Will be interesting to see how ROE comes in when they announce earnings. Feel they could be impacted by some competition, and may be lower than last FY. If they retain the superb ROE than IMO an acquisition would provide the best return for SH in the long run.
I lean towards the acquisition road because they are operating in a highly fragmented industry, so feel LT this would provide good capital growth, SP appreciation and eventually a higher sustained dividend.
However, if they announce a divvy I'd be super happy with some return (maybe just a controlled 10-35% earnings so they can still splash out)... I see it as a win-win which was part of my original investment thesis 6M ago, really excited for when they report!
Ohh also I love that they have paid down debt, the no divvy and pay down debt policy of the last 4 years has put FRM in a 10-fold better position than years gone by. Would have taken guts the last 4 years and no doubt there would have been a lot of continual pressure on management to return to holders, but they held tight and have done the right thing long term for the company, lets hope the good work continues!
FRM Price at posting:
$1.20 Sentiment: Buy Disclosure: Held
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