Since my Q on SPB 6/24, a few key things have changed.
1) can you discuss the key Corp.changes (cut to divi being the most significant) and possible impact to their balance sheet?
2) Has anything changed with regards to Brookfield ownership?
3) What is your ouotlook for the SP given answers above. Looking at the 1 yr chart, it's gone from 10 to 6 so a 50% fib. retracement implies a move back to 8. (That's my back of the napkin assesment.)
I'd like to bring this to a full position, but wanted your commentry first.
Many thanks for your help.
1) The dividend was cut 75%, but even so the yield is still 2.94% as the stock is down 4% YTD. The cut will save about $110M in cash out. Total debt is $1.8B so even with the cut the balance sheet remains quite leveraged. Q3 results also showed a big miss (73%) vs estimates. All metrics missed Street forecasts. 2) Brookfield still owns 15%. Note these are through convertible preferred shares and thus will often not be reflected on insider reports. 3) EPS is expected to grow to 24c this year. But even then, at $6, it is 25X earnings, which considering its size, debt, dividend cut and overall weak history we would consider still on the high side. Thus we might not expect $8 here without a fundamental turn. We would be fine waiting to see some evidence of this.