Carlisle Results Counter “EU Recession” Talk

Carlisle Results Counter “EU Recession” Talk

“Davidson” submits:

The Business Cycle Value Investor (this is my investment approach) analytical process is both “Top Down” and “Bottom Up”. The investment activity is mostly driven by the broad economic trends (called “Top Down” analysis) as in what is happening to auto sales and employment trends. As part of the effort, one needs to confirm the “Top Down” by frequent and detailed analysis of individual company business trends which is called “Bottom Up” analysis.

Carlisle Cos reported this morning with a $0.94/shr 1Q12 earnings report when the average analyst had expected only $0.61/shr even besting the highest estimate of $0.68/shr. This was a 77% increase over the 1Q11 reported earnings. Carlisle’s Dave Roberts on the 8AM conference call this morning reported that he “did not see a European slowdown”. Roberts reported a 22.1% increase in Organic Sales (sales only attributed to existing businesses). Not only did he not agree with the reports of Europe in recession, but he expected 2012 to be a strong organic global sales year for Carlisle.

Peter Lynch: How Investors Can Find Their Edge

Peter LynchPeter Lynch was one of the best growth investors of all time. As the Magellan Fund manager at Fidelity Investments between 1977 and 1990, he averaged a 29.2% annual return. Q1 2021 hedge fund letters, conferences and more The fund manager's investment strategy was straightforward. He wanted to find growth companies and sit on them Read More

Carlisle Cos $CSL serves building supply markets with rubber roofing, the company supplies off road tires to the agricultural and power sports market, brake and friction products to the agricultural, construction and mining vehicle suppliers (Caterpillar) and wire harnesses to the aerospace industry. Carlisle also has a smaller plastic food service business. Carlisle’s businesses if anything are dead in the middle of global businesses serving the basic needs of society. Carlisle is a “Lean Mfg” company and has brought back manufacturing formally performed outside the US by “re-shoring”. Dave Roberts is responsible for the “Lean Mfg” revolution at Carlisle.

When I see strong employment, industrial production and auto sales gains in the general economy it is always confirmed by what companies like Carlisle are reporting in their individual businesses. I have excerpted slide #4 from the presentation of this morning below. The complete presentation is available at this link:

I spend as much time performing “Top Down” as I do “Bottom Up” analysis. I do this to confirm that what seems to be reported on a gross basis is actually being experienced in detail by the many companies which comprise the investment markets.

Dave Roberts’ comments this morning were quite positive and in line with current “Top Down” analysis. Carlisle is only one of many companies reporting better than expected results from global business activities. The US is the largest single consumption market in the world and if we are experiencing expansion and if the detailed reports support “Top Down” and “Bottom Up” global expansion, then we should not be listening to the “Doom and Gloomers”.

Optimism is warranted in my opinion!

(I own Carlisle personally)

Capture502 547x420 Carlisle Results Counter EU Recession Talk

By ValuePlays



Previous article The Facebook IPO Primer – Book Review
Next article RadioShack Posts Loss for Q1, Goes Negative
Todd Sullivan is a Massachusetts-based value investor and a General Partner in Rand Strategic Partners. He looks for investments he believes are selling for a discount to their intrinsic value given their current situation and future prospects. He holds them until that value is realized or the fundamentals change in a way that no longer support his thesis. His blog features his various ideas and commentary and he updates readers on their progress in a timely fashion. His commentary has been seen in the online versions of the Wall St. Journal, New York Times, CNN Money, Business Week, Crain’s NY, Kiplingers and other publications. He has also appeared on Fox Business News & Fox News and is a contributor. His commentary on Starbucks during 2008 was recently quoted by its Founder Howard Schultz in his recent book “Onward”. In 2011 he was asked to present an investment idea at Bill Ackman’s “Harbor Investment Conference”.

No posts to display