No. of Recommendations: 1
I don't see any immediate obvious hazards on the bond or equity end. Fundamentals suggest a "A" rating or tick below. I get estimated fair value of their debt at 6.95% - 7.45%. Ignoring the trading price the yield is trading at a premium for what it is. Which is common across much of the debt market.

Looking at the balance sheet it looks like a large chunk comes due this year. Q/Q long term debt dropped by 296mil, Q/Q short term increased 424mil. Assuming they roll the debt it could "dilute" the longer end pool pushing the price down. Just guessing. Rolling the debt should benefit the company in the long run with current rates being so low. Longer history of accounts payable/accounts receivable did not look upside down to me.

SLE has also been doing some buying and selling of assets which can change investor opinions. Selling of assets can unnerve debt holders.

The reward is most likely on the equity side. 2.34% dividend possible value of $40+. (just spit balling a number working capital can be volatile for some companies and I have looked at SLE's WC history to know if it is volatile and would require some smoothing)

just kicking tires.

jack
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.