These thoughts were shared yesterday morning with my clients:
This is just my quick take on SPW results - and as you know I've a) had a Hold on the company and b) they have been underwhelming with their capital discipline and execution.
Will publish on all the details in due course but here are my initial thoughts:
They've been taken to the woodshed by Relational Advisors. Here is what has changed:
1. They fired the heads of 20% of the company - ClydeUNION will be headed by a been there, done that guy who has fixed multiple businesses. Thermal - the new head is an internal promotion and they will "restructure" - i.e. cut heads - to reflect reality (no turn over next 2-3) years.
2. NO DEALS IN 2013. This is 180 degrees from nearly overpaying on GDI by $500 million, after overpaying for ClydeUNION by $300M+.
3. Share repurchase is near-term priority.
4. Long-term - if it isn't Flow, it's got to go." (If you haven't seen the movie Undercover Brother, you have no taste for fine cinematic art ;-].
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Additional disclosure: SPX Corporation (SPW) is rated HOLD by Langenberg & Company. Guidance is now $4.25-4.65 for 2013 and we have not yet updated our estimates.