Seeking Alpha

William Kabourek's  Instablog

William Kabourek
Send Message
William F. Kabourek, the crusty credit analyst (http://thecrustycreditanalyst.blogspot.com/), is a retired 65 year old. His business experience includes being president of two commercial banks, owner of 25 furniture rental stores, and partner in a private equity firm. William is retired for 15... More
My blog:
The Crusty Credit Analyst
View William Kabourek's Instablogs on:
  • I'm Hopeful Flexsteel [FLXS] Will Not Join My Portfolio Of Turkeys

    (click to enlarge)

    Gerts and I were out for our morning walk when I noticed a small herd[?] of wild turkeys in a neighbor's yard. They didn't pay any attention to us, but they got me thinking about my portfolio of under-performers. I often get enamored with a good company that seems to be a bargain, thus ensuring great profit, yet continues to languish for months or years before returning to an upward trajectory. These turkeys drive me crazy because I know I'm right and the market doesn't agree. Damn machines and kids!

    Yesterday Flexsteel, the Dubuque, IA based manufacturer of furniture and seating, was taken out to the woodshed and paddled. It happened again this morning. I cannot find any bad news or forecasts. The company released record yearend and quarterly profitability, plus said current trends should continue.Sounds good to me.

    FLXS doesn't have any debt and is paying a nice dividend. The yield is 3.0% and they are paying out only 25% of earnings. The current price is 1X book value, .4X sales, and less than 6X cashflow. Liquidity isn't an issue as they have a 4:1 working capital ratio. Looks like a well run Midwestern company.

    I've pushed the buy button several times today and hope to get back quickly some of the 15% the stock price has fallen the past two days, plus a nice, growing, dividend.

    Disclosure: I am long FLXS.

    Aug 29 1:10 PM | Link | Comment!
  • Alternative Energy Companies Look Promising
    Of late I've been listening to Dead CDs, wondering if the Fish will do a Midwestern tour this summer, and thinking about joining Nebraskans for Peace. I can trace the beginning of this behavior back to my purchase of Power-One, a leading manufacturer of solar/wind power inverters. That investment led to a position in JA Solar, a Chinese solar panel manufacturer. I'm in danger of morphing into an environmental wacko. Since I'm not a total convert yet, I hope I've bought my two alternative energy positions cheap enough to make me a prosperous wacko. Also, to keep this behavior from becoming religion, I remain very happy with my nuke related investment in Shaw Engineering and a passel of oil and gas producers.
     
    The stock market appears to hate the alternative energy space. After a number of years as "high flyers", solar companies have fallen out of flavor. Markets are concentrating on the possibility of less governmental subsidy due to budgetary restraints and have killed valuations. Companies can be had for a couple multiples of cashflow. Even if inventory gluts, reduced margins, and falling sales do materialize and cut last years record earnings in half, a purchase today represents only 5-6 times EBITDA and since solar is not going away, that's a very attractive entry point.
     
    JASO sells for 3 X EBITDA, 1 X Book, has a 30% ROE, and reasonable debt. It has been around for a long time, seven years, and is well respected. As a local company, it will do well as China builds out its solar plans and has facilities and joint ventures in all other areas of the globe. It has been a big player in Europe, solar's number one locale, and will be a big player as the rest of the world picks up any slack from European retrenching. They just reported 1st quarter results which were excellent and the guidance was positive as well.
     
    Renewability, high oil prices, Mid-East tensions, and cheap valuations are all working in this wacko's favor. Peace.


    Disclosure: I am long PWER, JASO, SHAW.
    May 14 3:33 PM | Link | Comment!
  • Today i Will Experience Anti-Inflation
    The mid-to-late 1960s were a colorful era, to say the least. Dayglo concert posters and strobe lighting symbolize that period of acid rock music. LSD was a mind expanding [per Timothy Leary], intensely color laden experience. I grew the hair, liked the music, but preferred the tamer indulgences.
     
    My Macbook has been treating me to a late in life hallucinogenic show as it slowly dies. I've always been annoyed before as PCs crash and die after a few years. Vastly slowed performance, then a bunch of white numbers, letters, and symbols set against a black backdrop. Then I need to go to the electronics store for a replacement. Not the Mac.
     
    My original Macbook, purchased when they came out in 1996, has been a work horse. It's been dropped twice onto hard flooring and the edges were held together by tape. But it always continued to work perfectly. The cursed colorwheel didn't even spin too often. Truly a good product and well worth the money spent.
     
    But it now seems to be on it's last legs. Each morning it has been putting on a psychedelic light show of flickering, pastel lines. The show is so pretty that I don't even mind the inconvenience. After the performance, it lasts about 5 minutes, the Mac takes a bow and functions admirably the remainder of the day. I thought today might be the overdose as the performance lasted longer than usual, but I'm typing!
     
    If it quits this afternoon, or the next day, I'll experience anti-inflation. We a regularly told that the USA has inflation well in check and the cost of living remains low in spite of galloping food and energy prices. In fact, since those two components are volatile, we should remove them from our core inflation calculation. How can this be? I'm about to actually benefit from anti-inflation and reduce my cost of living.
     
    The Fed tells me that my new Macbook will have much more memory, speed, and features that its predecessor so that equates to a falling price. It won't feel like a lower cost when I write the check, but I will be able to take some solace in knowing that my personal rate of inflation isn't charging upward as it will have been tempered by all of the new Mac features. When I fill my tank I'll know that due to my buying a new computer my gas isn't really impacting me as much as it did at my last fill-up.
     
    I'm rooting for the Macbook to survive even if it means I continue to be ravaged by food and energy costs without my electronics cost of living offset.
    Apr 04 9:49 AM | Link | Comment!
Full index of posts »
Latest Followers
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.