a horrible
winter all across the country with a very adverse impact on home
building. Of course, they probably really have to beat wall street
expectations for their earnings, and I don't know what those are for
next year.
However, the major overridding concern might be whether the bull market
ends before Nortek's stock can get going. Some of the guests on
Wall Street Week are predicting that the small cap stocks, many of
which are under tax loss selling now, will play catch up to the big
cap stocks once the "January Effect" gets underway after Thanksgiving
or in the first quarter. I hope they are right. Clearly, the big
cap stocks seem to having a blow off right now.
Good luck on your investment. I am invested in NTK at $13 so I don't
have any huge profit yet. Since the company keeps buying back shares,
the liquidity gets less all the time, and I hope this doesn't scare
off all of the fund managers, who like to be able to move in and out of
their positions in a relatively short period of time.
Perhaps, the company will buy back more shares in the first quarter,
I hope so, because if they did so AGGRESIVELY, this would really
drive up the price of their stock, at least on a temporary basis.
Harlan |
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