Friday, January 10, 2014

Seeking Alpha: RPM Redlining On Value

Specialty chemical company RPM International (RPM) is a curious company for GARP investors. The company has a strong record of sales and free cash flow, but the company's book value growth and returns on invested capital have not been so remarkable. RPM also has a strong collection of brands and a good history of adding value to its acquisitions, but valuations have been marching higher for a few years while most value-creation metrics haven't kept pace.

I might not rush to sell RPM International if I owned shares today, but buying it at these prices is another story. I do believe that the company can leverage a recovering residential remodeling/repair market as well as growth in infrastructure spending and international markets, but it's very hard to find a metric whereby these shares look like a bargain for value-oriented investors.

Read the full article at Seeking Alpha:
RPM Redlining On Value

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