Donald Marchiony, Westpark Capital
Long/short equity, value, hedge fund analyst, special situations

Spectrum Brands: Significant FCF At A Discounted Valuation

Executive summary:

    Spectrum Brands is an unloved story by sell-side analysts, but one that has turned the corner and is starting to throw off massive amounts of free cash flow. Without any organic growth, the company will generate greater than $8 per share in FCF during fiscal 2015. SPB's recently acquired HHI segment, which accounts for 25% of revenue, is directly tied to a recovery in the housing and home improvement market. The segment has grown by double-digits in each of the past four quarters. Share buybacks, future dividend increases and debt paydown will continue to reward equity holders over the next few years. While competitors trade on average at a 5%-6% FCF yield, SPB trades north of 10%. If ...
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