I think you hit on a lot of the points here. Unfortunately, it's not as interesting as I would like this to be. Good RemainCo, and I agree with your valuation there.
For SpinCo, there are probably really good efficiencies that can happen, especially around working capital. Which is like a primary driver of their value, but I don't know how much juice is really there anymore.
We'll see if remainco gets interesting. Not as juicy, but enjoyed the write-up.
6 weeks later and it looks like the thesis still holds, only the upside is now ~26%-58% (in the short term). Longer term, should investor day projection hold, even more.
I think you hit on a lot of the points here. Unfortunately, it's not as interesting as I would like this to be. Good RemainCo, and I agree with your valuation there.
For SpinCo, there are probably really good efficiencies that can happen, especially around working capital. Which is like a primary driver of their value, but I don't know how much juice is really there anymore.
We'll see if remainco gets interesting. Not as juicy, but enjoyed the write-up.
Yeah, I landed somewhere similar... plus it's soon enough that might as well wait to see how it trades...
That said, I love distribution businesses. They require solid operators and careful working capital management, but they can be great businesses.
In distribution, "growth" and "cash flow" are opposite ends of the spectrum though :)
6 weeks later and it looks like the thesis still holds, only the upside is now ~26%-58% (in the short term). Longer term, should investor day projection hold, even more.
Both of these are still sitting on my watchlist / on deck list... I'm particularly interested in ADIG but haven't pulled the trigger yet
Further pounding on Rezi w/ the announcement of Apple that it is developing a lineup of connected home devices with LG Electronics...
You did call competition a risk!
I liked REZI sub $20, the valuation metrics are enticing.
Great review, thanks