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Grand Banks Yacht - great value play
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tigertrader
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13-Nov-2007 22:23
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The 1H08 results for GBY just came out. The topline, although it showed a drop, is much better than other competitors in the segment like Brunswick. Either way, the numbers reflect orders from 12 to 6 months ago, which was the bottom of the industry cycle. Since then sales have really picked up (see http://www.grandbanks.com/newsEvents/pressroom/2007/102507.cfm) for GBY and the backlog is higher than the previous half (per the results document on SGX website). Also, the substantial cash balance is still intact and represents close to 40% of the market cap. On that basis, it looks like a great value play particularly if the market weakens the stock due to the results. Based on comments by management at the AGM, the company is seeing some great strategic opportunity (buying smaller competitors, addt'l sales venues in Australia, Europe, etc.). In fact, the board recently set up a team to look at such strategic opportunities. Based on my projections, the company is trading around 4x EBITDA and has some potential catalyst going forward. Definitely worth a look for value investors, but not a momentum stock. |
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