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    • Manitowoc-Enodis: Not a Poison Pill, But Not Good Strategy Either [view article]
      If you're not undermining food service, then what is the problem exactly? Companies can have, and frequently do have, core competencies in more than one business. The problem that companies run into is when they let a particular business line sprawl so that they are trying to do too many different things at once. Like Microsoft.

      But there are tons of industrials that effectively manage many different businesses at once. Ingersoll-Rand is just one example. Walter Industries. Cummins.       Apr 22 01:17 PM
    • Manitowoc-Enodis: Not a Poison Pill, But Not Good Strategy Either [view article]
      I'm long MTW as well, but I think you are missing a larger picture.

      First, MTW already has substantial operations in the developing world, such as India and China. And they made $100M in CapEx in cranes business in 2007, so I'm not seeing any neglect of the lifting segment.

      Second, global food services is a high-growth industry as well. Modernization in China and India also means more modern restaurants with better sanitation. MTW is exercising forethought. Cranes are hot right now, but food equipment will be hotter in five years.

      Third, the price for Enodis seems high given Enodis' recent performance. But that's a classic buying situation. Buy the underperforming company to get it at a cheap price. They paid a pretty steep premium to the market closing price, but not necessarily to the value of Enodis' assets under more aggressive management. The currency is not a critical issue since Enodis' revenues were largely dollar-denominated, one reason that Enodis' recent performance on the London exchange has been in the toilet. So they paid with cheap dollars to get a dollar cash flow cheaply.

      At the end of the day, why not trust the MTW management on this one? They've done a great job building the lifting business.
      Apr 21 02:05 PM
    • Where is Garmin Leading Us? [view article]
      Incredibly bad analysis. The terribleness of this analysis cannot be overemphasized. All you've shown is that sales growth causes a decline in DOS. Duh. Also, has units in inventory declined? As prices for units decrease, inventory carrying value declines even if inventory supplies are sufficient to support rapid growth. By the same token, a decrease in the number of different models would also lead to declines in inventory and yet sales growth would be unaffected. Apr 16 04:38 PM
    • Astec Industries Q3 2007 Earnings Call Transcript [view article]
      This transcript is inaccurate in a few places and the errors are critical.

      The paragraph recorded above as:

      I guess, while we got such a strong backlog, there's still a little bit of puzzle there. We are surprised that at the backlog that we got quite frankly, and they continue to keep coming. The prospects are very good for the asphalt, but we aren’t hitting a whole lot stronger, proportional amount of international business.

      is actually

      I guess, WHY we got such a strong backlog, there's still a little bit of puzzle there. We are surprised that at the backlog that we got quite frankly, and they continue to keep coming. The prospects are very good for the asphalt, but we ARE hitting a whole lot stronger, proportional amount of international business.

      Also, above it is written that:

      So you have a higher warranty expense when you have it, which flows into your gross margin. So, we just had an inordinate number of them trying to hit this quarter, which was unusual. But to answer your question, generally, I had to build four or five of them, and in most cases that's about where we are as, so we can see as much of effect in the fourth quarter as we did in the third.

      But what was really said was:

      So you have a higher warranty expense when you have it, which flows into your gross margin. So, we just had an inordinate number of them KIND OF hit this quarter, which was unusual. But to answer your question, generally, AFTER we built four or five of them, and in most cases that's about where we are, so we WON'T see as much of effect in the fourth quarter as we did in the third.



      Oct 23 02:51 AM
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