Please explain what I am missing about LMN, which is a name I know you are high on, and which has obviously done well as far as share price appreciation is concerned.
When I review its numbers nothing jumps out at me as a reason to buy - in fact, the opposite: EPS is -1.73; Revenue is substantial but no earnings that I can see - in fact pre-tax profit margin is -210.10%. ROE, ROA and ROC all seem meh to me, while price to sales and price to book seem high.
If it wasn't for 5i's recommendations regarding LMN, based on the numbers I don't think I would give it a second look.
I'm not adverse to owning it, especially given that lots of others seem to want to, and are willing to pay dearly for it. But why would I -or why would anyone else? Is it solely because its a CSU spinoff?
Please enlighten me. Thanks!
Peter
LMN has reported some losses in the past, but most of these were related to accounting and its spin out from CSU. It is expected to make US88c per share next year. This still does not make it 'cheap' but many investors are buying into the long term prospects. As it is a newish public company, we would not focus too much on historicals. It does get a premium with the CSU connection. Many investors 'missed' CSU which has been perhaps the best stock in Canada over 20 years. LMN looks to be following the same model: make accretive acquisitions, use the cash flow to make further acquisitions, and never issue new stock. It has the potential to do deals that are too small for its parent company. It saves money with a Venture listing, and not doing conference calls. It doesn't care about Bay Street analysts and prefers to just let the numbers talk. Nothing is guaranteed, but in its short history it has done solid acquisitions and has good stock and fundamental momentum. It is a 'sleeper' stock: it may not be exciting but we are quite confident than in 10 years investors will be very glad they owned it.