|New Threads Only:|
|New Threads & Replies:|
Forum List » Guru News and Commentaries|
Guru News, Stock picks and commentaries
Howard Marks Adds to Portfolio TMS International Corp.
Posted by: Dianne Tordillo (IP Logged)
Date: October 29, 2012 03:24PM
With a transaction total of more than $10 million, Oaktree Capital (OAK)’s Howard Marks acquires 1,068,288 shares of industrial steel mill services provider TMS International Corp. (TMS), documented in Marks’ latest 13G SEC filing, reported on GuruFocus Real Time Picks.
This positions Marks as 7.37% owner of TMS International.
With a focus on risk control, Marks is legendary for investing in companies ridden with distressed debt, that do well in unstable, less efficient markets.
The Oaktree Capital website described it best: “Above average gains in good times are not proof of a manager's skill; it takes superior performance in bad times to prove that those good-time gains were earned through skill, not simply the acceptance of above average risk. Thus, rather than merely searching for prospective profits, we place the highest priority on preventing losses. It is our overriding belief that, especially in the opportunistic markets in which we work, ‘if we avoid the losers, the winners will take care of themselves.’"
The new addition of TMS International seems to reflect Marks’ investment mantra.
Despite the company’s second quarter financial results revealing a $1.4 million decrease in the company’s total revenue compared to the same time last year, TMS International also experienced several increases, including for its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), net income attributable to common stock and revenue after raw materials costs.
“TMS International produced solid second quarter results…” said Joseph Curtin, TMS International president and chief executive officer, in a press release. “We are pleased that the risk-minimizing features of our business model enabled us to avoid material inventory write-downs despite significant declines in commodity pricing, which occurred during the quarter.”
TMS International’s basic and diluted earnings per share were up 92.3% for the second quarter compared to the same time last year, from $0.13 to $0.25.
Its revenue after raw materials costs went from $137 million in the second quarter of 2011, to $153.6 million in the second quarter of this year, a 12.1% increase; its adjusted EBITDA for the quarter rose 13.1% from $33.5 million to $37.8 million.
The company’s six month fiscal results also reflected increases for all categories, this time including total revenue.
“Despite the continued uncertain global economic environment, we continued to produce strong financial results by focusing on creating value and delivering exceptional service for our customers globally,” Curtain said.
TMS International will announce its 2012 third quarter financial results on Nov. 1.
As parent company of Tube City IMS Corp., TMS International operates about 80 facilities in 11 countries, and about 30 brokerage offices that buys and sells raw materials across five continents, according to its website.
In July and August, TMS International announced vast new opportunities for expansion, after acquiring several new contracts with various outsourced mills services in and outside of the U.S. (a $91 million transaction), and the opening of several trading offices in Brazil, Florida and Texas, marking the company’s first formal trading group presence in both Brazil and Florida.
Trading at $10.21, TMS International has a market cap of $401 million. It has a P/E (ttm) of 17.5, a P/B ratio of 1.4 and a P/S ratio of 0.2.
About GuruFocus Real Time Picks
GuruFocus Real Time Picks alerts you of the stock purchases and sales that Gurus have made within the last two days. Follow your favorite Gurus closely with GuruFocus' Premium Membership. If you are not a Premium Member, we invite you for a 7-Day Free Trial.
Disclaimers: GuruFocus.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on GuruFocus.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The gurus may buy and sell securities before and after any particular article and report and information herein is published, with respect to the securities discussed in any article and report posted herein. In no event shall GuruFocus.com be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on GuruFocus.com, or relating to the use of, or inability to use, GuruFocus.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. The gurus listed in this website are not affiliated with GuruFocus.com, LLC. Stock quotes provided by InterActive Data. Fundamental company data provided by Morningstar, updated daily.