AC
If you look at their operating margin it now resembles other industrials. It has moved from around 8% to between 11% and 12%. That is excellent.
It is very clear that the CEO has benchmarked against other industrials. He has retained a reasonable debt level. Again that is a good thing because it is far cheaper than equity (for NLX anyway).
What he has to do now is use that operating margin and the lever that debt to achieve a return above the cost of capital.
Given the new structure I am bullish and own. It is a turnaround stock and you will have to wait given the new organisational structure.
On my model I estimate that it will hit $0.78. That is if the economy stays boyant. It will move first move to 40c.
AC - three others that look undervalued on the basis of my model are AAC, AHS and BPC.
peter_kk, page-2
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