Is Jlk not a growth stock. The combined analyst estimates for the next five year growth is 20%. JLK is trading at 9 times next years earnings. Is this a value stock? Why did it go from 39 to 9?????
KMT paid Joel and Irwin $55 mil for this company that was just a regional mail order catalog company that was having a hard time paying their bills. KMT bought it to become the sole integrated supplier to the Saturn plant. Our industry was just beginning the process of consolidating all the Ma & Pa's. That process had many ups and downs and has basically stagnated of late. The independents that survived will continue and now there is no more potential for easy growth plus all the competition. Our industry is tiny compared to most and the remainder of the non acquired independents are not available. The catalogers are feeding off of each other's customers. A growth company needs lots of possible acquisitions for fast growth. An example of this would be AN (Auto Nation) which is buying up dealerships left and right. This is a huge market compaired to the industrial supply biz. I could expound on this subject for hours but my final thought is that there just is not enough pie for all the pie eaters in the tool biz.
So why would KME take this public if it did not need cash for more acquisitions??? Why will the buyers of JLk stock at 36$ a share stand for $9 price today? Were they dooped?
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