Investment Strategies / Falling Knives
No. of Recommendations: 2
I have been watching NWL sink steadily for several years with an occasional uptick. Bad management, debt, tariffs have it at a 30-year low with no relief in sight. EPS maybe 70 cents, so Valuation OK, but prospects bad. I have never owned it, but it is a little tempting. Any opinions?
abromber
No. of Recommendations: 2
The stock has limited room for growth and a high debt level. Before I would consider a stock purchase, I would look very hard at the debt levels, maturities, ability to refi at decent interest rates, etc.. It is much better to buy a good to great business at a good price than to buy a stagnant business with no moat and limited growth prospects at a great price.
The debt level will stop them from any acquisitions. What else can they do? They own older low growth brands.
Jk
No. of Recommendations: 2
Thanks. Revenue is still dropping 10% YOY, and from what I can tell, a significant portion of debt will have to be refinanced at higher rates in next few years. OTOH, margins are steady, and the stock is trading at half its book value, and they cut the dividend in 2023 which hurt the stock price but gave them financial breathing room. The company has a relatively new CEO - the former CFO. I like their brands. But I cannot see any real prospect of a turnaround (yet.) I will continue to watch.
abromber
