American Woodmark Corp (AMWD)
The Company manufactures and distributes kitchen cabinets and vanities for the remodeling and new home construction markets.
Recs
2008 EPS: .2
2009 EPS: -.6
2010 EPS: .19
current p/e: 0
Forward P/e: 104.7
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Very little leverage; strong balance sheet; excess mfg capacity but not excessive if economic turnaround within 12 months.
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This company does not know the difference in quality and crap. Most all their product now is crap. You can sell it for a while then no one will buy it any more. They are destroying their brand with a bad product.
They don"t know a good worker from a bad one -a good cabinet from a bad one. Have no regard for either.
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Upper management ensures themselves the perks and bonuses while the underpaid clerks receive 15 to 25 cents an hour pay raise. The over 50 generation, especially the female group, is treated with very little respect. The company operates with the attitude of the backward, patriarchial 19th century generation. Get with the program, American Woodmark, and use your brain bank in the older employees who are still loyal to the company.
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this company makes no sence. how can anyone buy this stock when the housing market is in the tank ! i know for a fact that they closed one of their plants , because they dont have enough orders to keep their employees working full weeks. what i see is this company going private soon ,they have seen better days and now its time to fall back to just being a average cabinet maker.
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overvalued
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Simple cabinet making business is easy to understand. It is also easy to see why the stock has been driven down. Minimal debt should allow it to sustain the business. It is still cash flow positive even through this housing downturn. Interest rates are being slashed which is going to encourage more borrowing and re-inflate housing. The fed and the politicians are reacting to a problem that has probably already run it's course as they are usually very late to react.
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I usually don't short stocks after they had a big drop but AMWD is the exception - today's results were so dreadful that I expect the stock price to drift down even further to the low teens - simply no relief in sight for the new home construction markets.
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this company will be private in a couple years
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They are going to spend up to a 100mil on a buyback. The market cap of the compamy is 443mil. Thats almost 25% of their value thats has to be a good thing
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American Woodmark is one of the major suppliers of kitchen cabinets to both Lowe's and Home Depot. With both of these stores having lower sales and margins, pressure will be put on companies like AMWD and Kraftmaid to be more competitive in sales. AMWD has been increasing its use of imported products like drawers and hardware to keep pace in this market. Import cabinet companies with assembly in the US will cause more competition from abroad. This double edge sword will cause this stock to under-perform in the next few years.
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Good cash flow, easy business to understand. I liked the price better 6 months ago, but still looks like a long term buy.
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The shorts hate the stock, and perhaps rightly so -- it's performance has been spotty over the last few years. But I like the CEO's refocusing on high-margin sales and letting "somebody else" make the low-margin sales. The strategy has been working well so far, and I'll bet it keeps on doing so.

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