10 ordspråk av Mitchell Corwin
Mitchell Corwin
As expected, it was a messy quarter. Retail was expected to be fairly weak, maybe there was a little more weakness in the supply chain services than investors had expected.
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Buying food has turned into a commodity, so supermarkets have to continually raise the bar to keep their customers.
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I think that this means that the sales process is not going well.
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I think the offer is great for shareholders. As of the close yesterday, the stock was already at about a 24 forward P/E, so I think this represents a pretty good exit for shareholders.
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I'm not as concerned because the company is gaining market share relative to its peers and generating strong earnings and strong cash flow.
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The company continues to grow, unabated by industry and competitive threats.
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They're probably disappointed in the offers that came in and they may be holding out for a higher price. Or they may be trying to do the breakup themselves, exit the underperforming markets through real estate sales and keep the operations in stronger markets.
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Walgreen remains on a steady growth path, relatively unabated by industry or competitive threats.
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We have no problem with the board aiming for a higher price. However, should the company pursue the limited breakup alone, we have serious concerns about whether that risky strategy will ultimately yield better returns for current shareholders.
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We previously assumed Whole Foods' growth rate would trend down precipitously after five years because we believed the company, similar to many high-growth companies, couldn't sustain its rapid growth. We think we are being overly conservative with that assumption.
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