Diebold (DBD, Financial) is a 145 year old firm that, among other things, makes safes, ATMs, election systems and other security sensitive products. It is a leader in the industry. But is its stock as safe as its products? Probably not. Let me explain why.
The company has been dogged by a series of unfortunate events in the past year or so, from law suit around its election systems, to slower than anticipated new ATM acceptances in the market place. Rightly or wrongly, the company has a credibility problem with the Street. Just two weeks ago, Diebold warned of a dissappointing third quarter blamed on a delay in shipment due to Hurricane Katrina. Mr. Market promptly shaved $10 off its share price, giving it an honorable mention in my weekly most declined list. At $35, its trailing P/E is 15. Sounds pretty reasonable? Not quite when I digged deeper
The company has been dogged by a series of unfortunate events in the past year or so, from law suit around its election systems, to slower than anticipated new ATM acceptances in the market place. Rightly or wrongly, the company has a credibility problem with the Street. Just two weeks ago, Diebold warned of a dissappointing third quarter blamed on a delay in shipment due to Hurricane Katrina. Mr. Market promptly shaved $10 off its share price, giving it an honorable mention in my weekly most declined list. At $35, its trailing P/E is 15. Sounds pretty reasonable? Not quite when I digged deeper
