the cmi story, page-30

Guys, the whole discussion here has been focused on CMIPC, not on commons. It is true that management is kind of abusing their position against class A shareholders, but CMI's value as a whole has been enhanced over the last few years. In my opinion, commons has way more upside than the class A shares. Maybe we should pick up some when it is still cheap.

If there is one thing we are sure about Catelans, it is that they are here to make money instead of hanging around forever. Last year, CMI paid 1.5m in total compensation to management. While it is a lot, the Catelans can gain a lot more from the appreciation of common shares. If GP is right, then the current share price implies less than 3 times cash flow in 3 years time. If we assume moderate growth in electrical business and break even in TJM, in 3 years the common is going to be a 4 or 5 bagger. It is the most sensible way for the Catelans to straighten things out and exit at a fancy price. There will be lots and lots of suitors who want to buy the electrical business.

Management is going to try again to lowball the class A shareholders. While I doubt this is ethical, it is probably wise to invest along with management. I apologize if I offended anyone on his or her excellent work, but profit is all we are after.