FourBrane

The Lessons I Learned From Passing on RadioShack and M & F Worldwide

You seem to be saying that this company is in the licorice business, but that's not quite the case.

I missed the up rocket, but think there might be a down rocket. Here are my notes:

June 9: For a time I considered shorting this company, but after looking at it more closely I think it's simply impossible to figure. There are dead and dying industries mixed with others that are doing well (although for how long...?)

This company is classed as a "food processor," but that's just plain wrong. It's a messy conglomerate of stuff that doesn't belong together. You've got: a smallpox drug pharma, a licorice refiner, Hummer, the Panavision movie camera, a 35 mm film processing lab, Revlon, three different printers of bank checks, financial software, a big lottery ticket producer, the Scantron school grading systems, and an early-stage pharma with no products. What the hell is this thing? How do you figure it out?

Long term it looks over-priced at a PE of 38 for a bunch of disconnected trash and treasure, but it's at the bottom of its 3 and 6 month channels and could easily climb 10% over the next quarter. Plus, fighting the deep pockets of Ron Perelman is not my idea of a safe bet.

The Harland acquisition is underwhelming as this just gives them a bigger stake in a dying industry. Each year fewer checks are written as more of us move our money around electronically.