Gaurav Sodhi has just posted his update on RPM for Intelligent Investor
In short he still appears to like the stock and advocates a HOLD
Some choice snippets ...
"It's easy to see why the market threw a tantrum at RPM Global yesterday. At one stage, the stock was down 20%, all because EBITDA (earnings before interest, tax, depreciation, and amortisation) guidance, previously expected to be $22m for the full year, was confirmed at $19m. Oh, that's before management incentives, by the way
The source of my own annoyance wasn't the numbers themselves - we didn't think they were too bad - but the slimy avoidance of clarity
Note to RPM management: your bonuses are real costs. You don't get to exclude them"
"This update doesn't warrant panic or a change in thesis. We note that RPM's share price rose about 65% in six months before today's fall. That rise probably contributed as much as today's announcement. We also note that the business was active buying its own shares yesterday amid the fall - they bought back over 1m shares in a day
With software sales still growing and falling to the bottom line, a net cash position, and software deeply embedded with miners, we're happy to HOLD"
Disc: Held in RL & SM
