I don’t have time to write up a proper post, as I’m behind in CFA level 2 study.
But I bought Tenon (TEN on the NZ stock exchange). Tenon is a wood products processing, marketing and distribution business.
Here are some brief notes:
- Director’s wife bought 50,151 shares for $68 000 In March 2014.
- Planned resumption of shareholder cash returns in second half of calendar 2014.
- Intending to increase the company’s equity exposure to US investors.
- Edison analyst report values Tenon at mid-point of $2.40 per share (current price of $1.40)
- Third Avenue Value Fund is a big (18%) shareholder.
- Bottom line profitability expected in second half of 2014 fiscal year (before restructuring costs).
- EBITDA of $5 million recorded in most recent year.
- Targeting $10 m EBITDA in fiscal 2014.
- Mid-cycle EBITDA (assumes 1.7 million housing starts and NZD/USD of 70cents) of $45 million.
Basically, this company is levered to US homebuilding, but has been left behind in the runup of those stocks. That could be because the float is limited, the stock is only listed in New Zealand, etc.
It looks pretty cheap, so I bought a smallish position. This is a useful summary of the latest annual meeting.
Back to study now!
fund of well-conceived investments 
All the right reasons for buying from valuation perspective, insider buying and smart money following (whitman)
How do you view the probability of various outcomes?
More specifically – is there some data point you see as a red flag (housing starts, or construction activity or cost of production etc etc?)
USA housing starts are the key metric, and disappointing recent housing starts cause me to extend my expected time horizon, but not the fundamentals. As has been pointed out by many others, housing starts have been below household formation for 5 years now. At some point it will turn.
Thanks for the comment!