Madamswer
: "Reads to me like they are scurrying around like crazy to find enough hollow logs in which to squirrel away earnings."
No doubt accumulating reserves for another special dividend following those previously declared in 2008, 2009, 2010 and 2015. Hopefully the company can ditch the DRP next time around and maintain the current share count.
Speaking of special dividends and favourites (hcosah), other holdings I have who don't mind rewarding shareholders with extra cash include ARB (as mentioned by rivella) and FLT.
I'm lucky enough to have found a few companies possessing the characteristics you mentioned hcosah ie.
* Founder remaining involved
* Conservative accounting
* Astute capital management / stewardship
* Strong organisational culture
* Focus is long term positioning of the company rather than short term results
* Modest use of leverage
* High returns on incremental capital
Importantly, companies need to demonstrate these characteristics over an extended period of time and across cycles. I can only vouch for a small number of holdings that have proven to do that, and I allocate a high % of funds accordingly (I'll call these Tier 1 companies). Other companies I own
seem to share such characteristics but I don't as yet have the conviction to allocate more than a small allocation of funds to those positions at this point in time.
So here's my list of Tier One holdings, including the founding family.
FLT - Turner
SNL - Forsyth
MNF - Sugo
ARB - Brown
REH - Wilson
NCK - Scali
HSN- Hansen
Probably the one company held that is closest to joining the list is OCL (Walls), which like TNE (mentioned by Rivella) expenses all R & D - understating to some degree their true earnings based on the revenue growth flowing from that R &D.
But of course I've '
found' companies who have the desired characteristics mentioned above but for reasons of a weak competitive position / misguided acquisitions (debt funded) / inability to adapt and evolve / poor execution .... have proven to be no more than impersonators! Some that come immediately to mind that have handed me that lesson include MCE, BYI, SWL and VTG.
Anyone else have any other thoughts or suggestions?
(20min delay)