Don't get me wrong; I think this is a very strong business which is becoming even stronger (partly due to competitors self-harming themselves and due to DLX's unrelenting investment in operational efficiency).
I thought both of your closing sentences (namely, "I would have a different view of debt levels if it was for another head scratching acquisition" and "I guess how they deploy this cash in due course will determine whether such metrics are reasonable or otherwise!" are very relevant for any investment in DLX once the new factory is commissioned.
Because, as we know, the prolific cash generation of the business will mean that the balance sheet will soon repair itself and then the "What Now?" question inevitably gets asked around the boardroom table.
And the problem I have is that I don't know what the outcome will be.
But we are still a good two or so years from that point in time.
I can't see any reason at all for selling my DLX shares before then.
(One thing that does occur to me when I look at the stock of residential housing that has been added during the current housing boom: from a maintenance standpoint it appears to be a lot more paint-intensive than the legacy stock of housing; a lot more inside walls per housing unit, and not much face brick stuff being built currently from what I can see. Which will possibly - at some stage - result in a change of the slope of the demand curve.)
DLX Price at posting:
$6.90 Sentiment: Hold Disclosure: Held
