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Scott Wachsler
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I manage Wax, a baseline equity research company comprised of individual investors not licensed or registered with any government agency. I have been all cap value investor and independent equity researcher for the past 30 years, and believe that patience is the key to successful... More
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Wax Ink
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Wax Ink
  • RPM International - Slowing To A Crawl 0 comments
    Dec 30, 2013 5:37 AM | about stocks: RPM

    RPM International, Inc. - (Reviewed 12/30/2013)
    RPM International, Inc. (NYSE: RPM) - Negative Investment Interest based on a recent price of $41.12 and a fair value estimate of $22-$28.

    The company and its subsidiaries manufactures, markets and sells various specialty chemical product lines, including high-quality specialty paints, protective coatings, roofing systems, sealants and adhesives.

    There is no reason to own this stock at current pricing levels. With y-o-y debt growth of 22%, y-o-y free cash flow growth of (-3%), and y-o-y earnings growth of (-15%) there is currently more downside risk to ownership than upside reward.

    Additional risk has been added by a one-year increase in price of 42% versus an 8% increase in revenue which lead to a (-14%) decline in EBITDA. My opinion is that management is simply not paying attention.

    If you like the stock, add to your watch list and wait. Eventually the stock price will come to you. When it gets to $17, I would start a position and dollar cost average down to about $14.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: RPM
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