Detroit Bear
Deep value, special situations, long-term horizon, value

Tower International: Earnings Before All Of The Costs

In performing my daily screens for value stocks, I came across a smallish auto supplier by the name of Tower International (NYSE:TOWR). The company has dealt with bankruptcy, its re-emergence and operations under private equity firm Cerberus, and its subsequent IPO in 2010. At this time, the firm trades at only 8x its consensus FY2014 adjusted earnings per share of $2.87. However, for several reasons, shares are not a bargain.

What Tower Does

Tower International is an OEM auto supplier. What that means, is that the company creates parts for cars that are directly sold to OEMs based on specifications made by OEMs. Tower specializes in metal fabrication so it manufactures chassis structures like full frames and suspension...

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