L.B. Foster: Hidden Value In A Post Acquisition Development

Nov. 30, 2022 8:11 AM ETL.B. Foster Company (FSTR)3 Comments
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Almyra Research
279 Followers

Summary

  • In a base case scenario where FSTR generates $550m sales, 7% EBITDA margin and $6m capex, it should make $20m FCF.
  • VanHooseCo acquisition for $52m increased debt but the new facility becomes operational post-acquisition date hence yet to report any significant profits.
  • Trades at 1.0x TBV which should offer some protection from a permanent capital loss.
  • In Aug-22 and Sep-22, insiders W. Thalman (CFO) and J. Kasel (CEO) acquired shares at $11.5 to $15.2 price level.

Railway rails and sleepers close-up.

Sergei Ramiltsev/iStock via Getty Images

Business

L.B. Foster Company (NASDAQ:FSTR), founded in 1902 in Pennsylvania, is a global solutions provider of engineered, manufactured products and services that support infrastructure projects. The company maintains locations in North America, South America, Europe and Asia. 75% of sales

Segment Breakdown

Company's Presentation

VanHoose Price breakdown

3Q22 Financial Report

Leverage

3Q22 Investor Presentation

UPRR Settlement

3Q22 Financial Report

Adj. EBITDA History

FY21 Investor Presentation

Adj. EBITDA History

3Q22 Investor Presentation

This article was written by

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279 Followers
Most people do not understand that wealth accumulation is a slow and meticulous process. Speculation, as opposed to long-term investing, is probably the quickest road to wealth destruction. I tend to see short-termism as industry standard bias that guarantees under-performance. No one can really tell what lies ahead. Successful investment managers study investment history, dive deep into business models and try to see just a bit into the future when the opportunity offers a sufficient risk/reward ratio. They probably do not have a better crystal ball than the rest of the industry but they are good at underwriting risk, discounting noise and focusing on good businesses with a promising story. Investing is a game of probabilities. Value doesn’t come from models but from stories. Investors are attempting to divine the future and some futures have a higher probability of correct divination than others.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in FSTR over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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