Melrose Industries Share Discussion Threads

[brexitplus] 12/3/2018 21:05

I never cease to be amazed when someone who doesn’t like what they hear brings down the tone of a conversation.

Please continue with the constructive discussion we are having.

[semper vigilans] 12/3/2018 20:50

Brexit - everyone is working on electric cars, even Dyson.
Suddenly, they will all come out with the product with more competition so lower margins: some manufacturers will fail.

[gettingrichslow] 12/3/2018 20:41

No swearing at all in that one Minerve - you see, you can do it if you try hard enough!

[minerve] 12/3/2018 20:32

I see the chimps are plucking flees out of each other's hairs. :)

[brexitplus] 12/3/2018 20:31

Meanwhile and Getting

Dana down 3.7%

Good discussion and points.

In addition, by letting the management manage I’m sure penetration of markets like electric vehicles will be much quicker than letting the board decide and pitching for the funds.

[meanwhile] 12/3/2018 20:30

Thanks, gettingrichslow, for your excellent answer. You sound a clever and experienced fellow.
I’m disappointed by the financing of the bid but I will hang on for signs of those returns coming to old MRO holders.
I was spoilt by the Nortek bonanza, I suppose.

[gettingrichslow] 12/3/2018 20:17

Meanwhile, I've twice tried to get rich fast and neither attempt worked! But the slow strategy is working just fine. This is my third largest holding and I've got just as much faith in the leadership here as I have in my top two. I have no good reason to believe they won't outperform here just as they've done numerous times before (especially if you go back to Wassell). I've read your posts on here for some time and I know you're a shrewd investor so your uncertainty has made me think carefully but I will continue to stay with this and I'm confident that will reap rewards.

[meanwhile] 12/3/2018 19:42

Oh thanks, gettingrichslow, nothing to worry about then.

Any ideas for getting rich fast?

[gettingrichslow] 12/3/2018 19:12

Meanwhile,
Costs will get cut more than market thinks
Margins will increase more than market thinks
Revenue will grow more than current projections
So profits will be greater than market thinks
They'll do all that quicker than market thinks
They may also bolt on acquisitions then improve those and make synergies leading to further profitability
In short, you raise some good questions but we have no reason to believe these won't be the answers.

[meanwhile] 12/3/2018 19:03

Let's hope so.
Assuming then that Melrose achieve these increased margins, and cut the costs they have indicated to us, they will then have got the GKN part up to the value they paid for it.

I can understand confidence & optimism in the Melrose methods, and I have some of that because they've made me a small fortune from it since 2005, but I have to say that it's all come from cutting costs, with increased margins, & debt interest costs and these seem already in the price.

What I question is where the further improvement is coming from. I have talked about figures, a value of £20B needed for the improved businesses to show a share price return. The GKN shareholders will vote for this offer because they already have their return, they can walk away and don't need future increases.
I'm talking for MRO shareholders now. You can't sell hope, optimism & confidence and that's all we have currently. At some point it has to be turned into money.

Can someone tell me where the growth for us is coming from?

[brexitplus] 12/3/2018 18:35

Meanwhile. Yes, close to agreeing.

The big increases in operating profit margin, as at Elster and Nortek were early on so the Melrose share price increases quickly in the cycle. No reason why this shouldn’t be the case with GKN.

Melrose will not shrink from using the latest technology and entering profitable markets.

Hence my optimism.

Dana down 3%.

[meanwhile] 12/3/2018 18:06

Ok, brexitplus, we are close to agreeing now, I think.

Where do you see the large possibilities? Electric vehicles perhaps?

Maybe our difference is that an incremental rise to 300p over 5 years is great for your pension fund and other funds, but it's no good for my friend, Mr Wallet.

[brexitplus] 12/3/2018 17:55

Meanwhile.

I see what you are saying.

However, I’ll put my trust in the Melrose team. I can’t see why they have been chasing GKN for so long without expecting to make a big profit. Looking into the future the possibilities are really large. It’s all a question of who do you back to make it happen. In my view 300p is quite possible as the increase will be incremental and not all in one go.

My opinion of course.

[brexitplus] 12/3/2018 17:13

Dana down over 2.7%. Not exactly what you would expect if investors thought their deal was going through. Yet what do I know.

[sogoesit] 12/3/2018 17:10

Well, in that case Blackrock know where their butter is spread on the bread never mind the jam.
Personally, I prefer having my cake and eating it; preferably with cherries in it and not picked at random!

[minerve] 12/3/2018 16:57

Good luck to all in the Circus of Life! LOL

[brexitplus] 12/3/2018 16:55

Meanwhile. I’m not as pessimist as you about Melrose. In fact I’m really enthusiastic.

I see Nortek sold of in a couple of years with big profits returned and reinvested by me.

GKN I see improving in all areas and the non-core sold off in a couple of years at good profits too. I can quite imagine Driveline and Aero both refloated by 2022.

And I can quite see complementary other deals funded by rights issues.

Melrose is not the sort of business to sit on its laurels. It wants to keep moving forwards, which for me is one of its attractions.

PS. Dana drifting down today. Not much enthusiasm for it on the other side of the pond.

PPS. Of note, Blackrock holds nearly 10% of Melrose and nearly 6% of GKN.

[yertiz] 12/3/2018 16:49

So, GKN have rejected the increased offer. What this really means is the decision is now in the hands of the major shareholders and institutions (as it always was) particularly with respect to the pensions deficit, the proposed Dana deal and the leftist posturing by MPs/Union leaders who have not the first idea about business.

Still not finished by a long chalk!

[meanwhile] 12/3/2018 16:44

Sorry, brexitplus, the Jam was yours.
Old M's very active today, I see.

I also like a bit of excitement, the excitement of making money and not the excitement of losing it.
From 2005 to 2016, I made > 60% per year from Melrose. I can't see anywhere near that coming from GKN, and Nortek's almost done.

MRO is in a new phase, and nothing like the old one. The acquisition itself is exciting for the big 3, but for us it's all in the price.
For the enlarged MRO price to reach 300p, would need a market value of £15B, that's the value of its businesses less its debt. I can't see it.

[brexitplus] 12/3/2018 16:27

Meanwhile. Jam today was me.

My opinion, for what it’s worth, and probably not much, is that as soon as, or possibly, before the Dana deal is done others will be bidding for Aero and the big investors will sell it. By 2020 GKN will be no more.

I happen to think that Melrose will make big improvements and with profits from Nortek the share price will do well.

If you prefer GSK good luck. Personally I like a bit of excitement.

[minerve] 12/3/2018 16:21

brexitplus

I believe I am more important than you because this is a GKN shareholder decision of which I believe you hold none, and even if you did, I most likely own many many more shares because my investments are significantly greater than yours.

I don't need the facts, I just know. :)