CamdenWhilst I agree with almost all of what you say I must...

Camden

Whilst I agree with almost all of what you say I must disagree with one point.

If you look beneath the cashflow you will see that the majority of the growth and high margins actually come from the acquisition done pre GFC, particulary Swan, OMS and the OMSJV. Most of their original businesses have seen declining sales and margins.

SKE's error was not the path of industry consolidation, rather the means by which they funded those acquisitions. They were all debt funded.

If they had made placements (to new investors or to vendors of the acquired businesses) at their prevailing price at the time of those acquisitions (which was as high as $6 if I recall) then the company would of not been crunched at the time of the GFC.

Undoubtedly the CEO of the time was the major reason those acquisitions were debt funded, he was also the major shareholder and probably did not want to be diluted by any placements or raisings. But I also think the board played a role there too, but like the ex CEO most of those seemed to have moved on too.

Regardless though I agree they are well placed at the moment, all things considered.

Just my thoughts.